Steelmaker Salzgitter to offtake green hydrogen from Uniper

German steel producer Salzgitter AG (ETR:SZG) has signed a preliminary agreement to purchase green hydrogen from local energy group Uniper SE (ETR:UN01) to support its planned production of almost carbon dioxide-neutral steel.

As part of the preliminary deal, up to 20,000 tonnes of hydrogen will be delivered to Salzgitter AG annually, starting from 2028 at the earliest, the steelmaker announced on Tuesday.

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The supply, however, depends particularly on the availability of a hydrogen pipeline from Wilhelmshaven to Salzgitter, the companies said, urging policymakers and network operators for an accelerated timetable for this project.

The green hydrogen will be produced in a 200 MW electrolysis facility, which Uniper plans to build on the site of the former hard coal-fired power plant in Wilhelmshaven, Germany.

The fuel will be used in a direct reduction plant, which is under construction in the city of Salzgitter, for the production of green steel.

The preliminary deal is in line with Salzgitter AG’s programme Salcos, which aims to significantly reduce carbon dioxide emissions in the steel-making process and will require up to 150,000 tonnes of hydrogen per year in its first stage.

Over time, Uniper plans to expand electrolysis capacity in Wilhelmshaven to 1 GW, allowing hydrogen production of 100,000 tonnes annually. Additionally, the company intends to build a terminal in the town to import green ammonia by ship, which can be converted into hydrogen.

Salzgitter had previously secured EUR 1 billion (USD 1.07bn) in public funding to support its green steel efforts.

(EUR 1 = USD 1.067)