Germany boosts support for ‘green’ steel production – Salzgitter will receive a further €322 million
Major German steelmaker Salzgitter will receive a further €322 million ($380 million) in state funding to convert its production to more climate-friendly methods.
The Economy Ministry in Berlin announced the support package on Monday following approval by the European Commission.
Initially, around €1 billion in support had been planned for the project under the EU’s Important Projects of Common European Interest (IPCEI) programme.
However, the original plan was based on the assumption that further funding would be available from other sources within the European Union. The newly approved funds are intended to close that financing gap.
The support package will be used to support Salzgitter in converting its steel production from blast furnaces to methods involving hydrogen, among other modernization steps.
The government will provide 70% of the financing and 30% will come from the state of Lower Saxony, where Salzgitter is located.
In November, Chancellor Friedrich Merz warned that Germany’s steel industry – the EU’s largest – is in an “existential crisis” as it seeks protection from Chinese goods flooding the European market due to US trade barriers.
Salzgitter CEO Gunnar Groebler at the time called for greater protection for manufacturers, noting that some 5.5 million jobs depend directly or indirectly on steel-related value chains.
However, the government remains under pressure to continue the transition to “green” steel based on renewable energies to lower carbon emissions in the steel sector.
Last year, Germany’s crude steel production fell to 34.1 million tons, the lowest level since the financial crisis year of 2009, when output stood at 32.7 million tons.
Around 1 in 3 tons of steel used in the European Union now comes from outside the bloc, while global overcapacity and aggressive US tariff policies are further exacerbating the situation.
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Germany boosts support for ‘green’ steel production – Salzgitter will receive a further €322 million, source
