German steelmaker Salzgitter has begun decarbonising its HKM subsidiary, signing Tenova to build a 2.5-million-tonne electric arc furnace in Duisburg with €200m of state funding and completion due in 2029.
Salzgitter has started the decarbonisation of Hüttenwerke Krupp Mannesmann (HKM), its Duisburg subsidiary, signing a contract with Tenova for the engineering, delivery and installation of an electric arc furnace, according to a report by EUROMETAL. The furnace replaces blast-furnace capacity with lower-emission steelmaking at one of Germany’s largest integrated sites.
The new furnace will be Germany’s largest and the second largest in the European Union. It has an annual capacity of 2.5 million tonnes and a planned output of 2 million tonnes of green steel. The line uses Tenova Constell technology, feeding scrap into the system continuously by conveyor. Exhaust heat preheats the incoming scrap, which cuts energy use against conventional electric arc furnaces.
Raw materials will be either ferrous scrap or direct-reduced iron, fed continuously through the conveyor system. The project receives €200m in funding from the federal government and the state of North Rhine-Westphalia under the “Federal Funding for Industry and Climate Action” programme. The implementation phase starts in August 2026 and completion is scheduled for 2029.
The step follows Salzgitter’s full takeover of HKM and sits alongside its SALCOS programme, which shifts primary steelmaking towards hydrogen-based direct reduction. HKM has long run integrated blast-furnace steelmaking at Duisburg, a route that carries some of the highest carbon intensity in heavy industry. An electric arc furnace running on scrap and DRI gives the site a way to keep output while cutting emissions per tonne.
The economics still depend on power prices and scrap supply. Electric arc furnaces need reliable low-carbon electricity to deliver their full climate benefit, and green steel commands a premium that buyers have been slow to pay during a weak market for European steel. State funding narrows the gap on capital cost, but running costs will decide whether the line competes.
For European steelmakers weighing costly blast-furnace replacements, the HKM project shows how scrap-based electric steelmaking, backed by public money, can keep large integrated sites open while lowering emissions. Completion in 2029 will test whether green steel can scale at volumes that matter to construction, automotive and engineering buyers across the region.
