Financial boost to green steel plant in Sweden

By Anders Lorenzen

H2 Green Steel, the Swedish company behind a project to construct the first large-scale green steel plant in the world, has received a significant financial boost.

H2 Green Steel has raised €4.75 billion worth of funding for the flagship plant, which will be located in Boden, a town in northern Sweden. 

The company was founded in 2020. They have signed a debt-financing package worth €4.2 billion, including €300 million from investors, and a grant of €250 million from the European Union’s (EU) Innovation Fund. Taking into consideration other funding received last year, the total now amounts to €6.5 billion.

Green hydrogen and green steel

The state-of-the-art plant will use green hydrogen produced from renewable sources instead of coal to produce the steel. The company says that the process will emit 95% fewer CO2 emissions than the traditional blast furnace technology. The majority of the renewable electricity needed to run the plant has already been secured through long-term power purchase agreements.  

H2 Green Steel has further announced that 2.5 million tonnes of the steel, half of the initial yearly volume, has already been sold through binding five-to-seven- year customer agreements.

The CEO of H2 Green Steel, Henrik Henriksson, said: “No one has scrutinised our project more thoroughly than those who back our financing. This massive commitment from our lenders, investors and the Innovation Fund is true recognition of the quality of our company.”

Backers of the project include influencers players such as Microsoft Climate Innovation Fund and Siemens Financial Service. 

It is expected that the plant will start its operations in 2025.

Steel production is considered one of the most difficult industrial processes to decarbonise.