The EU Commission has approved 1.3 billion euros ($1.41 billion) in German state aid for steel producer ArcelorMittal to help it decarbonise part of its production processes.
The commission said that the aid was necessary and appropriate to promote the production of green steel and that its positive effects would outweigh any potential distortion of competition and trade in the EU.
“This is a strong boost for economic development and the ramp-up of the hydrogen economy in these regions,” German Economy and Climate Minister Robert Habeck said in a statement.
The new plants are scheduled to enter operation in 2026.
“The use of hydrogen will steadily increase, with plans to eventually use more than 135,000 tonnes of renewable hydrogen per year. This will produce more than 3.8 million tonnes of green steel,” added Habeck.
The approved assistance project includes the construction of a direct reduction plant (DRI) in Bremen and was selected as part of the “IPCEI Hydrogen” (Important Projects of Common European Interest – H2) programme.
This DRI plant will supply three electric arc furnaces (EAF) which will directly reduce iron, one in Bremen and two more in Eisenhüttenstadt.
The carbon savings from DRIBE2 of up to 5.8 million tonnes of CO2 per year by the end of the project period correspond to more than 10% of the emissions of the entire steel industry in Germany..
Germany’s steel industry sponsors one third of the country’s industrial emissions.
