Under the seven-year agreement, Salzgitter will receive 10,000 tonnes of green hydrogen annually from EWE’s 320-megawatt hydrogen production facility in Emden, Germany. The hydrogen will be transported through Germany’s core hydrogen pipeline network to Salzgitter Flachstahl, where it will be used in the company’s Salcos direct reduced iron (DRI) project aimed at producing low-carbon steel, Gasworld reported.
The deal represents the first hydrogen offtake agreement connected to EWE’s Emden plant, which is expected to begin operations in 2027.
According to Salzgitter, the contracted volume will meet approximately 6.5 percent of the future annual hydrogen demand of the Salcos project. The company also plans to generate around 9,000 tonnes of green hydrogen per year through a 100-megawatt electrolysis facility at its own site. Together, the two sources are expected to secure roughly 12 percent of the project’s total hydrogen requirements.
Work on the supporting hydrogen infrastructure is already progressing. Two Salzgitter subsidiaries have recently been commissioned to install about 110 kilometres of pipeline that will connect the hydrogen network to the steel production facility.
The Salcos project is a key part of the company’s strategy to decarbonize steelmaking and is expected to reduce carbon dioxide emissions by up to 95 percent by 2033.
While announcing the agreement, Salzgitter stressed that further efforts are needed to accelerate the development of Germany’s hydrogen economy. The company highlighted the importance of clear European regulations on issues such as additionality requirements and renewable electricity procurement, which it said will play a major role in the success of future hydrogen projects.
Gunnar Groebler, Chairman of Salzgitter’s Executive Board, said stronger policy support is still needed to bridge cost differences and reduce investment risks. He warned that without additional measures, agreements of this kind could remain uncommon within the industry.
Green hydrogen is widely viewed as a promising solution for reducing emissions from direct reduced iron production, a key process in low-carbon steelmaking. However, high production costs continue to pose challenges for large-scale adoption.
The issue has already affected investment plans across the sector. Global steelmaker ArcelorMittal recently postponed final investment decisions on several decarbonization projects despite receiving approximately €3.5 billion in public funding support for its direct reduced iron facilities.
The latest agreement underscores both the growing momentum behind green hydrogen in heavy industry and the economic challenges that remain as companies pursue large-scale decarbonization projects.
