SHS secures financing for hydrogen-based steel production

The SHS – Stahl-Holding-Saar Group (SHS), together with its subsidiaries Dillinger and Saarstahl, has taken a major step toward climate-neutral steel production. As the company announced last week, financing for the transformation project Power4Steel has been successfully secured. The total financing package amounts to around €1.7 billion, providing the financial foundation for the entire investment program, SHS stated in its press release.

As part of the Power4Steel project, a new direct reduction plant and two electric arc furnaces will be built at the Dillingen and Völklingen production sites to gradually replace the existing blast furnaces and converters. This will enable the switch to hydrogen-based steel production, significantly reducing CO₂ emissions. SHS aims to cut these emissions by 55 percent by 2030 and to achieve full climate neutrality by 2045. According to SHS, Power4Steel is one of the largest decarbonization projects in Europe.

“Following funding commitments from the federal and state governments, the ordering of key equipment, and the securing of initial supplies of green hydrogen, the successful completion of overall financing marks another decisive step toward the success of this unique project,” said Stefan Rauber, CEO of SHS and Chairman of the Boards of Saarstahl and Dillinger.

The financing consortium is made up of leading national and international banks and combines corporate and investment financing. The investment financing is secured by export credit agencies, supplemented by substantial equity contributions and public funding from the German federal government and the state of Saarland as part of the €2.6 billion transformation program for the Saarland steel industry.

Markus Lauer, Managing Director of SHS – Stahl-Holding-Saar and Executive Board Member for Finance and Purchasing at Dillinger and Saarstahl, emphasized the close cooperation between industry, finance, and politics. “We share a collective responsibility to drive the transformation toward climate-neutral steel production,” he said. “This is a strong signal for the future viability of the Saarland steel industry and for the importance of cooperation and innovation in the context of the energy transition.”