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European Commission approves two important hydrogen projects: Economic Affairs and Climate Ministry can fund green hydrogen at BASF and decarbonisation of steel-making at Salzgitter
The European Commission gave the green light this week for two large-scale hydrogen projects by BASF and Salzgitter. This is an important milestone for the Federal Ministry for Economic Affairs and Climate Action in the ramp-up of the hydrogen economy and the decarbonisation of industry in the context of the IPCEI (Important Project of Common European Interest) on hydrogen. Overall, the Federation will join with Lower Saxony and Rhineland-Palatinate to provide more than a billion euros of funding for the projects, the aim being to cut carbon emissions by more than 2.5 million tonnes a year.
Federal Minister for Economic Affairs and Climate Action Robert Habeck said, “The go-ahead from Brussels for the BASF and Salzgitter projects is a core building block on the road to climate-neutral industry in Germany. This signal is more important than ever in the current crisis: we need to send out clear signals for investment in the future. An accelerated energy transition with a faster expansion of renewable energy and the ramp-up of green hydrogen are the right responses to the Russian aggression and the right ways to boost energy security, resilience and competitiveness.
“The two projects approved by the Commission are the first large-scale German industrial projects in the context of the IPCEI on hydrogen. More will follow, thus laying the foundation stone for the hydrogen economy in Germany. This will make manufacturing processes greener, especially in the chemicals and steel industries, which are so important for Germany.”
BASF’s Hy4Chem project will cut emissions from the production processes on the Ludwigshafen site: an electrolyser with a proton exchange membrane is to deliver green hydrogen from 2025, replacing the grey hydrogen currently still being used. The use of the green hydrogen alone can save up to 45,000 tonnes of carbon emissions a year in the manufacture of chemical products.
The ambitious project of Salzgitter Flachstahl GmbH is called SALCOS and will deliver green steel: Salzgitter will set up an electrolyser, a direct reduction unit and an electric arc furnace to replace part of the conventional blast furnace route, thus saving more than 2.5 million tonnes of carbon emissions a year.
The Federal Ministry for Economic Affairs and Climate Action selected the two projects in May 2021 in a competition for funding under the hydrogen IPCEI. Both projects have already been allowed to launch before the funding approval was given.
So far, the European Commission has approved two other Economic Affairs and Climate Ministry projects, for research into stationary fuel cell systems at Bosch and for the serial production of electrolysers at Sunfire; approvals have also been granted for two projects of the Federal Ministry for Digital and Transport. In April 2022, Germany and eight other participating EU Member States presented the “infrastructure wave” to the European Commission; it contains 26 German projects and is currently under consideration.
