News Global Market hydrogen steel industry 236 10 June 2026
The volume of supplies is 10,000 tonnes of green hydrogen per year
The German energy company EWE and Salzgitter Flachstahl GmbH (a subsidiary of the German steel manufacturer Salzgitter AG) have announced the signing of a long-term agreement for the annual supply of 10,000 tonnes of ‘green’ hydrogen. Deliveries are scheduled to begin in 2030 via Germany’s main hydrogen network. The contract is for an initial seven-year period. This was reported by EWE.
This agreement is the first major contract for the supply of hydrogen produced at EWE’s 320 MW electrolysis plant in Emden, which is currently under construction. For Salzgitter AG, this is also the first large-scale agreement for the external procurement of renewable hydrogen.
Green hydrogen will play a key role in the SALCOS programme, which aims to completely replace traditional blast furnace steel production with low-carbon direct reduction technology. According to the company, the contracted volume will cover approximately 6.5% of the total hydrogen requirement needed to implement the project.
The transformation strategy has been developed to radically reduce CO₂ emissions in the steel industry. Salzgitter’s direct reduction plant is already capable of reducing carbon emissions by approximately 60% by running on natural gas instead of coal and coke. However, the company’s long-term goal is to switch entirely to environmentally friendly hydrogen-based steel production, where the only by-product, instead of carbon dioxide, will be ordinary water.
According to Salzgitter’s estimates, the fully operational SALCOS direct reduction plant will require up to 150,000 tonnes of ‘green’ hydrogen annually. To partially meet this demand, the company plans to produce around 9,000 tonnes of green hydrogen per year using its own 100 MW electrolyser. However, the company will meet most of its future needs through external suppliers, such as EWE.
The economic viability of the project still depends to a large extent on regulatory conditions. The EU’s Renewable Fuel Non-Biological Origin (RFNBO) certification scheme, which regulates compliance criteria for renewable hydrogen, is a particular cause for concern for the business.
The German federal government has already allocated €925 million to support Salzgitter’s efforts to decarbonise steel production under the SALCOS programme. A further €267 million has been earmarked to support green hydrogen production as part of the construction of EWE’s electrolysis plant in Emden.
It is worth noting that the European Commission has approved a €1.3 billion German state aid scheme to finance the production of renewable hydrogen. The approved programme provides support for the construction of up to 1 GW of installed electrolyser capacity and the production of up to 10 million tonnes of renewable hydrogen. According to the European Commission’s estimates, this will enable the avoidance of up to 55 million tonnes of CO₂ emissions.
