H2 Green Steel (H2GS), Europe’s leading green steel start-up, is exploring
new projects in the US, Canada, Brazil, and Portugal following the successful
completion of the continent’s largest private placement. The company raised
€1.5bn in equity, with investors including GIC, Temasek, Al Gore’s Just Climate
fund, and the Hy24 hydrogen fund.
The Swedish start-up plans to utilize the funds,
combined with €3.5bn in debt financing from last year, to construct its first
factory in Boden, Sweden. The plant will produce green steel using hydrogen
generated from renewable energy sources. Customers, including Mercedes-Benz,
Cargill, Scania, and ZF, have already committed to purchasing the green steel.
While H2GS remains focused on the Boden plant, it
is also considering opportunities in four additional countries. These projects
would primarily involve the production of green hydrogen and fossil fuel-free
sponge iron. The start-up is looking for partners with a solid local presence
in each country to harness local knowledge.
H2GS plans to begin steel production by the end of
2025 and reach full production capacity of 5 million tonnes the following year.
However, these timelines have been delayed by a year or more due to the impact
of the COVID-19 pandemic.
The green steel production process requires a
significant amount of electricity. At full capacity, the plant is estimated to
consume 13-15 terawatt-hours annually, equivalent to nearly a tenth of Sweden’s
total capacity. Fortunately, northern Sweden has surplus energy, which has
attracted the presence of other industrial companies, such as Hybrit and
Northvolt.
The successful fundraising by H2GS serves as a
model for other companies seeking to decarbonize challenging sectors like steel
and cement. According to Pierre-Etienne Franc, CEO of the Hy24 fund, H2 Green
Steel Boden is at the forefront of decarbonizing hard-to-abate industrial
sectors.