2023-09-07 18:53:29
This is a double event for the European steel industry and a big step in the decarbonization of the industry. Ovako, the Swedish ball bearing manufacturer, inaugurated on Thursday September 7, in Hofors, a green hydrogen production unit for heating steel before rolling.
This stage in production requires a lot of energy, previously obtained with gas. The 20 MW electrolyser will produce 3,880 cubic meters of hydrogen per hour, as well as oxygen. “ Sweden is now the nerve center of the fossil fuel-free steel revolution,” welcomed Swedish Prime Minister Ulf Kristersson during his inauguration speech..
The largest private fundraising in Europe this year
At the same time, the Swedish company H2 Green Steel announced that it had raised the necessary financing for the construction of a green steel production plant in Boden, in the north of the country, as well as the largest electrolyser in Europe.
He completed a funding round of 1.5 billion euros, before, in particular, the competition of Hy24, a fund set up by the French Pierre-Étienne Franc, a former Air Liquide. It is “the largest private fundraising in Europe this year”, argues H2 Green Steel, in its press release, proof of the appetite for investments for the energy transition. Among these, there are also the Singaporean funds Temasek and GIC, as well as the British Just Climate.
The young company had already raised 1.8 billion euros in equity, provided by major industrial families (notably the Agnelli and Wallenberg) and received 3.5 billion euros in bank loans. While the first sod was given in 2022, the plant could be operational at the end of 2025, with a production of 2.6 million tonnes of green steel produced per year.
The squirms “the first steel factory built in Europe in decades”, says Pierre-Étienne Franc. According to him, the choice of Sweden is explained by “the low price of electricity”among the lowest in Europe thanks to dams that have been amortized for a long time, but also by “the proximity of iron ore and a port”.
Customers are already interested
Green hydrogen should make it possible to reduce CO2 emissions from steel by up to 95% compared to that produced by traditional steel blast furnaces using coal to deoxidize iron ore. And thus, if it is generalized, to green steel manufacturing which is responsible for 7% of CO2 emissions. Western Europe alone consumes around 100 million tonnes of steel per year.
The additional cost of steel produced by HE Green Steel would be approximately 30% higher than steel currently produced. But the company already has customers, including the German Mercedes, BMW, as well as the Swedish Scania and Electrolux, who have all made commitments to place orders with it. It also has suppliers, such as the Australian mining group Rio Tinto which will supply it with iron ore.
Other projects in Europe
Other projects of this type are flourishing in Europe, even if H2 Green Steel is now the most advanced. This is the case in France, at the port of Fos-sur-Mer in the South, with
GravitHy, set up by a consortium made up of the European incubator EIT InnoEnergy, Engie and several manufacturers.
With a size of 700 MW, it aims to produce 2 million tonnes of direct reduced iron (DRI) per year, by replacing the gas with hydrogen to extract the oxygen atoms from the ore. In the GravitHY project, this would avoid up to 4 million tonnes of CO2. The consortium is now seeking to raise 2.2 billion euros. It must also secure the purchase price of electricity over several years, the only solution to be competitive. The Fos-sur-Mer plant would therefore need at least 1 GW of electrical capacity, or a nuclear reactor.
Traditional steel players also have their own decarbonization plans, such as ArcelorMittal in Dunkirk.
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