H2 Green Steel
Assembly Line
The trillion-dollar quest to make green steel
But the main explanation for steel’s giant carbon footprint is that, globally, most steel is still made by heating fossil fuels to turn raw iron ore into finished metal — a process that generates 90 percent of CO2 emissions from steel, along with a toxic soup of heavy metals and air pollution. While recycled steel can displace some of the demand for “primary” steel, it doesn’t diminish the need to clean up or replace coal-fueled furnaces.
Most likely, that shift will include using hydrogen to process iron ore for steelmaking. Only one facility in the world is currently doing this at any meaningful scale: the $180 million Hybrit project in Sweden. However, dozens of projects involving hydrogen are in various stages of development worldwide. Sweden’s H2 Green Steel recently raised $1.6 billion to build the world’s first large-scale, hydrogen-fueled plant, while Chinese steelmaker HBIS Group said it produced its first batch of hydrogen-infused iron.
Undoubtedly, the steel industry’s transformation will require countries to build significantly more renewable energy capacity, both to power electricity-driven furnaces and to produce “green” hydrogen, of which very little is available today worldwide. Down the line, next-generation technologies developed by startups such as Electra and Boston Metal could make it cheaper and easier to produce green steel. All told, decarbonizing iron and steel is expected to require $1.4 trillion of investment by midcentury.
In 2021, three years after construction began, the Hybrit plant successfully produced the world’s first steel reduced by 100 percent fossil-free hydrogen,” which it delivered to Swedish automaker Volvo Group. To date, Pei said the facility has produced about 2,000 metric tons of DRI, also known as “sponge iron.” For comparison, that’s roughly the average amount of steel needed to make over 2,200 cars.
H2 Green Steel collaborates with Volvo Group for supply of near zero emissions steel
As commercial vehicles increasingly run on electrified solutions, reducing the emissions when the product is in use, the environmental footprint from the supply network and production becomes increasingly important. Since steel is one of the main input materials in the manufacturing of trucks, buses and construction machines, a shift towards green steel is a vital element for Volvo Group’s continued journey towards decarbonization. The long-term supply agreement placed from Volvo Group is for green steel from H2 Green Steel’s new plant in Boden in Northern Sweden. Start of production is planned for end of 2025. Deliveries to Volvo Group will start mid-2026.
H2 Green Steel raises €1.5 billion in equity to build the world's first green steel plant
In the largest private placement in Europe this year, H2 Green Steel has raised about €1.5 billion in equity from an investor group led by Altor, GIC, Hy24 and Just Climate. The round will finance the world’s first large-scale green steel plant and Europe’s first giga-scale electrolyzer. The private placement is co-led by new investor Hy24, together with existing investors Altor, GIC and Just Climate. The transaction also includes new investors Andra AP - fonden and Temasek as well as a group of existing investors that continue to support H2 Green Steel with additional equity funding, including AMF, Cristina Stenbeck, Hitachi Energy, IMAS Foundation, Kinnevik, Schaeffler, Vargas and Wallenberg Investments holding company FAM.
The proceeds will finance the construction and development of H2 Green Steel’s flagship large-scale green steel plant in Boden, Sweden. Groundworks have been ongoing on the site in Boden since summer 2022, and through this transaction H2 Green Steel takes another big leap towards start of operations end of 2025.
H2 Green Steel in 1.5 billion Euro agreement with ZF
H2 Green Steel has signed a 7-year binding agreement with ZF, one of the biggest suppliers to the automotive industry globally. Deliveries of near zero emissions steel are set to begin in 2026. ZF directly and indirectly processes around 2.5 million tonnes of steel per year worldwide. This agreement covers a significant share of ZF’s yearly steel volumes, making it strategically important in the company’s efforts to decarbonize its operations.
H2 Green Steel signs agreements with Rio Tinto for direct reduction iron ore pellets and hot briquetted iron
H2 Green Steel is partnering with Rio Tinto, a leading global metals and mining company, for the supply of direct reduction iron ore pellet for its green steel production in Sweden. The two companies have signed a multi-year supply agreement for direct reduction iron ore pellets (DR Pellets) from Rio Tinto’s Iron Ore Company of Canada (IOC) which will account for a significant part of the iron ore supply to H2 Green Steel’s flagship plant in Boden, Sweden. Additionally, the companies have signed an agreement whereby Rio Tinto will purchase and on-sell a part of the surplus low-carbon hot briquetted iron (HBI) produced by H2 Green Steel during the ramp-up of its steelmaking capacity.
H2 Green Steel and Vale in agreement for the supply of direct reduction iron ore pellets
In a multi-year agreement, Vale will supply H2 Green Steel with iron ore pellets as input material for its steel mill in Boden. Vale is a Brazilian mining company and the world’s largest supplier of direct reduction pellets. Iron ore in pelletized form is, along with green hydrogen from H2 Green Steel’s own electrolyzer facility, critical input materials for the green direct reduced iron (DRI) production which will be used to make near-zero emissions steel in the steel plant in Boden. The process of direct reduction of iron ore using green hydrogen and a fully electrified process achieves a CO2 reduction of up to 95 percent compared to the conventional steel making process using coal and coke in a blast furnace.
Cargill and H2 Green Steel sign multi-year offtake contract to supply near zero-emission steel
Cargill (Cargill Metals) has entered into a multi-year agreement with Swedish industrial startup H2 Green Steel for the supply of green steel. The agreement aims to accelerate global ferrous supply chain decarbonization. Cargill Metals connects different parts of the ferrous supply chain, from iron ore mining to steel mills around the world. The company is committed to delivering on its sustainability goals through a variety of initiatives, including partnerships that develop cleaner products with lower CO2-footprint. The agreement with H2 Green Steel is an example of such a partnership where Cargill will help its customers meet sustainability and climate goals with a sustainable and responsible supply of products.
Mercedes-Benz and H2 Green Steel announce agreements in both Europe and North America
Mercedes-Benz and H2 Green Steel have signed a binding agreement for the delivery of about 50.000 tonnes of green steel to the car maker’s European production annually. In a pioneer move Mercedes-Benz has also signed a memorandum of understanding with H2 Green Steel for the potential supply of green steel produced in North America.
In addition to a sustainable production of green steel, Mercedes-Benz has a strong commitment to circularity and the two companies will create a closed-loop recycling of scrap steel to the Boden plant. The partnership also includes H2 Green Steel being able to leverage Mercedes-Benz extensive knowledge and expertise in supply chain human rights.
H2 Green Steel completes €260 million equity financing to build world's first large scale green steel plant
H2 Green Steel announced today that it has secured €260 million in series B equity funding. The final close of the private placement adds €70 million in new investments from investors such as Hitachi Energy, Kobe Steel and Kinnevik. The private placement round that was co-led by AMF, GIC and Schaeffler, alongside existing investor Altor, reaches €260 million in its final close. In addition to already communicated investments by Hitachi Energy and Kobe Steel, the close of the round adds new shareholders Swedish investment company Kinnevik, and a climate-focused institutional investment fund.
The series B equity proceeds will primarily be used to develop the company’s large scale green steel plant in northern Sweden, where H2 Green Steel will produce steel with up to 95 percent lower emissions than traditional steelmaking.