The race to deliver green steel facilities in Europe

Posted on 20 February 2023

A little town in the northern region of Sweden is currently on track to produce the first commercial green steel in Europe. Traditional steel is made with blast finance, using coal and iron ore within the process, emitting significant quantities of carbon dioxide. Steel production is responsible for approximately 7% of global greenhouse gas emissions, but the new site in Sweden will apply hydrogen technology, reducing the emissions by as much as 95%. While the first buildings are yet to appear on the site, the business driving the project, H2 Green Steel, believes it's on track to deliver the first commercial steel by 2025. If this is achieved, it will represent the first large-scale green steel facility in Europe, with the end product being used widely in automotive and shipping construction to buildings and bridges. When Northvolt launched the first large-scale electric battery facility in Sweden, it was exploring ways of producing steel for its batteries in a greener way, and H2 Green Steel emerged as a separate enterprise, funded by the founders of Northvolt.

At the core of the new steel, the facility will stand a tall structure, the DRI tower, where hydrogen will react with the iron ore to generate a type of iron used to make steel. Unlike coking coal, which produces considerable carbon emissions, the by-product of this reaction is just water vapour. The hydrogen used at the green steel plant will be made by H2Green Steel. Water from a nearby river is passed via an electrolyser, splitting the hydrogen from water molecules. The electricity used to produce hydrogen and power in the plant derives from localised fossil-free energy resources, such as wind parks and hydro from the Lule river. 

Ida-Linn Nazelius, the VP of environment and society at H2 Green Steel, explains the uniqueness of the location, the space and the need for green electricity. H2Green Steel has confirmed a deal with Iberdrola to develop a green steel facility powered by solar power in the Iberian peninsula.

While Sweden is a leader in carbon-reducing steel production, it is only the beginning of a very large process. H2 Green Steel hopes to deliver around 5 million tonnes of green steel every year by 2030. According to the World Steel Association, annual production stands at around 2,000 million tonnes worldwide. Other proposed projects in Europe should help increase the volume of green steel produced. This includes GravitHy, a hydrogen-based plant in France and German steel major, ThyssenKrupp, which intends to develop carbon-neutral production at all its facilities by 2045. Europe’s largest steel manufacturer ArcelorMittal is investing in several green steel projects in northern Spain. 

The EU is currently completing a new strategy called the Carbon Border Adjustment Mechanism, which will make it more costly for European businesses to import cheaper, non-green steel from other regions. Furthermore, studies suggest that up to 2030, nearly 70% of steelworks worldwide will require repairing and reinvestment. Blast furnaces can be replaced and improved, but a more stable and long-term strategy would be to invest in converting to carbon-reducing production processes. The next few years will be critical for ensuring businesses and investors worldwide make the right decisions to support green steel production.

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