AME’s crude steel production forecast for Germany in
2022 is 40.9Mt up 1.7% year on year. Although no major
crude steel capacity expansions are planned in the short
and medium term there will be significant investment
towards the green steel transition.
Germany has plans to
reduce its carbon emissions by 65% by 2030 (compared
to 1990) and achieve net zero by 2045. The majority of
steelmakers are providing roadmaps for their
decarbonisation plans to meet the net zero carbon
emission targets of the Paris Agreement. Germany’s
forecasted average growth for crude steel production in
the medium and long-term for the 2025-2040 period is
0.5%. For comparison, Europe’s forecasted average
growth rate for the same period is 1%.

Drivers of Transition
Various governments and professional bodies have
resulted in Germany’s acceleration of green steel
decarbonisation compared to the rest of the world. The
Federal Government’s, The National Hydrogen Strategy
which was adopted into government in June 2020
suggests laying the foundation for the market
penetration of hydrogen technologies is imperative for
the Germany’s steel industry. The government believes
hydrogen produced using renewable energy, or green
hydrogen to be sustainable in the long term. Various
government funding programmes, studies and projects
are supported by the German government. Some
include, Use of Hydrogen in Industrial Production, The
National Decarbonisation Programme, The
Carbon2Chem research project, and Regulatory
Sandboxes for the Energy Transition.
ThyssenKrupp
Thyssenkrupp Steel plans to reduce its carbon
emissions by 30% from 2018 to 2030 and achieve net
zero carbon emissions by 2045. Thyssenkrupp accounts
for 2.5% of Germany’s CO2 emissions, mostly from its
Duisburg blast furnaces. The company will gradually
transition its BF/BOF steelmaking and utilise carbon
capture, this two-path strategy will require total
investment US$12bn and be completed by 2045.
On the first path, Thyssenkrupp will use green hydrogen
where possible for its blast furnaces in the short term
(2019-2023) and gradually transition its four coal-fired
blast furnaces to four green hydrogen DRI units paired
with four electrical melting units. These DRI and melting
units can be paired with a basic oxygen furnace, much
like in traditional blast furnace steelmaking.
Thyssenkrupp will replace one blast furnace with a
1.2Mtpa DRI plant running on natural gas, and later
green hydrogen, paired with a melting unit from 2025.
Another blast furnace will be replaced by 2029 and all
four will be replaced by 2045 (Duisburg’s current crude
steel capacity is 11.5Mtpa). Thyssenkrupp believes
0.72Mtpa of hydrogen will be required for this strategy,
equivalent to that produced by 3,800 wind turbines.
The second path will use Carbon2Chem, a carbon
capture and utilisation technology, to capture
unavoidable carbon emissions from the basic oxygen
furnaces and convert them to methanol for the
chemicals industry. Since 2016, the project has received
US$67m from the German federal government, and
from 2020 on, another US$88m will be added.
ThyssenKrupp will commence its decarbonisation path
in 2025 with a 1Mtpa EAF type meltshop, this will be
followed by a further 2Mtpa EAF type meltshop in 2035.
The remaining transition of 8.5Mtpa of BF/BOF
steelmaking equipment will be phaseout over 2040 and
2045. The company has also been conducting ongoing
test for the use of hydrogen in its blast furnace since
2019. ThyssenKrupp’s climate-neutral steel will be
known as Bluemint steel. The company expects to
produce between 50-500kt from 2022-2024 and further
ramp up Bluemint steel production to 3Mtpa by 2030.
ArcelorMittal
ArcelorMittal will reduce their CO2 emissions in Europe
by 35% by 2030 and reach net zero by 2050. At
ArcelorMittal’s Hamburg facility the site currently
operates an EAF mini mill with a 1.3Mtpa meltshop. The
facility will be Europe’s only DRI/EAF plant when the
switch is made to using hydrogen from natural gas, with
production of 100kt of H2-DRI expected in 2025. The
federal government has also contributed US$58m in
funding, equating to half of the total cost
ArcelorMittal has partnered with Energy company RWE
in June 2022 for the development of offshore wind farms
and hydrogen facilities. The renewable energy will be
used to decarbonise its steelmaking assets in Germany,
including Bremen, Hamburg, Eisenhuttenstadt and
Duisburg. Green steel will be produced by replacing coal
with wind power and green hydrogen as its main energy
source. ArcelorMittal Germany is planning large-scale
hydrogen-based DRI-EAF steelmaking in Bremen and a
smaller pilot plant in Eisenhuttenstadt. The sites will
produce 3.5Mt of green steel between them by 2030, saving 5Mt of CO2 emissions. The conversion will cost
US$1.2bn-US$1.8bn.

Saarstahl
Saarstahl’s climate initiatives are aligned with the Paris
Agreement. The company expects to reduce its carbon
emissions by ~55-60% by 2030, from a base year of
2020. Saarstahl will transition its Voelklingen and
Dillingen sites from 2027 and complete the entire
decarbonisation and be carbon neutral by 2045. One
blast furnace will be closed in Dillingen during the
transition phase, which will result in a reduction of
carbon emissions. To reduce its carbon emissions the
company plans to use hydrogen rich gases in the blast
furnace from now until 2028. Up until 2030 Saarstahl will
commission a DRI plant with capacity of 2.5Mtpa in
Dillingen. Two EAFs with total capacity of 3.5Mtpa will
be installed at both Volklingen and Dillingen. Once
operational this is expected to reduce carbon emissions
by 60%. By no later than 2045 the company will
commission another EAF with capacity of 1.2Mtpa. By
this time, Saarstahl will increase the use of hydrogen,
subject to its availability and economic efficiency.
The main steel producing companies in Germany which
have announced their green transition plans include
ArcelorMittal, DHS Dillinger Hutte, Huttenwerke Krupp
Mannesmann (HKM), Saarstahl, Salzgitter and
ThyssenKrupp. AME estimates a total crude steel
capacity of 31.7Mtpa of green transition will take place in
Germany from 2025 to 2045. 42% of this transition will
be realised by 2030. AME expects total investment
required for these companies to fully transition to green
steel by 2045 is US$30.6bn. This is calculated as the average 1Mtpa of green steel capacity equates to an
investment of US$965m.
Salzgitter
Salzgitter plan to reduce their carbon emissions by 30%
by 2030, and 95% by 2033, from a base year of 2018.
Their green strategy consists of SALCOS - SAlzigitter
Low CO2 Steelmaking. This has been successful in
recent times with the company partnering with Mercedes
Benz since July 2021 for supplying green strip steel with
a reduced carbon footprint at four of their German plants
to be used for structural and body parts. Likewise,
Stalzgitter partnered with Miele in October 2021 for low
carbon steel to be used for stoves and ovens. Salzgitter
suggests its CO2 footprint of green steel for its
galvanised material is 66% lower compared with the
conventional production of steel via the blast furnace
method.
The company will progressively convert to EAF steel
production from 2025 with a 1.9Mtpa meltshop capacity
at its Flachstahl facility. This will entail similar transition
stages of 1.9Mtpa meltshop capacity in 2029 and 2033.
In July this year the Board approved US$769m for the
first stage of the transition to enable 1.9Mtpa of low CO2
crude steel by replacement of a blast furnace and a
converter. It has constructed a pilot natural gas and
hydrogen-powered DRI plant in Salzgitter that will begin
production in early this year. Eventually, the company
will replace blast furnaces with hydrogen-powered DRI
units with the first large unit to commence operation in
2026. Salzgitter has constructed a 30MW wind farm for
US$59m which will provide green electricity to produce
green hydrogen from water electrolysis, as in the
GrInHy2.0 and WindH2 projects. Total electrolyser
capacity will be 100MW towards the end of 2025 and an
option for additionally 400MW capacity by the end of
2030.
