German govt greenlights 2.6 billion euros for green steel production in western state Saarland

Steel producers in the western German state of Saarland have been granted 2.6 billion euros in state support to transform their production procedures towards climate neutrality. Economy and climate action minister Robert Habeck on Monday visited the region on the border with France, where he announced that the government had agreed on support payments for the region, newspaper Die Welt reported. While the European Commission still has to greenlight the subsidies, Habeck said he was confident that the measure will get the go-ahead from the them soon. “No project has ever been stopped on these last few metres,” the minister stressed. Habeck told workers at a Stahl-Holding-Saar (SHS) event that “Saar steel’s future is green” and that the decision would grant the region “a strong signal for the future.” The federal government will pay more than two-thirds of the support funds, while Saarland’s state government is going to cover the remaining 30 percent.

Saarland’s state premier, Anke Rehlinger, said the 780 million euros earmarked for green steel have already been made available for a swift release and added that Habeck’s announcement would bring “clarity and security” to the region. Some 14,000 people are employed in Saarland’s steel sector. The steel industry presented a plan at the end of 2022 for transitioning away from coal to hydrogen worth about 3.5 billion euros, of which 60 percent should be covered by the subsidies.

Germany’s steel and renewable industries in November launched a joint call for a “transformation summit” to clarify the urgently needed funding for industry decarbonisation in the wake of a constitutional court ruling that found 60 billion euros in planned state support for climate and transformation projects were unlawfully budgeted. The government recently also greenlighted 4 billion euros for green energy and industry projects in Africa, with a government representative citing steel production as one example for industry activities that in the future could take place in African partner states with cheap access to green hydrogen.