H2 Green Steel adds extra Eur4 bil funding for large-scale green steel plant

Swedish H2 Green Steel has secured an additional Eur4.2 billion ($4.5 billion) in new funds and has increased the previously announced equity by Eur300 million, while it has also been awarded Eur250 million grant from the Innovation Fund, to build one of the first large-scale green steel plant and Europe’s first giga-scale electrolyzer, according to a statement released Jan. 22.

Total equity funding to date amounts to Eur2.1 billion. H2 Green Steel has now secured funding close to Eur6.5 billion for the world’s first large-scale green steel plant in northern Sweden.

More than Eur3.5billion out of Eur4.2 billion is in senior debt from a group of more than 20 lenders, including the European Investment Bank, the company told S&P Global Commodity Insights.

In a separate press note, the European Investment Bank (EIB) and the Nordic Investment Bank (NIB) confirmed they will take part in the project finance, with the EIB that will contribute Eur314 million, of which Eur200 is backed by a guarantee from the European Commission under the InvestEU programme, and Eur114 million of intermediated financing to be provided through commercial banks participating in the project financing.

“The steel industry is a strategic sector, being at the heart of the EU economy,” Vice-President of the European Investment Bank, Thomas Östros, said.

“Our commitment to reach net zero by 2050 requires this sector to undergo transformative changes. It is important that the EIB, as the EU climate bank, is supporting H2 Green Steel in its pioneering development for a breakthrough clean technology to produce low-carbon primary flat steel products.”

“No one has scrutinized our project more thoroughly than those who back our financing. This massive commitment from lenders like the European Investment Bank [is] true recognition of the quality of our company,” Henrik Henriksson, CEO of H2 Green Steel said.

H2 Green Steel was founded in 2020 with the ambition to accelerate the decarbonization of the steel industry, using green hydrogen. Traditional primary steelmaking is very energy intensive and produces massive amounts of carbon emissions. The global steel sector is currently responsible for about 8% of global final energy demand and 7% of global CO2 emissions. The green steel from the plant will have a carbon footprint close to zero, with up to 95% less CO2 emissions compared to steel produced the traditional way.

The construction of the Boden plant has already begun, with the production expected at the beginning of 2027 and with half of the initial annual volumes of 2.5 million mt of low-carbon steel already being sold in offtake agreements to customers that range from carmakers to traders to furniture producers.

Platts, part of S&P Global, assessed Northwest European hot-rolled carbon-accounted coil stable on the day at Eur870/mt ($947.517/mt) ex-works Ruhr Jan. 22. The assessment was calculated in line with the sum of Platts daily carbon-accounted steel premium (CASP) assessment and Platts daily hot-rolled coil price assessment in Northwest Europe.

Author Annalisa Villa, annalisa.villa@spglobal.com