Germany's EWE, Salzgitter Advance Hydrogen Market with Supply Pact
A major hydrogen supply agreement in Germany links large-scale production with industrial demand, marking a key step in the development of the country's emerging hydrogen market.
(P&GJ) — German energy company EWE and steelmaker Salzgitter AG have signed a long-term agreement for the supply of 10,000 metric tons of green hydrogen per year beginning in 2030, marking a significant step in the development of Germany's hydrogen economy.
Under the agreement, EWE will supply hydrogen from its planned 320-MW electrolysis facility in Emden. The hydrogen will be delivered through Germany's developing hydrogen network to support Salzgitter's SALCOS (Salzgitter Low CO2 Steelmaking) program, which aims to reduce emissions from steel production.
The seven-year contract is the first major purchase agreement tied to EWE's Emden hydrogen project and Salzgitter's first large-scale supply agreement with an external hydrogen producer. The annual volume will account for about 6.5% of the hydrogen required for the SALCOS program.
Salzgitter is using natural gas in a direct reduction plant as part of its transition away from traditional blast furnace steelmaking. The company said replacing natural gas with green hydrogen over time is central to its goal of achieving near carbon-neutral steel production. The SALCOS facility could ultimately consume up to 150,000 metric tons of hydrogen annually, while a separate 100-MW electrolyzer at the steelworks is expected to produce about 9,000 metric tons per year.
Executives from both companies said the agreement demonstrates growing momentum for commercial hydrogen projects but warned that additional policy support will be needed to accelerate market development.
"The use of green hydrogen is a key part of our transition to lower-carbon steel production," said Gunnar Groebler, CEO of Salzgitter AG. "This agreement is an important step forward, but broader policy support will still be needed to accelerate hydrogen market development."
Stefan Dohler, CEO of EWE, said the deal shows that hydrogen supply and demand can be connected through long-term commercial agreements.
"This agreement demonstrates that supply and demand for green hydrogen can come together commercially," Dohler said. "The next step is creating the market conditions needed to support additional projects and long-term investment."
Both companies said challenges remain for the hydrogen sector, including electricity costs, regulatory requirements and investment certainty. They called for adjustments to European rules governing renewable hydrogen production to help improve project economics and support wider adoption.
EWE is developing hydrogen production, storage and transportation infrastructure in northwest Germany through its participation in the Clean Hydrogen Coastline project. The company said the Salzgitter agreement represents one of the first major industrial offtake arrangements linked to the project.
Government officials attending the signing ceremony in Berlin described the agreement as an important milestone for Germany's efforts to build a domestic hydrogen market and reduce industrial emissions.