The German steelmaking group SHS – Stahl-Holding-Saar has announced the successful completion of a €1.7 billion financing package to support its Power4Steel transformation project. This major initiative aims to decarbonise the company’s operations and progress towards producing climate-neutral steel.
Steel production is a significant contributor to global CO2 emissions, accounting for 7% to 9% of direct emissions from fossil fuel use. SHS, which encompasses the steelmakers Dillinger and Saarstahl, has committed to achieving fully climate-neutral steelmaking by 2045. An interim target has been set to reduce CO2 emissions by 55% by 2030. The Power4Steel programme will employ hydrogen, electric steel production, and scrap steel recycling to meet these goals.
As part of this project, SHS is constructing a new direct reduction plant and two electric arc furnaces at its production sites in Dillingen and Völklingen. These facilities will gradually replace the existing blast furnaces and converters. The company anticipates that by 2028/29, these sites will produce up to 3.5 million tons of CO2-reduced steel annually.
The financing package, secured through a consortium of both national and international banks, will ensure comprehensive funding for the Power4Steel project. It includes corporate and investment financing components, with support from the export credit agencies OeKB of Austria and SACE of Italy. The German Federal Government and the Saarland Regional Government have also provided substantial equity contributions and direct financial support.
SHS CEO Stefan Rauber described this development as a significant milestone towards a low-carbon future. He emphasised that the combination of governmental funding commitments, the placement of orders for core plant units, and the initial securing of green hydrogen supplies mark a decisive step forward. Rauber expressed confidence that climate protection, innovation, and competitiveness must progress in unison.
