Saarland: Billions for green steel – but hydrogen comes from France!

Saarland: Billions for green steel – but hydrogen comes from France!

The race for green hydrogen is gathering pace in Germany, but the country's calling card could soon come from France. Because while Germany is pumping billions of euros into the production of green steel, the reality is clear: a large part of the hydrogen required is purchased abroad, more precisely in France. According to a report by World Experts consider the competitiveness of German initiatives in this new form of energy to be inadequate.

A significant proportion of the funded projects fall short of expectations. The Federal Audit Office criticized the slow development of the hydrogen economy and warned of potential “long-term subsidies” that call into question its positive climate effects. The green electricity associations also question the assessment and see opportunities for a climate-friendly turnaround in the industry.

Hydrogen as a key for steel production

With its “Power4Steel” project, Stahl-Holding-Saar (SHS) is planning climate-friendly steel production that will be supported by hydrogen. An investment volume of 4.6 billion euros is targeted, with 2.6 billion euros coming from tax revenue. The first hydrogen deliveries will come from a new electrolysis plant in France, operated by Verso Energy, with a capacity of 300 megawatts. This means that 6,000 tons of hydrogen will be transported to Dillingen annually.

But something is not only happening in Saarland. ArcelorMittal also plans to convert its steel production in Germany to green hydrogen to achieve net-zero emissions by 2050. While the company paused its plans for new locations in Bremen and Eisenhüttenstadt in June, the focus is shifting to Dunkirk, where electricity prices are cheaper. The company can thus better master the logistical challenges with light green hydrogen directly from there. In Germany itself there is currently only around 0.066 gigawatts of installed electrolysis capacity, although the federal government is aiming for at least 10 gigawatts by 2030.

The challenges of the hydrogen economy

The of DW The steel industry in question causes almost 7% of CO2 emissions in Germany. In order to achieve climate-neutral control of this industry, up to 55 million tons of CO2 would have to be saved per year - an ambitious goal that is, however, associated with high costs and logistical difficulties. Transporting green hydrogen presents its own challenges as it often has to be transported in a contained form or through complex processes such as liquefaction.

In the meantime, Germany remains in competition on the international hydrogen market, which is being driven forward, among other things, by regional power plants in France. These can deliver green hydrogen that is characterized by cheaper production methods using wind and solar energy. Ultimately, Germany not only acts in its own capacity, but also has to assert itself against international competition, which has advantages due to its own geographical and technical location.

We are still a long way from a sustainable restructuring of industrial structures. But the route through external deliveries and international cooperation still seems to be the right one to achieve the ambitious climate goals.