BRUSSELS/SAARBRÜCKEN (dpa-AFX) - The EU Commission has cleared the way for the climate-friendly restructuring of Saarland's steel industry with a state claim in the billions. It approved the project, which provides for a direct grant of 2.6 billion euros from the federal and state governments to Stahl-Holding-Saar, as the authorities announced on Tuesday.

The aim of the project is to switch from fossil fuels such as coal and coke to hydrogen in the production of steel in the medium to long term. From 2027, up to 3.5 million tons of low-CO2 steel are to be produced annually in Saarland and 4.9 million tons of CO2 saved. More than 14,000 people are employed in the Saarland steel industry.

According to the Federal Ministry of Economics, around two thirds of steel production will initially be converted using new types of blast furnaces. These are due to go into operation in 2027.

The measure will support the goals of the EU hydrogen strategy and the Green Deal climate plan, according to the EU Commission. The payment will help to end dependence on fossil fuels from Russia and rapidly advance the green transition. With the Green Deal, the EU aims to become climate-neutral by 2050. The strategy includes measures in areas such as energy, transport, industry and agriculture.

The federal government pays in particular

The federal government will cover around 70 percent of the 2.6 billion euro requirement, with Saarland paying the remaining 30 percent. According to the steel industry, the conversion will cost around 3.5 billion euros in total. Federal Minister for Economic Affairs Robert Habeck announced the commitment to the claim just over a week ago during a visit to Saarland, but referred to the pending approval from Brussels. This is now available.

The next step will now be to prepare the issue of the national notice of claim, the Ministry of Economic Affairs announced. "This is extremely good news for the industrial transformation in Saarland and throughout Germany," said Habeck.

According to the ministry, this is the third time, after Salzgitter AG and Thyssenkrupp Steel Europe, that the decarbonization of a steel location in Germany with the help of hydrogen has been requested. The state aid approval process for another ArcelorMittal project at the Bremen and Eisenhüttenstadt sites is still ongoing at the EU Commission./hus/DP/mis