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Hydrogen economy at the heart of the EU

Germany’s Saarland is seeing the development of an interesting and promising new industrial sector that offers the prospect of climate neutrality for energy-intensive industries.

Germany’s Saarland – an industrial hub that wins companies over with its central location

As a traditional industrial location firmly rooted in the automotive, steel and energy industries, the companies, research institutions and political arena in Germany’s Saarland are driving a vital process of change. Production and products are being adapted to the requirements of clean energy and climate neutrality. Hydrogen technology is offering particular hope for the future.

 

Anke Rehlinger, Minister President of Saarland, is a partner and supporter of the state’s hydrogen economy

Minister President Anke Rehlinger is convinced of the huge potential to be found in the production and use of hydrogen in this area: ‘Hydrogen represents a way of updating industry and transport. In the steel industry, hydrogen is the ideal solution for sustainably produced steel, and one that we are putting to use in Germany’s Saarland. In the future, Germany’s Saarland hopes to sit at the heart of a European pipeline network for H2, as our industry will be using more hydrogen than we can produce here. Nevertheless, Germany’s Saarland will also be embarking upon H2 production, for example in Fenne. Hydrogen is the music of the future to a Saarland tune, and the orchestra has already selected its instruments. This is also evident from the activities of  Bosch, Schäffler and other companies promoting the production of fuel cells.’

The Völklingen-Fenne power plant site is hugely important to STEAG, particularly given the planned ‘HydroHub Fenne’ hydrogen project.

mosaHYc – using existing gas infrastructure to transport hydrogen, even across borders

100 kilometres of gas infrastructure is being put in place by the companies Creos and GRTgaz as part of the mosaHYc project. To do so, the distribution system operators are making use of existing gas infrastructure. The aim is to establish a cross-border high pressure grid for transporting hydrogen, allowing hydrogen producers and consumers in the region to develop business models for industry, the heating market and the transport sector. A current study is reviewing the interaction between different pipeline sections in Germany and France, as well as looking at safety-related aspects. Existing pipelines are being examined and preparations are being made for the switch to hydrogen. The existing infrastructure will be supplemented with pipeline sections linking in major consumers, i.e. hydrogen sinks.

New production processes and products

Germany’s first hydrogen-based steel production plant

SHS Stahl-Holding-Saar and the major companies Dillinger and Saarstahl began paving the way for climate-neutral steel back in 2020. CO2 emissions have been reduced by using process gas with a high hydrogen content in the blast furnace. In the future, green hydrogen will also be playing a key role in decarbonisation. We spoke to Christian Weber, Innovation Manager at SHS Stahl-Holding-Saar, about the technical innovations required and the huge challenges facing the steel industry:

Christian Weber, Innovation Manager at SHS Stahl-Holding-Saar

gwSaar:

Mr Weber, the SHS group is the first steel company in Germany to use hydrogen in its blast furnaces. It is frequently said that it is vital that the steel industry has a hydrogen strategy. Is that really the case?

Christian Weber:
For us I would absolutely say yes, as we focus on carbon direct avoidance, meaning that we want to avoid producing CO2 at all wherever possible. The only way to achieve our long-term climate goals is by using hydrogen as a medium. Other approaches include carbon storage, i.e. capturing and storing the CO2 resulting from the process, and carbon capture usage, i.e. capturing and making use of this CO2. We are also working on the latter of these – for example, we are developing processes to transform slag and CO2 into building materials. However, this of course only ever represents a small level of savings in our ultimate quest to become climate-neutral.

The crucial potential for eliminating CO2 clearly lies in the process changes that we have already begun. And hydrogen offers major potential on our path to decarbonisation, which is why we also want to integrate it into the process as early as possible.

gwSaar:
Mr Weber, the SHS group is the first steel company in Germany to use hydrogen in its blast furnaces. It is frequently said that it is vital that the steel industry has a hydrogen strategy. Is that really the case?

Christian Weber:
For us I would absolutely say yes, as we focus on carbon direct avoidance, meaning that we want to avoid producing CO2 at all wherever possible. The only way to achieve our long-term climate goals is by using hydrogen as a medium. Other approaches include carbon storage, i.e. capturing and storing the CO2 resulting from the process, and carbon capture usage, i.e. capturing and making use of this CO2. We are also working on the latter of these – for example, we are developing processes to transform slag and CO2 into building materials. However, this of course only ever represents a small level of savings in our ultimate quest to become climate-neutral.

The crucial potential for eliminating CO2 clearly lies in the process changes that we have already begun. And hydrogen offers major potential on our path to decarbonisation, which is why we also want to integrate it into the process as early as possible.

gwSaar:
You want to make Saarland’s steel production climate neutral. Can you briefly outline your strategy?

Christian Weber:
In our CO2 strategy, we set out a series of options for measures and projects to enable us to produce climate-neutral steel by 2045.

We are currently giving priority to projects that will eliminate the largest amount of CO2. 90% of our CO2 emissions come from the blast furnace and the LD converter in the steelworks. For us, transformation means a need to find replacements for these two production stages. This involves direct reduction – the alternative to the blast furnace – and an electric arc furnace (the unit that produces crude steel) to replace the LD converter.

In phase one, which we have already begun, we are reducing the CO2 emissions from our existing pathway. This additional potential for CO2 savings, alongside a change in technology, will help us achieve our interim targets in 2030.

We have been using process gas from our own production as coke oven gas for injection into our blast furnace since 2020. This process gas has a hydrogen content of 50 to 55 percent. The next step, as part of the H2SYNgas project, will be to employ a new process that enables us to use larger amounts of hydrogen as a reducing agent for reducing iron ore in the blast furnace. Both of these projects will play a major role in reducing CO2 on our current pathway. Together, we can expect them to achieve CO2 savings of approximately 11 percent.

In phases two and three, we are then planning an ongoing process of switching to new technologies, namely an electric arc furnace and direct reduction. This switchover requires several billions in investment, as we will need to build completely new plant equipment that will gradually replace our existing pathway.

System for injecting coke oven gas (copyright: Dirk Martin, Saarstahl)

gwSaar:
What are the biggest challenges in this?

Christian Weber:
Our goal is to build up sufficient EAF (electric arc furnace) capacity and reduce our blast furnace capacity by 2030. We are therefore also promoting CO2 reduction projects and the development of new technology.

This is because one challenge we face is the fact that the entire transformation must be handled in ongoing production. The whole product portfolio will be switched over to the new technology. Our product quality is clearly very high for Dillinger and Saarstahl, and we must of course retain this same level of quality with our new pathway.

The switchover must also meet all infrastructure requirements. The power supply and hydrogen capacities available must be sufficient and make economic sense. As a single example, the electric arc furnace that we are currently planning to integrate into our site requires regional electricity suppliers or network operators to implement various measures so that we can deploy this as planned.

In addition, the political conditions must be created to ensure that we remain competitive throughout the entire transformation process. The technology switchover must be carried out alongside ongoing production in existing facilities, meaning that it can only be implemented gradually. During the period until we have completed the conversion, we will not be running at our ideal operating point and will be at a clear competitive disadvantage.

gwSaar:
When do you plan to have the transformation completed by?

Christian Weber:
2045 – perspective is also required. The amount of power and hydrogen required will not be available any earlier than that. We may be able to develop the technology more quickly, but it is likely that it will not be possible to implement the infrastructure requirements any faster. However, if we manage to stick to our roadmap, then we will already have replaced much of our portfolio by 2030.

gwSaar:
SHS Stahl-Holding-Saar is involved in numerous hydrogen projects in Saarland. What do you consider to be the strengths of this area?

Christian Weber:
This region has all of the players required for a hydrogen value chain. This therefore presents an opportunity to establish such a value chain at a very early stage. An isolated solution would be a possibility to begin with. This could function straight away, before supply is secured via a connection to a European hydrogen network. Theoretically, we also have the ability to use hydrogen via the injection of coke oven gas into the blast furnaces, a process that is already in place. The demand for hydrogen is therefore already there. This means that investors in hydrogen production projects can see a certain market and are targeting the areas with major hydrogen sinks. Our continuing promotion of decarbonisation and any direct reduction we contemplate in the area serve as an additional, significant scaling factor. The expansion of hydrogen capacity could also benefit smaller users, i.e. companies that do not have high requirements themselves and would not instigate supply.

The federal government is therefore supporting a large-scale collaborative research project, of which we are a part, to quickly build up the hydrogen economy in this area. French partners are also involved, another strength and evidence of cross-border thinking.

One real advantage of Saarland is its proximity to the world of politics, which is engaging in numerous areas. This is definitely one of our strengths – everything is just that little bit smaller.

gwSaar:
Climate neutrality and the energy revolution also play a key role in Dillinger and Saarstahl’s sales markets, don’t they?

Christian Weber:
Absolutely. Dillinger’s primary sales markets currently include the offshore wind market, to which Dillinger supplies steel sheets for creating foundation structures. Everything below the water line, all the elements that you do not see (known as monopiles), are made of our steel. We have already supplied around 80 offshore wind farms in Europe. We are expecting this number to increase significantly as more offshore wind farms are erected. Saarstahl’s innovative products are helping to provide solutions to global challenges such as mobility, energy efficiency and safety.

Components for stationary and mobile fuel cells

Bosch is repositioning its factory in Germany’s Saarland: it previously primarily made modern diesel systems, injectors and common rails for vehicles, but in the future will be manufacturing components for fuel cells. We spoke to Oliver Frei, Commercial Plant Manager at Robert Bosch GmbH, Homburg, about the objectives and challenges of such a change:

gwSaar:
Bosch has positioned itself as a system provider for stationary fuel cells, with its own added value in the fields of cells, stacks and other components. Can this be viewed as contributing to the energy revolution?

Oliver Frei, Commercial Plant Manager at Robert Bosch GmbH in Homburg

Oliver Frei:
We are indeed contributing to the energy revolution. Bosch is planning to use stationary fuel cell systems – e.g. in the form of networked power plants – in cities, factories, trade, commerce and maritime transport. The market for decentralised energy production is estimated to reach 20 billion euros by 2030. Pilot facilities are in operation at various Bosch sites, including Homburg. Bosch is investing more than 400 million euros in developing stationary fuel cell systems, with plans for mass production to begin in 2024. Cells and stacks are being manufactured in Bamberg, ‘hotboxes’ in Homburg, and finished systems in Wernau.

gwSaar:
So in future, production in Homburg will not be limited to this one new product, but will instead be broader?

Oliver Frei:
The Homburg site is part of Bosch’s Powertrain Solutions division, so our current and future core business relates to drive technology. We are manufacturing components for mobile fuel cells that could in the future serve as energy sources for electric motors in vehicles. Electric air compressors and hydrogen metering valves are for example required to supply fuel cells with oxygen and hydrogen. The first mass production will begin this year. We are also already working on developing hydrogen tank valves.

gwSaar:
Do you think that this is the future of the automotive industry?

Oliver Frei:
We are covering two axes: firstly, electrifying mobility by means of both batteries and fuel cells, and secondly, making further improvements to combustion engines and using renewable fuels. Wherever hydrogen is used, it needs to be produced using renewable energies as far as possible.
For mobile fuel cells, we believe that they will initially appear on the market in heavy goods vehicles. This type of drive can be operated as virtually carbon-neutral and pollution-free using green hydrogen. In addition, this is under similar conditions to conventional drive trains, e.g. long ranges, short refuelling times and no payload restrictions.

gwSaar:
What challenges does such a comprehensive reorientation pose for production and staff?

Oliver Frei:
Firstly, our new business has to be funded by our previous core business of diesel technology. Ensuring that the site is competitive is therefore one of our most important tasks. This is already in the pilot phase, where the foundations are being laid for competitive mass production business in the future.

Secondly, we have to make sure that our employees on board, understand the importance of the change, and are actively involved. Further training is also crucial: we are particularly relying on solid expertise in digitalisation, as this is a fundamental prerequisite for ensuring that factories of the future remain competitive.

gwSaar:
What benefits would you say that Germany’s Saarland offers?

Oliver Frei:
In Germany’s Saarland, routes are quite literally shorter than elsewhere. We particularly value the excellent contacts with decision-makers in the city of Homburg, the district of Saarpfalz, and the state as a whole.

Furthermore, through associations, committees and networks, we come into contact with committed colleagues with whom we can hold discussions and join forces in our common goal of further developing Germany’s Saarland as a hub of industry.

New collaborations and partners

As well as the examples and major projects mentioned above, Germany’s Saarland also has steadily increasing expertise in the hydrogen economy. The benefits of Germany’s Saarland as a location are therefore clear. Developers and suppliers encounter energy-intensive industrial companies undergoing a process of transformation, local businesses with experienced specialists that are expanding or adjusting their product portfolios, and a prestigious research landscape, as well as receiving unconditional support from the world of politics.

Click to see the Hydrogen expertise in Germany´s Saarland and the surrounding region:

 

Learn more: Germany’s Saarland

Your contact:

Anja Petschauer

Director
Marketing and Promotion
gwSaar Gesellschaft für Wirtschaftsförderung Saar mbH

+49 (0)6893/9899 612

» a.petschauer@invest-in-saarland.com

Author:
Anja Petschauer

Director Marketing
gwSaar Gesellschaft für Wirtschaftsförderung Saar

a.petschauer@invest-in-saarland.com