With the aid confirmed, funding has now been locked in for the project’s first phase, which is to be operational in 2025. 

“With this ambitious project the company is demonstrating that with modern technology, it is possible to decarbonize the steel sector which is currently the largest industrial emitter of CO₂,” said Germany Vice Chancellor and Federal Minister of Economics Robert Habeck.

"At the same time, this program will safeguard the long-term future of Germany as a center of steelmaking and secure a large number of jobs. Salzgitter can now move to the implementation phase and realize this beacon project. This is a decisive step in the transformation to green steel.”

The aid consists of approximately EUR700 million from the German federal government and EUR300 million from the state of Lower Saxony.  Salzgitter is contributing more than EUR1 billion of its own funds. 

Under the project, Salzgitter ultimately aims to phase out three blast furnaces and three converters, replacing them with two hydrogen-based direct reduction plants and three electric-arc furnaces. The first phase of the project would bring about a direct reduction furnace, an electric arc furnace and 100 MW of hydrogen electrolysis capacity.  

"Having taken our investment decisions last summer, we are well on the way toward implementing green steel production, and we are working at full speed in Salzgitter to realize this goal,” said Salzgitter chief executive Gunnar Groebler. 

“With the final notice of funding, we now also have the policymakers fully on board, and we have the long-awaited certainty that support for Salzgitter Low-CO₂ Steelmaking will be forthcoming. We are grateful as well as proud that with this display of confidence, the political decision-makers are willing to provide us with such sustained support on our way to virtually CO₂-free steel production.”