# European industrial decarbonization efforts

> Live situation record from CLSTR: https://clstr.news/situations/european-industrial-decarbonization-efforts
> Updated: 2026-09-28T02:00:00.000Z. Sources: 20. Developments: 2.

Research indicates that European heavy industries, including steel, cement, and chemicals, can achieve decarbonization through 2050 without sacrificing economic growth. A study suggests that a 90% reduction in greenhouse gas emissions by 2040 is possible by utilizing green hydrogen and recycled scrap, though cement production may require carbon capture technology to mitigate inherent CO2 releases.

In practice, the German steel industry is undergoing a massive climate transformation. In Saarland, a shift from coal and coke to hydrogen-based production via direct reduction plants is centered on a 4.6 billion euro project led by Stahl-Holding-Saar (SHS). This initiative is supported by 2.6 billion euros in federal and state subsidies, with the remaining costs covered by the companies involved. New facilities in Dillingen and Völklingen aim to reduce CO2 emissions by up to 55 percent—approximately 4.8 million tons annually—by the early 2030s, targeting CO2 neutrality by 2045.

While political leaders, including Chancellor Friedrich Merz and Saarland Minister-President Anke Rehlinger, have emphasized the importance of maintaining domestic steel production for industrial sovereignty, significant hurdles remain. The industry faces the scarcity and high cost of green hydrogen, which experts predict could cost at least twice as much as grey hydrogen through 2030. Consequently, the transition will initially rely on natural gas before fully switching to hydrogen. Additionally, the sector faces ongoing competition from cheaper international steel imports. Major players such as Thyssenkrupp and Salzgitter AG continue to pursue similar transformation projects across Germany.

## Claims

- The transformation of the steel industry in Saarland costs approximately 4.6 billion euros. (corroborated by 15 sources)
- The federal and state governments are providing 2.6 billion euros in subsidies for the project. (corroborated by 14 sources)
- The goal is to achieve CO2 neutrality by 2045. (corroborated by 13 sources)
- The transition will initially use natural gas before switching to hydrogen. (corroborated by 13 sources)
- The new facilities in Dillingen and Völklingen aim to reduce CO2 emissions by up to 55 percent by the early 2030s. (corroborated by 13 sources)
- Thyssenkrupp and Salzgitter AG are also working on similar transformation projects. (corroborated by 10 sources)
- Commissioning of the new plants is planned for 2028/29. (corroborated by 3 sources)
- Green hydrogen is currently scarce and significantly more expensive than fossil alternatives. (corroborated by 2 sources)
- Experts predict green hydrogen will cost at least twice as much as grey hydrogen in 2030. (corroborated by 2 sources)
- The transformation in Saarland is currently on schedule. (corroborated by 2 sources)

## Timeline

### 2026-09-28: Saarland steel industry begins 4.6 billion euro green transformation

Saarland's steel industry is investing 4.6 billion euros to transition to green hydrogen production, aiming to cut CO2 emissions by 55 percent by the early 2030s with significant government subsidies.

18 sources. https://clstr.news/cluster/german-steel-industry-invests-billions-in-hydrogen-based-climate-transformation

### 2026-09-15: Europe can decarbonize industry without losing growth, study finds

A new study suggests Europe can reduce industrial emissions by 90% by 2040 using green hydrogen and carbon capture without losing its manufacturing base, though significant investment is required.

2 sources. https://clstr.news/cluster/europe-can-decarbonize-industry-without-losing-growth-study-finds

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Cite as: European industrial decarbonization efforts. CLSTR, https://clstr.news/situations/european-industrial-decarbonization-efforts