The H2 Green Steel project follows a demand for fossil-free steel, with the global steel industry currently representing around seven per cent of global CO2 emissions.
The plant will use renewables to provide electricity for steel making processes and for an electrolysis facility that will produce hydrogen to replace natural gas in the steel making process.
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Set to be located in the Boden-Luleå region of northern Sweden, H2 Green Steel (H2GS) will begin production in 2024 and by 2030 will have annual production capacity of five million tons of steel, the company announced. The initiative is expected to create 1,500 jobs in the Norrbotten region.
H2GS will be led by Henrik Henriksson, currently CEO of Scania, and has taken inspiration from the HYBRIT project and its founders SSAB, LKAB and Vattenfall. H2GS said it looks forward to a close collaboration with the founders, sharing the vision to position Sweden at the ‘forefront of fossil-free steel production’.
“We want to accelerate the transformation of the European steel industry,” said Carl-Erik Lagercrantz, chairman of the board of H2GS and battery maker Northvolt. “Electrification was the first step in reducing carbon dioxide emissions from the transportation industry. The next step is to build vehicles from high-quality fossil-free steel.”
Currently, H2GS is in the process of closing its series A equity financing of €50m from a group of investors including Vargas, Scania and SMS group amongst others.
“A Scania truck weighs about six tonnes and five of those are steel, which today unfortunately is produced with a substantial carbon footprint,” said Anders Williamsson, executive VP and head of purchasing at Scania.
“By investing in and partnering with H2 Green Steel we are now further accelerating the journey towards emission free products across the whole chain. It’s a significant increase in ambition, which will not only contribute to Scania delivering on the goal of the Paris Climate Agreement, but also raising the bar even further.”
The total financing for the first phase of the project will reportedly amount to around €2.5bn, raised through equity and green project financing. Morgan Stanley, Societe Generale and KfW IPEX-Bank are acting as financial advisors, while Sweco is advising in the engineering and permit process.
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