en.Wedoany.com Reported - European steelmaker Salzgitter will offtake 10,000 tonnes of green hydrogen annually from EWE's 320 MW electrolysis plant in Emden for its Salcos direct reduced iron project at its German Flachstahl plant.

The hydrogen will be transported via Germany's core pipeline network to the Salzgitter Flachstahl plant for low-carbon steel production.

The seven-year agreement is the first green hydrogen offtake contract for EWE's Emden plant, which is scheduled to start operations in 2027.

This offtake volume is expected to cover approximately 6.5% of the Salcos project's future annual hydrogen demand. Salzgitter also plans to produce an additional 9,000 tonnes of hydrogen per year from a 100 MW electrolysis plant built on-site, bringing its total secured supply to around 12% of demand.

Hydrogen infrastructure construction is already underway. Two of Salzgitter's subsidiaries have recently been commissioned to lay 110 km of pipelines to connect the grid to the plant.

Through the Salcos project, Salzgitter aims to reduce its CO2 emissions by 95% by 2033.

Alongside the offtake agreement announcement, the company also called for Germany to "increase investment and efforts" in the hydrogen economy, noting that EU guidelines on "additionality" and power procurement will be crucial for project implementation.

Salzgitter's Executive Board Chairman Gunnar Groebler appealed to policymakers: "Comprehensive measures are still needed to bridge the cost gap and reduce business risks. Otherwise, this contract will remain an exception."

Although green hydrogen for direct reduced iron is a key decarbonization solution, high costs have led several major companies to abandon their transition plans.

ArcelorMittal, the world's second-largest steelmaker, has delayed the final investment decision for its decarbonization project despite receiving approximately €3.5 billion ($4 billion) in subsidies for its direct reduced iron facility.

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