The German Federal Ministry for Economic Affairs and Climate Action (BMWK) alongside the Lower Saxony government have approved an increase of around €322 million in public funding for German steel producer Salzgitter AG’s Salcos green steel project. The approval lifts total support for the first expansion stage to around €1.32 billion.
Public support increases to €1.32 billion
The move aims to ensure stable planning and continue the decarbonisation of steel production in Germany’s largest integrated mill. The economy ministry said the new approval secures implementation of the project rather than expanding its ambition. The ministry also indicated that the funding is shared with two thirds provided by the federal level and one third by Lower Saxony.
95 percent carbon reduction targeted
Salcos aims to shift primary steelmaking toward near climate-neutral production via direct reduction using green hydrogen, replacing carbon in the process and targeting up to 95 percent CO₂ reduction. Stage 1 of the Salcos project comprises a 100MW electrolyser, a direct reduction plant and an electric arc furnace, planned to come on stream from 2027.
German press reports emphasized this funding as a key support mechanism to keep the transformation on schedule and strengthen the competitiveness of German steel amid global climate policy and industrial shifts.
