Salzgitter, Germany's second largest steelmaker, said Cet. 22 in an emailed statement to Platts that it was delaying the expansion stages of the Salcos project by about three years, citing deteriorating market conditions and lack of regulatory support from the federal government.
The decision was made by the company's supervisory board in September. 18, by e-mail application.
"Starting in 2022, the economic and political-legal conditions have deteriorated significantly," he said, adding that the company is still awaiting the regulatory changes promised by the federal government.
Salzgitter added that the federal government should support the German steel industry by ensuring a sustainable, safe and affordable energy supply; accelerating the acceleration of the hydrogen market; supporting the adoption of carbon-accounted for steel products; and advocating for consistent trade protections at the EU level.
Delayed shipments to European steelmakers are struggling with weak demand, high energy costs, and competition from imports, especially from China.
revision of the project schedule
While the first stage, involving the construction of a direct reduction unit, an electric arc furnace, and an electrolysis plant, is still to be launched in 2027, Salzgitter will now postpone the investment decision for phases two and three until 2028/29, instead of 2026, as previously planned.
Similar company projects like Thyssenkrupp and ArcelorMittal also face challenges related to financing, regulatory support, and market conditions.
The 2.5 billion ($2.9 billion) Salcos project was officially launched in 2019 and is part of the City of Salzgitter's broader strategy to reduce CO2 emissions in its steel production processes and transition from traditional blast furnace to hydrogen-based steelmaking processes by 2033, cutting overall CO2 emissions by approximately 95%.
The company began construction of a 100-MW phase of a single electrolyzer in February that will produce 9,000 tons/year of renewable hydrogen, supporting the first stage requirements of 150,000 tons/year for steel production.
The electrolysis plant will be one of the largest green hydrogen services in Europe today.
June 2024, Salzgitter, a competition has been opened for a source of up to 120,000 tons/year of renewable hydrogen for the Salcos project.
A tender for supplies from 2027, subject to connection to the planned German hydrogen pipeline network.
Salzgitter previously stated that it plans to use a total of 150,000 tons/year of hydrogen for its steel plant production, including 9,000 Mt/year produced from its own 100-megawatt electrolyzer starting in 2026.
Platz parts
