State premier of Saarland calls for billions in support to turn steel industry climate neutral

The German steel industry should receive billions in government support to become climate neutral, Tobias Hans, state premier of Saarland, has called for in a letter to Chancellor and CDU party colleague Angela Merkel, reports Frankfurter Allgemeine Zeitung. "If we want green steel, we have to support it," said Hans. While global overcapacity, lower demand from the car industry and subsidy practices of other countries have already strained the industry, the government's new climate action package would make the situation more difficult by pushing up energy prices, Hans said. "If we have 40 billion euros to phase out coal-fired power generation in the name of climate action, we must also be able to raise a billion-euro sum without double figures to lead our steel industry into a climate-neutral future," Hans told FAZ. Although the new climate package was right, he warned against allowing steel production to migrate to countries with "fewer ecological and social standards", thus doing climate action "a disservice".

Decarbonising Germany's steel industry remains one of the most difficult parts of the energy transition. But the idea of replacing fossil fuels with green hydrogen in steelmaking is gaining traction. Steelmaker Thyssenkrupp has announced plans to replace CO2-intensive coke-based steel production with a hydrogen-based process by 2050 while rival Salzgitter has developed a “technically feasible but not economically viable” concept to replace fossil fuels with a gradually rising share of renewable hydrogen in their production process.