H2 Green Steel to Build Fossil Free Steel Plant in Northern Sweden
H2 Green Steel will be a large-scale steel producer based on a fossil-free manufacturing process targeting large European OEMs. H2GS will be located in
H2 Green Steel will be a large-scale steel producer based on a fossil-free manufacturing process targeting large European OEMs. H2GS will be located in the Boden-Lulea region in northern Sweden that offers unique conditions for fossil-free steel production. The project includes a giga-scale green hydrogen plant as an integrated part of the steel production facility. H2GS will build a large-scale, Greenfield steel manufacturing facility in the Norrbotten region in northern Sweden to enable production of fossil-free steel at a leading cost position. Production will begin in 2024 and by 2030 H2GS will have annual production capacity of 5 million tonnes of high quality steel. Mr Henrik Henriksson, currently CEO of Scania, will lead the company. This initiative has been developed in close collaboration between Vargas, and several strategic and financial investors that are global leaders in sustainability and digitalisation. H2GS is in the process of closing its series A equity financing of EUR 50 million from a select group of investors, including Vargas, Scania, SMS group, BILSTEIN GROUP, EIT InnoEnergy, Cristina Stenbeck, Daniel Ek, Altor Fund V, and IMAS Foundation. The founder and largest shareholder is Vargas, which is also co-founder and one of the largest shareholders in Northvolt. The total finances for the first phase of the project amounts to approximately EUR 2.5 billion, which will be raised through a combination of equity and green project financing. Morgan Stanley, Societe Generale and KfW IPEX-Bank, are acting as financial advisors to H2GS. Sweco is advising in the engineering and permit process.
H2GS and Northvolt Chairman Mr Carl-Erik Lagercrantz said “We want to accelerate the transformation of the European steel industry. Electrification was the first step in reducing carbon dioxide emissions from the transportation industry. The next step is to build vehicles from high-quality fossil free steel. A Scania truck weighs about six tons and five of those are steel, which today unfortunately is produced with a substantial carbon footprint.”
An important source of inspiration for the initiative is the groundbreaking HYBRIT project and its founders SSAB, LKAB, and Vattenfall. 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 Northvolt. The business model is based on a close partnership with strategic customers, including a deep collaboration on product development, process technology, recycling strategies and logistics.
H2 Green Steel was founded in 2020. H2GS is forming a strong management team with complementary backgrounds and global experience from the steel industry, key customer segments, R&D, digitalisation, financing, and public affairs.
The global steel industry is one of the world’s largest emitters of carbon dioxide, representing approximately seven percent of global CO2 emissions. Demand for fossil-free steel is growing substantially with strong interest from global market leaders in sectors such as automotive, commercial vehicles, white goods, furniture, etc. The steel industry is struggling to accelerate the transition to fossil-free steel manufacturing at scale.