All major steel companies want to decarbonize their production on the basis of green hydrogen, but few are taking such an ambitious and structured approach as Salzgitter AG with its SALCOS program (Salzgitter Low CO2 Steel Making). Dr. Alexander Redenius has been significantly involved in the conception and implementation since 2015. In this interview, he provides an insight into the history and current status of this huge project and explains why the steel industry is facing the biggest upheaval in its history.
Dr. Alexander Redenius, how far along is the steel industry as a whole with regard to the use of hydrogen?
Dr. Alexander Redenius: We are currently building hydrogen-capable plants on an industrial scale. This will make us the first new large-scale consumers of hydrogen in Germany. The DRI plant in Salzgitter alone can use around 150,000 tons of hydrogen per year. And that’s a good thing: The hydrogen ramp-up needs large anchor customers like us to make the development of a hydrogen infrastructure worthwhile. The steel industry is a very efficient user of hydrogen. This has been proven by numerous studies. According to a study by the German Steel Federation, we save 2 tons of CO2 with every ton of hydrogen we use.
The fact that you are switching to hydrogen without the necessary core network being completed represents a certain risk for you. How can you minimize this for Salzgitter AG?
We can initially operate our new plants in Salzgitter with natural gas mixed with hydrogen from the electrolysis plant. This already reduces CO2 emissions by around 60 % compared to the blast furnace route. If green hydrogen is then available in sufficient quantities and at a reasonable cost, we can easily switch production, even gradually.
How much progress have you already made on the technical side in the use of green hydrogen?
Technically, the use of green hydrogen is unproblematic. We can see this in our μDRAL pilot plant. We have already produced the first pellets with 100 % hydrogen in it, which has worked well. Due to its small size, hydrogen can remove the oxygen from the iron oxide very efficiently.
What is the plan for the future?
The integrated steelworks in Salzgitter will be gradually converted to the new processes by 2033. Production will start in 2026 on the first-stage equipment. We will then shut down a blast furnace including a converter and instead operate the DRI plant in combination with an electric arc furnace and use this to produce low-CO2 crude steel, which will then be further processed in existing processes at the steelworks.
You want to start your own hydrogen production in 2026, with hydrogen supplies from external partners to be added from 2027. You launched a tender for this in June 2024. How has the response been so far?
At the end of June, we opened the platform on which potential H2 suppliers can express their interest. To your question: the response has been very promising. From 2027, we are likely to be one of the largest hydrogen customers ever, consuming up to 150,000 tons per year. This solves a basic problem for many producers: nobody invests in green hydrogen production if demand cannot be planned. With our tender, we want to help break this dilemma and give producers more predictability. As already mentioned under the keyword “hydrogen core network”, of course, any purchase from 2027 onwards is subject to the proviso that the hydrogen can also reach us.
You are working on this in Salzgitter with your SALCOS program. Are you on schedule here?
With the internal implementation of SALCOS, yes. The planning for the hydrogen core network has been delayed for a long time, which is why we will probably not be connected until 2029 as things stand. Fortunately, however, we are not dependent on the core network for the start of production on the SALCOS route, but will start with our self-produced hydrogen mixed with natural gas. Extensive construction is currently underway at our plant site in Salzgitter. In 2026, we will commission a 100 MW electrolysis plant, a direct reduction plant and an electric arc furnace here. We are on the right track.
Can you briefly summarize how SALCOS is structured?
In the program, the entire conventional crude steel route in Salzgitter will be converted step by step. We are currently implementing stage 1, in which we are building a DRI plant with an annual capacity of around two million tons. An electric arc furnace is “hot connected” to it. This means that the reduced iron leaves the DRI plant at around 650 degrees Celsius and is transported directly into an electric arc furnace with minimal temperature loss. It is then melted there using as little electrical energy as possible and can be further processed into steel. A major advantage of our DRI plant is that we can operate it with flexible proportions of natural gas and hydrogen. In order to operate it with hydrogen as early as possible, we are building the electrolysis plant with a capacity of 100 MW in parallel. It will be able to cover around 5% of the DRI plant’s requirements. This plant configuration will avoid the generation of CO2 directly in the process.
Is there an international project that is comparable to SALCOS in terms of its ambition and structure?
As far as I know, we were the first to develop a step-by-step program. Nevertheless, almost all of our competitors
have now set up comparable decarbonization projects. The chosen transformation approach is called brownfield transformation: the gradual conversion of an existing plant while regular operations continue. This is more challenging than a greenfield approach, where you build a completely new plant on a greenfield site.
Are there already interested parties for green steel, which will probably be more expensive than its conventionally produced counterpart?
Initially, green steel will still be more expensive, but we expect this to change by the end of this decade. We are currently in talks with numerous customers, in particular with end customer-related sectors such as the automotive industry or manufacturers of household appliances. We have already concluded initial agreements with some of them. So we definitely see a willingness to pay higher prices for CO2-reduced green steel.
In your opinion, what is the most important “external” element for the transformation to succeed?
In addition to instruments to ensure economic viability, the infrastructure is very important when developing the hydrogen economy. Major customers such as the steel industry can help build crucial infrastructure such as the core network. Nobody would build a hydrogen core network for a hydrogen filling station, but if there are anchor customers for whom an infrastructure is built, filling stations, SMEs or even municipalities can be connected relatively easily at a later date. At the same time, we are also a flexible customer: if there is not enough hydrogen in the network, we can produce with higher proportions of natural gas. This flexibility makes us a breathing element in the future energy system, so to speak. This is a great strength of the steel industry.
Dr. Redenius, thank you very much for the interview!
