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Salzgitter AG Receives Official Notice of Government Funding for the SALCOS® Low-CO2 Steel Production Program

Following signature of an administrative agreement on 15 September 2022 by the Federal Republic of Germany and the State of Lower Saxony signifying joint support for SALCOS® and the subsequent necessary approval by the EU Commission in accordance with the subsidy regulations, with the presentation of the official notice of confirmation, the finally determined level of support, disbursement phases and exact terms of the support funding are now to hand. As confirmed in this notice, the first development stage of SALCOS® will receive around EUR 700 million in federal funding and EUR 300 million from the state government. Taken together with the company’s own funds in excess of EUR 1 billion already approved by Salzgitter AG, financing is now assured for the first development stage of SALCOS® which is due to be implemented by the end of 2025. Gunnar Groebler, Chief Executive Officer of Salzgitter AG, said: “Having taken our investment decisions last summer, we are well on the way towards implementing green steel production, and we are working at full speed in Salzgitter to realize this goal. With the final notice of funding, we now also have the policymakers fully on board, and we have the long-awaited certainty that support for SALCOS® will be forthcoming. We are grateful as well as proud that with this display of confidence, the political decision-makers are willing to provide us with such sustained support on our way to virtually CO2-free steel production Our own considerable funding contribution coupled with substantial support from the public sector will enable us to continue to pioneer the industrial decarbonization of Europe. This decision is an important element in the implementation of SALCOS® and of our “Salzgitter AG 2030“ strategy.“
The goal of SALCOS® is, in three stages between now and 2033, to switch over steelmaking in Salzgitter entirely to low-CO2 crude steel production. The first stage with a capacity of 1,9 Mt of crude steel per year is scheduled to become operational by the end of 2025. As part of the complete transformation, two direct reduction plants and three electric arc furnaces will be built to successively replace the three blast furnaces and converters. In this way, the previous production process based on coking coal will be replaced by a new hydrogen-based route to steelmaking. Savings in the order of 95 % of the annual CO2 emissions of around 8 Mt are expected, meaning that around 1 % of Germany’s CO2 emissions can be avoided. https://salcos.salzgitter-ag.com/en/index.html

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