Germany to support green steel at Stahl-Holding-Saar with 2.6 billion eur

BERLIN (Reuters) - The German government plans to support steelmaker Stahl-Holding-Saar's (SHS) in its transformation towards greener production with 2.6 billion euros ($2.80 billion), economy minister Robert Habeck said on Monday.

After a constitutional court ruling rattled Germany's spending plans a few weeks ago, many companies hoping for government subsidies to finance their green transition have been left in limbo.

Habeck said Berlin was about to receive the green light for the aid from the European Commission. "That would be the last step," he said during a visit to SHS in the state of Saarland, on Germany's border with France.

He stressed the importance of helping the steel industry with the costly reform of its production in line with climate goals, warning that otherwise Germany's attractiveness as a location for companies and its supply chains were under threat.

"If steel production were to disappear here, the location would not only lose steel, but also the automotive industry, the supplier industry," the minister said.

The IG Metall trade union welcomed the state support for SHS. "Now the real work begins," local representative Joerg Koehlinger said in a statement.

($1 = 0.9291 euros)

(Reporting by Tom Kaeckenhoff, writing by Kirsti Knolle, editing by Rachel More and Miranda Murray)