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Steel is the world’s most commonly used metal. From buildings to bridges, cars to ships, wind turbines to pipelines, steel is found in almost every aspect of life. Driven by population and economic growth, the global steel demand has grown strongly in recent years and is expected to continue. But as governments and industries look to reduce their footprint and reach ambitious net-zero targets, it is clear that cleaning up one of the largest industrial sources of CO2 emission is key to tackling climate change. Steel is in the spotlight.
Underscoring the need to decarbonise the industry, the steel industry accounts for around 8% of all CO2 emissions and 25% of industrial emissions in the EU.
Also read: Vestas introduces low-emission steel offerings for wind turbines
H2 Green Steel is a fully integrated, digitalized, and circular plant located in Boden, northern Sweden, which aims to produce green steel, reducing CO₂ emissions with up to 95 percent compared to traditional steelmaking.
Photo credit: H2 Green Steel
Learn more about H2 Green SteelThe green steel momentum is also eyed by the financial sectors as a row of Danish asset managers, including PKA and Pensam via AIP Management, announced a EUR 300 million investment in the construction of the world’s first large-scale green steel mill. Placed in northern Sweden, the ambition of the integrated plant is to deliver steel with up to 95% less CO2 emissions than conventional steel produced in a traditional blast furnace. This is achieved by replacing coal with green hydrogen in the processes where iron ore is heated and reduced so that it can later be made into steel. The green hydrogen is produced on-site in what will be Europe’s largest electrolysis plant, and the downstream finishing is electrified using electricity from renewable energy sources.
The steel mill, H2GS, is expected to produce up to 2.5 million tonnes of finished flat steel per year, ready to build everything from cars to furniture and white goods. The project, reflecting an increasing appetite from private companies, already has several agreements in place with well-known off-takers, such as Mercedes Benz, Ikea and Electrolux.
The current focus on the decarbonisation of steel reflects the global call made by the Steel Zero initiative. Launched in 2020, the initiative requires its members to make a public commitment to procure 100% net zero steel by 2050 including an interim commitment to procure, specify or stock 50% of their steel requirement by 2030. Among members sending a multi-stakeholder demand signal to shift global markets and policies towards responsible production and sourcing of steel, the shipping giant Maersk and the renewable energy leaders Ørsted and Siemens Gamesa are partnering the push to deliver a global steel transition and move away from coal-powered furnaces.
Launched during COP28, our white paper on “Financing the Green Transition” highlights pathways and partnership models to mobilising investments in the transition to climate-resilient low-carbon economies.
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