As part of the project, a new direct reduction plant and two electric arc furnaces are under construction at the Dillingen and Völklingen production sites. They will eventually replace the existing blast furnaces and converters. Hydrogen-based steelmaking will drop CO2 emissions by an estimated 55% by 2030, the companies said. They hope to achieve fully climate-neutral production by 2045. 

“The placement of orders for the core plant units and the securing of initial green hydrogen supplies, the successful completion of the overall financing package represents another decisive step towards the advancement of this unique project. We are firmly convinced that climate protection, innovation and competitiveness can — and must — advance in tandem,” said Stefan Rauber, chief executive officer of SHS Group and chairman of the management boards for Saarstahl and Dillinger. 

The companies said the project is one of Europe’s largest decarbonization projects. The financing was secured through a consortium of national and international banks, combining corporate and investment financing. The investment portion is supported by the export credit agencies OeKB and SACE. 

Additional funding comes from equity contributions and direct financial support from the German Federal Government and Saarland Regional Government under the EUR2.6 billion program for transforming the Saarland steel industry. 

“This financing initiative demonstrates what can be achieved when all stakeholders — industry, banks and public partners — work together toward a common goal: making the decarbonization of steel production a reality,” said Christian Lattwein, head of finance at SHS Group.