Green steel firm H2 Green Steel (H2GS) has raised a further €70mn ($68mn) in new equity investments, bringing its total to €260mn for the latest round of funding. In addition to investments already secured by technology firm Hitachi Energy and steelmaker Kobe Steel, new shareholders include Swedish investment company Kinnevik and an undisclosed institutional investment fund.

“This private placement round is a true sign of strength for our business—sustainability and profitability go hand in hand,” says Henrik Henriksson, CEO of H2GS.

The new finance will be used primarily to develop the company’s large-scale green steel plant in northern Sweden, which will use direct reduced iron-electric arc furnace (DRI-EAF) technology.

Groundworks for the project began earlier this year. It will include the construction of a gigascale electrolyser, powered by renewables, producing the green hydrogen needed to bring 5mn t/yr of green steel to the market by 2030. Production will begin in 2025 at 2.5mn t/yr.

“This private placement round is a true sign of strength for our business” Henriksson, H2 Green Steel

H2GS has signed offtake contracts—including one with vehicle manufacturer BMW—for more than 1.5mn t/yr of the planned initial production volume of 2.5mn t/yr.

The project will see most processes in the production flow electrified and has an eventual goal to produce net-zero emissions.

The plant will also recycle scrap metal from customers in its electric arc furnace, send waste heat into the district heating channels of the Lulea-Boden area and process the slag it produces into products for other industries. It will be sited in the county of Norrbotten, a location that combines access to quality iron ore with good renewables potential.

The total financing for the first phase of the project amounts to approximately €2.5bn, raised through a combination of equity and green project financing.

Gaining inspiration

The project has been informed by findings from the Hybrit development, operated by steelmakers SSAB and LKAB, and utility Vattenfall. The consortium commissioned the world’s first pilot plant to produce green steel at SSAB’s Lulea plant in 2020.

“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,” the firm says.

The steel sector is Sweden’s single-largest emitter of CO₂, at more than 13pc. At a European level, the steel industry accounts for 6pc of CO₂ emissions.

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Author: Tom Young