Germany-based SHS (Stahl-Holding-Saar) has announced further construction progress at its €4.6 billion Power4Steel decarbonization project, which will transform steel production at Dillingen and Völklingen, during a visit by German Chancellor Friedrich Merz and Saarland Minister-President Anke Rehlinger on September 28.
Construction advances beyond foundation work
Following extensive site preparation and foundation work, construction is progressing above ground, with the first of approximately 120 buildings planned across both sites already completed. A new direct reduction plant, approximately 140 meters high, will form a central part of the production route at Dillingen.
The project receives €2.6 billion in federal and state support, while existing facilities continue operating alongside construction. SHS said the transformation also involves changes to its raw material and energy mix, production processes, IT systems and cost structure to support lower-carbon steelmaking and long-term competitiveness.
As SteelOrbis previously reported, Power4Steel includes a direct reduction plant in Dillingen and two electric arc furnaces across the Dillingen and Völklingen sites, with the necessary permits obtained in July 2025. The direct reduction plant will supply both sites, where the reduced iron will be processed alongside scrap to produce lower-carbon steel. SHS also signed a ten-year agreement with Verso Energy for at least 6,000 mt of green hydrogen annually from 2029, supporting its target to reduce carbon emissions by up to 55 percent by the early 2030s.
