The EU Commission has notified that the application for Salzgitter AG concerning the funding of the SALCOS, Salzgitter Low C02 Steelmaking transformation program, and has therefore declared the state aid measures applied for to be compatible with European law. Another essential precondition for the granting of the requested national funding has therefore been set in place. Following the signing of an administrative agreement on 15 September 2022 by Minister President Stephan Weil and State Secretary Stefan Wenzel BMWK to mark the commitment of the Federal State of Lower Saxony and the Federal Republic of Germany to promoting SALCOS, the EU Commission's approval has also been obtained. Pending a positive, conclusive review and decision by the national funding authorities, we now assume that, in accordance with the administrative agreement of September 15, 2022, the Federal Government and the Federal State of Lower Saxony will contribute up to EUR 700 million and up to EUR 300 million respectively to promoting SALCOS. Together with the funds already approved by Salzgitter AG in an amount of EUR 723 million, this would therefore secure financing the first development stage of SALCOS for implementation by the end of 2025. Salzgitter's project was selected by Germany in the context of an open call to form part of an IPCEI on hydrogen technologies and systems, which resulted in the two approved IPCEIs. However, given its characteristics and objectives, it was better suited for assessment under the Guidelines on State aid for climate, environmental protection and energy 2022. Germany notified to the Commission EUR 1 billion measure to support investments in the greening of Salzgitter's steel manufacturing processes thanks to increased production and use of renewable hydrogen. The aid, which will take the form of a direct grant, will support the construction and installation at the company's site in the city of Salzgitter in Lower Saxony of a direct reduction plant and electric arc furnace which will replace one of the blast furnaces currently operated by Salzgitter. This will allow substituting the use of fossil sources with hydrogen in steel production, thereby avoiding almost all direct CO2 emissions in steel production. The new installation will produce in a greener manner approximately 1.9 million tonnes per year of crude steel The measure will also support the construction and installation of a large-scale (100 MW) electrolyzer, which will produce approximately 9,000 tonnes of renewable hydrogen per year. The hydrogen produced by the electrolyzer will be used as feedstock in the direct reduction plant. The electrolyzer, the direct reduction plant and the electric arc furnace are envisaged to start operating in 2026. Once completed, the project is expected to avoid the release of 3.6 million tonnes of carbon dioxide annually. In addition, to maximize the greenhouse gas emissions' reduction, the generated hydrogen will be produced solely with the electricity stemming from renewable sources.
The EU Commission has notified that the application for Salzgitter AG concerning the funding of the SALCOS, Salzgitter Low C02 Steelmaking transformation program, and has therefore declared the state aid measures applied for to be compatible with European law. Another essential precondition for the granting of the requested national funding has therefore been set in place. Following the signing of an administrative agreement on 15 September 2022 by Minister President Stephan Weil and State Secretary Stefan Wenzel BMWK to mark the commitment of the Federal State of Lower Saxony and the Federal Republic of Germany to promoting SALCOS, the EU Commission's approval has also been obtained. Pending a positive, conclusive review and decision by the national funding authorities, we now assume that, in accordance with the administrative agreement of September 15, 2022, the Federal Government and the Federal State of Lower Saxony will contribute up to EUR 700 million and up to EUR 300 million respectively to promoting SALCOS. Together with the funds already approved by Salzgitter AG in an amount of EUR 723 million, this would therefore secure financing the first development stage of SALCOS for implementation by the end of 2025. Salzgitter's project was selected by Germany in the context of an open call to form part of an IPCEI on hydrogen technologies and systems, which resulted in the two approved IPCEIs. However, given its characteristics and objectives, it was better suited for assessment under the Guidelines on State aid for climate, environmental protection and energy 2022. Germany notified to the Commission EUR 1 billion measure to support investments in the greening of Salzgitter's steel manufacturing processes thanks to increased production and use of renewable hydrogen. The aid, which will take the form of a direct grant, will support the construction and installation at the company's site in the city of Salzgitter in Lower Saxony of a direct reduction plant and electric arc furnace which will replace one of the blast furnaces currently operated by Salzgitter. This will allow substituting the use of fossil sources with hydrogen in steel production, thereby avoiding almost all direct CO2 emissions in steel production. The new installation will produce in a greener manner approximately 1.9 million tonnes per year of crude steel The measure will also support the construction and installation of a large-scale (100 MW) electrolyzer, which will produce approximately 9,000 tonnes of renewable hydrogen per year. The hydrogen produced by the electrolyzer will be used as feedstock in the direct reduction plant. The electrolyzer, the direct reduction plant and the electric arc furnace are envisaged to start operating in 2026. Once completed, the project is expected to avoid the release of 3.6 million tonnes of carbon dioxide annually. In addition, to maximize the greenhouse gas emissions' reduction, the generated hydrogen will be produced solely with the electricity stemming from renewable sources.
