World's Biggest Green Steel Project Raises $4.5 Billion

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The world's largest green steel project, H2 Green Steel in Boden, Sweden, has raised more than 4.2 billion euro (US$4.5 billion) in project financing, including a major grant from the European Union (EU).

The company is currently building its green steel plant, which will use hydrogen created by using renewable energy, to power its steel-making process, which will have 95% lower CO2 emissions than steel made with coke-fired blast furnaces. The new financing increases the previously announced equity raised by 300 million euro (US$325 million), with total equity funding to date amounting to 2.1 billion euro (US$2.3 billion). The company has also been awarded a 250 million euro (US$271 million) grant from the EU Innovation Fund. To date, it has secured funding of close to 6.5 billion euro (US$7 billion) for the project. Supply contracts for the hydrogen, iron and steel equipment are in place. A large portion of the electricity needed has been secured in long-term power purchase agreements, and half of the initial yearly volumes of 2.5 million tonnes of near-zero-emissions steel have been sold in binding five- to seven-year customer agreements.

The project will use 20-megawatt (MW) "scalum" alkaline water electrolysis (AWE) modules from thyssenkrupp nucera, part of Germany's Thyssenkrupp (Essen). H2 Green Steel initially will produce 2.5 million tons of green steel per year, with a planned ramp-up to 5 million tons by 2030. Up to 700 MW capacity of the modules will be delivered. Operations are planned to start at the end of 2025, with a scheduled ramp-up in 2026. Groundworks have been ongoing on the site in Boden since summer 2022.

Industrial Info is also tracking a number of planned H2 Green Steel projects in Spain, Brazil and Canada, alongside those underway in Sweden. In total there are 10 projects with an investment value of more than US$13 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

"No one has scrutinized our project more thoroughly than those who back our financing," explained Henrik Henriksson, chief executive officer of H2 Green Steel. "This massive commitment from our lenders, investors and the Innovation Fund is true recognition of the quality of our company. It's also a big win for the climate as we hope the model will inspire the financing of other decarbonization initiatives in hard-to-abate industries."

One of its key backers in the EU is the European Investment Bank (EIB), which recently announced investments, along with European Commission backing, of more than 300 million euro (US$325 million). "The steel industry is a strategic sector, being at the heart of the EU economy," said Vice President of the EIB Thomas Östros. "Our commitment to reach net zero by 2050 requires this sector to undergo transformative changes. It is important that the EIB, as the EU climate bank, is supporting H2 Green Steel in its pioneering development for a breakthrough clean technology to produce low carbon primary flat steel products. The project paves the way for the development of environmentally friendly steel--crucial for the decarbonisation efforts of the so-called "hard to abate sectors", of which steel is an important one."

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).