Steel industry in transition: Thyssenkrupp and Salzgitter are relying on green!

Steel industry in transition: Thyssenkrupp and Salzgitter are relying on green!

The future of the steel industry in Germany is at a crucial point. While the major steel manufacturer ArcelorMittal has put its plans to switch to more climate-friendly production in Germany on hold, its competitors Thyssenkrupp Steel, Salzgitter and Stahl-Holding-Saar (SHS) are resolutely continuing their conversion to green steel. As the Rhine Palatinate reports, Thyssenkrupp is planning to complete its first direct reduction plant in Duisburg, but is economically at a loss. At the same time, Salzgitter's move to replace coal-fired blast furnaces with systems powered by natural gas and later hydrogen represents a significant turnaround in the traditional industry.

ArcelorMittal has decided not to pursue its planned investments of 1.3 billion euros to convert to “green” hydrogen in Bremen and Eisenhüttenstadt. This is according to information from daily news due to the inadequate cost-effectiveness and the expensive and low availability of hydrogen. In fact, the steel industry is one of the largest CO2 emitters in Germany and faces enormous challenges in achieving the CO2 reduction targets by 2030.

The competition and the challenges

ArcelorMittal's decision is not only met with criticism from industry representatives, but also from political decision-makers. The Bremen Senate described the cancellation as a “severe blow” for the business location and the employees affected. In addition, high energy costs and competition from cheaper suppliers from China are putting a heavy burden on the industry. Accordingly, Thyssenkrupp is faced with the prospect of needing around two billion euros in funding for its new plant, which is intended to replace two blast furnaces by 2030.

Salzgitter, on the other hand, is investing over two billion euros in the renovation, with the federal and state governments providing a total of one billion euros in support. The goal: the switch to green steel by 2033. SHS, which includes Dillinger Hüttenwerke and Saarstahl, is also reaffirming its move away from CO2-intensive production techniques. They are planning to build a direct reduction plant and electric arc furnaces in Saarland, which will cost a total of around 4.6 billion euros.

The future of “green steel”

Steel manufacturers' strategy is changing to meet increasing sustainability requirements. According to the Swiss Steel Group, green steel production is being revolutionized particularly by the electric steel process, in which scrap is processed using electric arc furnaces. This method significantly reduces CO2 emissions, especially when powered by renewable energy. The strengths of this technology are also reflected in Swiss Steel's plans, which rely on 100% green electricity and the use of scrap as a raw material. This not only leads to lower resource consumption, but also increases overall resource efficiency.

The situation in the German steel industry is critical, and ArcelorMittal's decision not to approve funding has reignited debates about the future of steel production. Federal Minister of Economics Katherina Reiche emphasizes the need to improve the framework conditions for the industry in order to remain competitive. In view of the tense situation, IG Metall called for a crisis summit to find solutions for the industry.

The question remains whether the remaining manufacturers will find enough support to successfully embark on the path to green steel. The discussion about this will remain exciting in the coming years, because climate-friendly steel production is crucial for the future of the entire industry.