H2 Green Steel and EIT InnoEnergy will develop a “giga-scale” green hydrogen-fueled steel production facility in northern Sweden, with sales targeting large European automotive manufacturers, the companies said Feb 23.
Production will begin in 2024 and by 2030, with annual production capacity of 5 million mt of CO2-free flat steel products, the companies said.
The plant will produce steel though the direct-reduced iron method, an H2GS spokeswoman told S&P Global Platts.
The site will be located in Sweden’s Boden-Lulea region, which offers ready access to cheap renewable energy, high-quality iron ore, a port and expertise in metallurgy and steel production, the companies said in separate statements.
Green hydrogen refers to hydrogen derived from renewable energy sources.
The H2GS Initiative is the first flagship project of the European Green Hydrogen Acceleration Center, spearheaded by EIT InnoEnergy with the support of Breakthrough Energy. EGHAC aims to developing an annual Eur100 billion green hydrogen economy by 2025 that could create half a million direct and indirect jobs, EIT InnoEnergy said.
“The H2 Green Steel initiative has the scale, ambition, innovative business model and implementation team to become a flagship of Europe’s position at the forefront of the transformation of energy-intensive industries,” EIT InnoEnergy CEO Diego Pavia said.
Carl-Erik Lagercrantz, H2GS and Northvolt’s chairman, said the plan is aimed at accelerating the transformation of the European steel industry.
“Electrification was the first step in reducing carbon dioxide emissions from the transportation industry,” Lagercrantz said. “The next step is to build vehicles from high-quality fossil-free steel.”
Henrik Henriksson, currently CEO of Swedish commercial vehicle-maker Scania, will lead the company. By investing in and partnering with H2 Green Steel, Scania is advancing towards emissions-free products across the whole value chain, that company said.
“A Scania truck weighs about six tons and five of those are steel, which today unfortunately is produced with a substantial carbon footprint,” said Anders Williamsson, that company’s executive vice president and head of purchasing.
H2GS is in the process of closing its series A equity financing of Eur50 million from investors including EIT InnoEnergy, Vargas, Scania, SMS group, BILSTEIN GROUP, Cristina Stenbeck, Daniel Ek, Altor Fund V, and IMAS Foundation, H2GS said.
The total financing for the first phase of the project amounts to approximately Eur2.5 billion, which will be raised through a combination of equity and green project financing. Morgan Stanley, Societe Generale and KfW IPEX-Bank, are acting as financial advisors to H2GS. Sweco is advising in the engineering and permit process, H2GS said.
An important source of inspiration for the initiative is the groundbreaking HYBRIT project and its founders SSAB, LKAB, and Vattenfall, H2GS said.
The global steel industry accounts for 7%-8% of the planet’s CO2 emissions.
— Annalisa Villa
