Mercedes-Benz Invests in Green Steel

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe's largest planned green steel project in Boden, Sweden, is quickly accelerating thanks to a number of recent wins, including a deal with German car major Mercedes-Benz (Stuttgart, Germany) and the securing of a full environmental permit for the plant.

The luxury carmaker has signed a deal with Sweden's H2 Green Steel, which is building the hydrogen-powered plant project in Boden, to take 50,000 tonnes of green steel annually for use in its European production. The company--an early investor in the project--said that it is also working with H2 Green Steel and partners in the U.S. and Canada to create a green steel operation in the U.S. It will see green steel produced in North America for Mercedes' manufacturing plants in North and South America.

Industrial Info is tracking the construction of the Boden plant, which aims to begin production next year with an estimated production capacity of 2.5 million tonnes of high-quality steel, ramping up to 5 million tonnes by 2030. Traditional blast furnace-based technology will be replaced by direct reduction reactors using green hydrogen from an electrolyser plant powered by renewable energy. The facility is expected to reduce 95% of carbon dioxide (CO2) emissions compared to traditional steelmaking. "With the supply deal of around 50,000 tonnes of almost CO2-free steel from H2 Green Steel for our manufacturing plants in Europe, Mercedes-Benz and H2 Green Steel are accelerating the creation of a decarbonised, regional and resilient steel supply chain," said Markus Schäfer, Mercedes' chief technology officer for development and procurement. "At the same time, we are taking our partnership to the next level with the aim of establishing a sustainable steel supply chain in North America, another important step towards making the auto industry more resilient and sustainable."

Henrik Henriksson, chief executive officer, H2 Green Steel, added: "H2 Green Steel exists because pioneering companies in the automotive industry, like Mercedes-Benz, signaled the transition in the steel industry was too slow for them to meet their climate targets. We have a partner with whom we can raise the bar when it comes to supply chain emissions, circularity and social sustainability. They are a very strong player to liaise with for our European operations, but naturally also as we endeavor into the steel value chain in North America."

The company has reported a number of wins in recent months including a seven-year, US$2 billion deal with Italian steel group Marcegaglia Steel for the delivery of green steel to Marcegaglia's operations in southern Europe, U.K. and Poland. For additional information, see May 8, 2023, article - Clean Steel Bonanza for Sweden's H2 Green Steel.

H2 Green Steel also confirmed that the Boden plant has received a full environmental permit from the country's Land and Environmental Court. It had received a partial permit last year that allowed it to start plant construction, but the full permit will allow the company to start steel production at the plant next year. The company stated that the operation is not only large in size--covering about 270 hectares--it is also "complex and is classified as class A operations in the Environmental code." The entire process, from submitting the application to full permit, took less than 18 months. Henriksson commented: "This is also a big day for Sweden where we at the company, together with all the other parties involved, have shown that it truly is possible to have a speedy process in complex permit matters in Sweden."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).