report
An enormous amount of CO2 is emitted during steel production – still. The switch to “green” hydrogen costs billions. In order to finance this, the Salzgitter Group is still investing in old systems.
Engineer Tatjana Mirkovic adjusts her white helmet and protective goggles again. Then the 51-year-old kneels on a narrow board and is slowly pushed through the hatch on a roller conveyor – right into the middle of blast furnace A. Normally, temperatures here, in the huge boiler of the Salzgitter steelworks, are around 1,500 degrees, generated with help of coke and coal dust. But now the furnace will not be in operation for 100 days, it will be completely overhauled, “relined”, as they say in the steel industry.
It’s a memorable 100 days for the Lower Saxony company. Because the old blast furnace is being made fit for its last “furnace journey”; it will run for another ten years. And Mirkovic and her people will accompany this journey. One million euros are spent every day. “Relining means: More than 3,000 tons of refractory material will be installed in the blast furnace,” explains Mirkovic. “These are huge dimensions.” The amount that the blast furnace spits out during normal operation is also huge: almost 6,000 tons of pig iron – per day.
Steel manufacturer are among the largest CO2 emitters
CEO Gunnar Groebler explains why it should be over in ten years in front of a snow-white model in the visitor center of the steelworks. Small wind turbines rotate, towers of different heights are lined up in a row, and different emission values are displayed in green neon letters. They are the reason why blast furnace A will soon be history and why there has recently been a huge construction site in the middle of the company premises.
Investments running into billions of euros – production is to be converted almost completely to “green” hydrogen.
Steel manufacturers are among the largest CO2 emitters of all. The Salzgitter Group alone is responsible for one percent of Germany’s total CO2 emissions. Groebler’s job is to change that. He wants to make the company fit for the production of “green” steel, as the more climate-friendly variant is called. “We have to change gradually and the existing technology has to make the money to make the change possible.” It’s like in the car industry, where the combustion engines still have to bring in the money to finance the switch to electromobility.
Biggest investment in the Group history
In order to be able to produce climate-friendly steel in the future, the group is making the largest investment in its history: a mid-single-digit billion amount will flow into the “Salcos” project. The federal and state governments have already approved one billion euros in funding, and the company itself is adding around the same amount for the first expansion stage alone. The goal: to reduce CO2 emissions in steel production by a full 95 percent. With the help of hydrogen and renewable energies – instead of coal and coke as before.
In order for the steel to actually be “green” in the end, the company will need huge amounts of hydrogen, which will be generated using electricity from the sun and wind. Natural gas will still be used in the transition phase, but by 2033 the company will need a full 300,000 tons of hydrogen annually. And the hope is that it will exist then, in contrast to now.
Salzgitter CEO Gunnar Groebler already has the first customers for climate-friendly steel.
“It’s true that green hydrogen is a challenge,” admits CEO Groebler. “We will produce a small part ourselves and procure the rest on the market, just as we buy energy sources today. This market does not yet exist, but we are in discussions with various players.” As a customer you are interesting because the purchase quantity is huge. Another advantage: Salzgitter will be part of a hydrogen starting network and therefore well connected to coastal regions where hydrogen will arrive in the future.
Will there be enough hydrogen?
The new approach works in Groebler’s white miniature model. And in reality? “The question is not whether this is an interesting option for the German steel industry,” says Nicole Voigt, steel expert at the management consultancy BCG. “It’s the only option.” The entire European steel industry must become “green”, i.e. produce CO2-free products as quickly as possible.
Thyssenkrupp has already taken this path. And yet the most important question remains whether there will be enough hydrogen produced in an environmentally friendly way. “The expansion of renewable energies is crucial,” explains Voigt. “If there are delays here, the steel industry will be in tough competition with other industries that also need green hydrogen.”
What’s good for the steel industry, however, is that demand for “green” steel is high, and car and household appliance manufacturers are already lining up and are prepared to pay more, says Groebler. And he confirms that the first batch of climate-friendly steel, which is to be produced in Salzgitter in 2026, has already been sold.
The schedule is tight, the pressure is great
At a height of 41 meters, on a platform outside blast furnace A, engineer Mirkovic looks at the first traces of this new world of steel. Just a stone’s throw away, excavators and huge drills are digging through soggy earth – the foundation for the new electric furnace is being prepared.
The schedule is tight, the pressure is great: There is currently no model in the world for a steelworks that is converted to climate protection during ongoing operations. In order for the billion-dollar project to actually be implemented, Mirkovic’s work is crucial: the blast furnace earns the money that is used to finance the change. That’s why they have to hurry up at Salzgitter – so that hot pig iron flows out of their reworked blast furnace again after 100 days. And in the end, steel can be sold as expensively as possible.