German steel producer Salzgitter AG has announced a three-year delay to the next expansion stages of its flagship green steel initiative, the Salcos project, according to a report published by Reuters. While the first phase remains on track to launch in 2027, subsequent phases which are expected to slash emissions by 95 percent have been pushed back due to unfavorable market conditions and regulatory uncertainty.
Phase one moving ahead
The first phase includes:
- 100 MW of electrolyser capacity for hydrogen production,
- a direct reduction (DRI) plant, and
- an electric arc furnace (EAF).
Once operational in 2027, this stage will reduce carbon emissions by 30 percent, covering around 2 million metric tons of steel annually.
Delays in later phases
Salzgitter AG CEO Gunnar Groebler confirmed that the later expansion phases, intended to cut emissions by up to 95 percent, will now be reviewed for investment in 2028 or 2029, instead of the previously scheduled 2026. According to Groebler, the decision reflects slower-than-expected development of the hydrogen market, unmet regulatory promises by policymakers, and a difficult economic environment for heavy investment.