German energy provider EWE and steel giant Salzgitter Flachstahl GmbH have signed a landmark, long-term agreement for the supply of 10,000 metric tons of green hydrogen annually.

The deal marks a critical milestone in Germany’s industrial decarbonization strategy, utilizing the country's upcoming national pipeline infrastructure to transition heavily polluting industries toward climate neutrality.

The seven-year agreement, signed on Tuesday in Berlin alongside federal and state political leaders, secures a major initial purchase from EWE’s 320-megawatt electrolysis plant currently under construction in Emden.

Starting in 2030, the green hydrogen will be transported via Germany's newly established Hydrogen Core Network (HCN), a planned 9,040-kilometer national pipeline grid designed to connect major production hubs with heavy industrial consumers.

The massive infrastructure project is rapidly advancing. Following regulatory approval to connect key industrial and storage clusters by 2032, network operators launched a highly successful coordinated capacity reservation process.

Market demand for early capacity bookings has already exceeded operators' expectations, establishing a vital foundation for cross-border supply chains.

Furthermore, the European Commission recently approved a 1.3 billion euro German state aid scheme through the European Hydrogen Bank to fund infrastructure linking North Sea renewable hydrogen production directly to industrial buyers on the core network.

Salzgitter AG will use the green hydrogen to fuel its SALCOS® (Salzgitter Low CO2 Steelmaking) program.

While Salzgitter can currently reduce carbon dioxide emissions by 60% in its direct reduction plant by substituting coal and coke with natural gas, transitioning fully to green hydrogen will allow the plant to eliminate fossil fuels entirely, yielding water rather than carbon dioxide as a by-product.

The contracted 10,000 metric tons will cover approximately 6.5% of SALCOS’s eventual 150,000-ton annual hydrogen requirement, with Salzgitter planning to produce 9,000 tons on-site through its own 100-megawatt electrolyzer, relying on external supply agreements like EWE's for the remainder.

While the contract establishes a firm economic commitment between a major supplier and customer, executives from both companies emphasized that the wider hydrogen market ramp-up requires greater political support.

Gunnar Groebler, chairman of Salzgitter AG, and EWE CEO Stefan Dohler issued joint appeals to policymakers for competitive electricity prices and stable regulatory frameworks to minimize substantial investment risks.

The project has received significant backing from government authorities, including 925 million euros from the federal government for Salzgitter's steel transformation and 267 million euros for EWE’s production infrastructure in Emden.