Salzgitter seeks hydrogen suppliers to green steel production

Steel producer Salzgitter AG (ETR:SZG) has invited hydrogen producers to take part and submit bids in a tender process aimed at helping the German company secure hydrogen for the decarbonisation of steel production.

The tender is part of the SALCOS - Salzgitter Low CO2 Steelmaking transformation programme which aims to gradually convert primary steel production at the steel plant in Salzgitter, Germany, to low-carbon crude steel production by 2033.

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In the first phase, Salzgitter AG will need up to 150,000 tonnes of hydrogen annually at its Salzgitter location. Starting in 2026, part of this hydrogen will be produced at the company's own 100 MW electrolysis plant, which is currently under construction and will generate about 9,000 tons per year.

External hydrogen supply is expected to begin in 2027, contingent on the establishment of a connection to the hydrogen core network or the realisation of alternative supply routes. Later deliveries will also be accommodated.

As part of the tender, Salzgitter plans to procure hydrogen in two categories: renewable hydrogen that complies with EU requirements and hydrogen that reduces lifecycle greenhouse gas emissions by at least 70% compared to the fossil fuel benchmark of 94 g CO2e/MJ.

Under the SALCOS transformation programme, the traditional carbon-based steel production process will be replaced with a new hydrogen-based method. By the final stage in 2033, this shift is expected to reduce up to 95% of the current annual direct carbon dioxide emissions, which are about 8 million tons.

In April, Salzgitter signed a preliminary deal to offtake up to 20,000 tonnes of green hydrogen from energy group Uniper SE to support the SALCOS programme. Supply should start in 2028 at the earliest.