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April, 18th 2021

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FEB 23

New hydrogen-based steelmaking project launches in Sweden


H2 Green Steel (H2GS) plans to build a hydrogen-based steelmaking plant in Boden-Luleå, northern Sweden, that will produce sheet for large European OEMs. Production will begin in 2024, with capacity of 5 million tonnes/year targeted by 2030, the firm tells Kallanish.

The company, to be headed by current Scania chief executive Henrik Henriksson, will integrate a giga-scale green hydrogen plant into the steelworks, which will produce hot and cold rolled coil, as well as galv. Power will be sourced from hydroelectric power plants in the Luleå area, as well as wind farms.

Construction is expected to start by mid-2022, with 2.5m t/y of HRC and CRC capacity to be reached by 2026. The plant will use as feedstock a combination of its own-produced direct reduced iron and “virgin” scrap sourced from automotive stamping plants, it says. Iron ore procurement contracts are yet to be signed but the firm is in talks with local miners LKAB and Kaunis Iron.

“An important source of inspiration for the initiative is the ground-breaking Hybrit project and its founders SSAB, LKAB, and Vattenfall,” H2GS says. “H2GS looks forward to a close collaboration with the Hybrit-founders, sharing the vision to position Sweden at the forefront of fossil-free steel production… H2GS is built on the experience and lessons learned from the establishment of [Swedish battery developer] Northvolt.”

Northvolt was founded by Vargas Holding, which is also the founder of H2GS.

“Electrification was the first step in reducing carbon dioxide emissions from the transportation industry,” says Carl-Erik Lagercrantz, chairman of H2GS and Northvolt. “The next step is to build vehicles from high-quality fossil-free steel.”

Asked how H2GS plans to compete in the saturated European flat steel market, Vargas chairman Harald Mix said: “This is not steel, this is green steel – this is a market that doesn’t exist today… We’re not going to compete with flat steel, brown steel, but we plan to create a new category.”

H2GS is in the process of closing its series A equity financing of €50 million ($61m) from investors. The total financing for the first phase of the project amounts to approximately €2.5 billion, which is planned to be raised by end-2021 through a combination of equity and green project financing.

H2GS is expected to create 1,500 direct jobs in the Norrbotten region and increase Swedish net export value by around SEK 30 billion ($3.6 billion).

The fossil-free steelmaking Hybrit joint venture is scheduled to start construction in 2023. Last year LKAB successfully trialled using bio-oil at its pellet plant in Malmberget.

Adam Smith Germany