What the project is about
Power4Steel is a large-scale climate protection and industrial transformation initiative of the Saarland steel industry. Its goal is to enable climate-neutral steel production by replacing conventional blast furnace technology with hydrogen-based direct reduction and electric arc furnace technology.
The project includes the construction of a new direct reduction plant and two electric arc furnaces at the Dillingen and Völklingen production sites, while also supporting the development of a regional hydrogen economy and its connection to the European Hydrogen Backbone.
Through this transformation, Stahl-Holding-Saar will convert around two thirds of its production to hydrogen-based steelmaking, enabling the production of more than three million tonnes of green steel. In a later phase, the remaining production capacity is also planned to transition to low-carbon electric arc furnace technology.
Why it matters
The European steel industry accounts for around 5% of the European Union's total CO₂ emissions. Producing one tonne of conventional crude steel generates approximately 1.6 to 2.2 tonnes of CO₂. In Germany - the EU's largest steel producer - the sector emits around 53–55 million tonnes of CO₂ annually, representing approximately 28–30% of the country's industrial emissions. The main source of these emissions is the traditional blast furnace–basic oxygen furnace route, where coke is used to reduce iron ore.
Achieving Europe's climate ambitions requires the comprehensive decarbonisation of energy-intensive industries. By combining hydrogen-based direct reduction with increased scrap utilisation and electric arc furnace technology, Power4Steel pursues a bold transformation pathway towards climate-neutral steel production and a more sustainable industrial future.
Our role in the project
- Accompanying the project from its initial conception through to the successful completion of the public funding process between 2021 and 2024. EURICE is not involved in the subsequent technical implementation or construction phase of the project.
- Positioning and safeguarding the project's granting within the IPCEI Hydrogen (Important Projects of Common European Interest – Hydrogen) framework.
- Advising and supporting the State aid notification and approval process by the European Commission.
- Successfully secured €2.6 billion in public funding (federal and state level), complemented by an additional €1.7 billion financing package to ensure the project's implementation.
- Designing networking and knowledge transfer activities connecting key stakeholders from research, academia, industry and policy-making.
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Explore VALORISATION PRACTICESProject Facts & Figures
- Full title
- Power4Steel – Decarbonisation of the Saarland Steel Industry
- Thematic field
- Industrial technologies, steel industry
- Duration
- 2023-2032
- Budget
- ≈ EUR 4 billion
- Project website
- https://www.pure-steel.com/power4steel/