Route Change

Mid-February 2025. A flurry of snow is blanketing the Salzgitter AG plant grounds with a fine white layer. With temperatures below freezing, the first symbolic groundbreaking ceremony will take place for one of Europe's largest green hydrogen production facilities, delivering 100 megawatts of electrolysis capacity and state-of-the-art pressurized alkali electrolysis technology. Today, a little more than a year after construction began, the facility is clearly taking shape. The plant is scheduled to ramp up operations in 2027, at which point in time it is expected to produce approximately 9,000 metric tons of climate-friendly hydrogen per year – thereby providing the fuel for a new era of low-carbon steel production.

The construction project is part of SALCOS^® (Salzgitter Low CO₂ Steelmaking), one of the most ambitious transformation programs in European industry. And it represents a landmark decision that Salzgitter AG made about a decade ago: The group is not only focusing on optimizing energy efficiency, but also on a fundamental shift in the energy sources at work in metallurgy.

The strategy has also drawn criticism: the arguments underline that while CO₂-reduced steel is considered key to decarbonization, energy consumption is trending upwards at the same time. Stefan Mecke, Senior Manager of Energy Strategy at Salzgitter AG, clarifies: "That's a misconception. Total energy consumption is declining slightly. “What is increasing is not energy requirements per se, but the electricity and hydrogen requirements.”

While energy conservation is a frequent topic of public debate, Salzgitter AG is also thinking in terms of another category: what is referred to as the “fuel switch.” "Our approach is to prevent emissions right at the source," explains Mecke. "That's why we're changing the production process itself, rather than treating CO₂ in a follow-up process." Other technologies may be useful in certain industries, especially those where emissions are technically difficult to avoid. However, in primary steel production in Salzgitter, the focus is on replacing carbon as a reducing agent.

The underlying principle is straightforward: To begin with, energy efficiency is maximized to the greatest possible extent. To that end, the Group has had a systematic energy management system in place for years. But ultimately, however, efficiency alone is not enough. At a certain point, the process is as efficient as is physically possible – and yet it still consumes energy. As such, the blast furnaces still in operation today are among the most technologically advanced and efficient facilities in the world. Further CO₂ reductions through optimization are hardly possible anymore – meaning that the only way forward is to switch to a different energy source.

The new facilities need electricity – and a lot of it. Seven wind turbines on the factory grounds cover only a small share of requirements. The lion's share is sourced externally through so-called Power Purchase Agreements (PPAs) – long-term direct contracts with wind and solar farm operators who clearly certify the electricity as green power. One key advantage of the location: As part of the SALCOS® project, Salzgitter AG will be connected directly to TenneT’s extra-high-voltage grid, enabling it to procure large volumes of electricity from renewable sources.

Salzgitter AG is currently reinventing itself. When viewed in the proper context, the apparent contradiction disappears: the issue is not about more energy, but a different kind of energy. Not about doing without, but changing, switching over. “If the energy that is consumed even by a highly efficient process is to emit as little CO₂ as possible,” says Mecke, “then switching to a different energy source is the inevitable consequence.” At the plant in Salzgitter, another building block of this new era is taking shape.