SHS Group announces contracts for 'Europe's biggest decarbonization project'

Following the funding commitments from the federal and state governments for what the company is referring to as ‘Europe’s largest decarbonization project’, the planned projects aim to drive a sustainable transformation in current steel production.

The direct reduction plant will supply reduced iron pellets to the two production sites in Dillingen/Saar and Völklingen. The plant at the Dillingen site aims to have an annual production capacity of around 2Mt of direct reduced iron and will be based on Midrex Flex technology, which offers the flexibility to work with various mixing ratios of natural gas and hydrogen. Plant construction firms Primetals Technologies, Midrex Technologies Inc. and the DSD Steel Group have been commissioned to build the plant.

In addition to the DRI plant, the contracts for the electric arc furnaces (EAF) for Dillingen and Saarstahl have also been awarded. These plants will produce CO₂-reduced steel from the iron pellets produced in the DRI plant with the addition of steel scrap. The EAF for heavy plate manufacturer Dillinger is also being built by Primetals Technologies and the DSD Steel Group. SMS Group was chosen to build the EAF for wire rod and bar manufacturer Saarstahl.

With the use steel scrap and initial quantities of hydrogen, the systems enable carbon emissions to be cut by up to 55% by the early 2030s, corresponding to an annual reduction of 4.8Mt of CO₂.

The total investment for the conversion to green steel production, including environmental design, infrastructure and logistics measures, amounts to around €4.6 billion. The companies are receiving €2.6 billion in federal and state funding for the project, with the remaining funding being provided by the companies themselves.

At a press conference in which the projects were announced, Stefan Rauber, chairman of the board ofmanagement of Aktien-Gesellschaft der Dillinger Hüttenwerke and Saarstahl AG, stated that the businesses were ‘developing a business model of the future’. ‘‘Our goal is to be the most sustainable steelmaker in Europe. The question is can we reinvent ourselves, and the answer is ‘yes’, we will, with new production methods and business models''.

Dr. Peter Maagh, chief technology officer at Aktien-Gesellschaft der Dillinger Hüttenwerke and Saarstahl AG, added; “With today's award, we are launching an unparalleled production conversion: 70% of our capacitiesare now being transformed into CO₂-reduced steel production. The partnership with Primetals Technologies, DSD, Midrex and SMS is an important building block on our path to climate-friendly steel production in Germany. We are confident that we will be able to implement Power4Steel on schedule with these experienced and reliable partners.’’