Hydnum Steel, a greenfield low-carbon steelmaking project based in Spain, secured a EUR150 million investment from COFIDES, a state-owned fund manager, for the construction of its green steel plant in Puertollano, Spain, Hydnum said on 5 August.
Annual capacity of the plant will be 2.7 mt of low-CO2 steel, and its carbon emissions under Scopes 1-2 are planned to be 98% lower compared to the traditional blast furnace-basic oxygen furnace (BF-BOF) route.
The funds were committed from the co-investment fund (FOCO), managed by COFIDES. The transaction is part of a financial plan that will mobilise a total investment of EUR1.5bn, approximately EUR600m of which will correspond to equity, and around EUR1bn will be debt.
Hydnum Steel has already obtained approval from the Guadalquivir Hydrographic Confederation for the hydrological adaptation of the surrounding area, as well as secured 500 MW of access capacity to the national electricity grid.
Construction of the plant is scheduled to start at the end of 2026.
According to McCloskey’s Global Green Steel Profile, the first phase of the project involves the construction of a 1.5 mt/y electric-arc furnace (EAF)-based mini-mill with hot charging from a continuous casting machine (CCM) to a rolling line producing hot-rolled coils and hot-rolled pickled and oiled coils. The mill will operate with 100% fossil-free energy and will benefit from full circularity of resources and by-products.
The company said “the project has garnered significant interest from potential clients, having reached agreements covering 100% of the production capacity of the first phase for its initial five years of operation.”
European greenfield low-CO2 steel projects have been following similar routes, signing agreements for green steel supply with buyers before construction of the new facilities has been completed.
The supply of green steel in Europe has been limited to trial plants with scarce volumes available for sale, existing EAF flat-steel producers, and steelmakers applying mass-balance approaches. Buyers have started to show less interest in the latter, preferring steel with low embedded emissions.
While demand for green steel remains low compared to the volumes traded in the traditional steel market, sources reported a gradual increase in demand, with more new buyers starting to make trial purchases.
The latest deals for smaller lots of green hot-rolled coil (HRC) have been concluded at premiums of EUR150-180/t.
Author: Maria Tanatar
