The holding and management company for the Saarland steel industry – with Saarstahl, Dillinger and ROGESA in its portfolio – needs the hydrogen to implement its Power4Steel decarbonisation project.

From 2027/28, SHS and its subsidiaries plan to produce 3.5 million tonnes of green steel annually as a step towards converting 70% of its production to “climate-friendly operations.”

Under the project, the group will construct a direct reduced iron (DRI) plant its site in Dilligen, with an electric arc furnance (EAF) planned for Dilligen and Völklingen, which will use green hydrogen in the steel production process.

Last December (2023), the European Commission approved €2.6bn ($2.18bn) in German state aid to support the project.

The closed tender targets local green hydrogen supply, aimed at suppliers along the planned Mosel Saar Hydrogen Conversion (MosaHYc) pipeline, connecting Völklingen (Germany), Carling (France) Bouzonville (France) and Perl (Germany).

Currently being developed by France’s GRTgaz and Germany’s Creos Deutschland, the 100km pipeline is planned to transport up to 20,000m3/h of hydrogen.

Jonathan Weber, Head of Transformation at SHS, said the tender process marked an important step in the company’s path to more sustainable steel production.

“We as the steel industry are sending a clear signal and creating a secure framework for the development of the local hydrogen economy,” he added.

DRI can use feedstocks such as coal or natural gas to react with oxygen in iron ore to produce reduced iron which can then be processed into steel. With hydrogen and carbon monoxide acting as reducing agents, by using green hydrogen as a feedstock, up to 95% of CO2 emissions from traditional blast furnace steelmaking could be cut.

Read more:  Will DRI be key to producing sustainable steel?