Steel production uses a lot of energy. In 2020 alone, 1,864 million tonnes of the ubiquitous metal were produced worldwide. And given that around three-quarters of the energy used in steelmaking comes from fossil fuels like coal, each tonne of steel produced throws roughly twice as much CO2 into the atmosphere, accounting for roughly 8% of global carbon emissions.
As we can’t get by without steel, its production is a big target for decarbonisation R&D into how production processes can be made greener. One project looking into this is H2 Green Steel (H2GS), which hopes to provide a solution for the global demand for fossil-fuel-free steel.
Zero-Emissions Steel Production
H2GS, a new development in Northern Sweden, is led by the current CEO of Scania, Henrik Henriksson. With a budget of roughly $3 billion, the project is set to launch a plant in the Boden-Luleå region by 2024.
To produce the electricity required for steelmaking, the plant will use renewables rather than fossil fuel-based energy; plus, it will also utilise an electrolysis facility that will produce hydrogen to replace natural gas. By 2030, the plant is planned to have a production capacity of five million tonnes of high-quality zero-emissions steel, say those involved in the project.
The company says that the plant will be the world’s first large-scale fossil-free steel plant, producing hot and cold rolled and galvanised coils, which it hopes to sell into key markets like transportation, construction, and automotive.
“We want to accelerate the transformation of the European steel industry," says Carl-Erik Lagercrantz, chairman of the H2GS board and Swedish automotive battery maker Northvolt AB, in an H2GS press release.
The company name and typography of H2 Green Steel (stylised as ‘h2 green steel’)
Image credit: H2 Green Steel
A Global Collaboration
H2GS has been developed as a close collaboration between several strategic investors that are global leaders in sustainability. At present, H2GS is in the process of closing a Series A funding round of €50 million from a select group of investors, which includes Scania.
Said Henrik Henriksson: “The climate crisis is the biggest challenge of our time and given steel’s impact on other industries’ sustainable development, a rapid change of the steel industry is extremely important.
“H2 Green Steel will accelerate this change and make Swedish steel world-famous, not only for its quality, but also as the world’s greenest steel.”
While the project is encouraging and shows that investors are showing their commitment to decarbonisation initiatives, which are risky and take longer to deliver returns, H2GS will need the price of green hydrogen to fall in order for its full potential and their goal of ‘zero-emissions’ steel to be realised.