Fossil-Free Steel?

This Swedish steel maker wants to pull the plug on “heavy” metal. 

Few in the construction business can survive without a work vehicle or two. But those cars or trucks or skid steers come at a high environmental cost. Roughly 80 percent of their components are made from steel, metal that is produced via fossil fuel-derived energy sources, primarily gas and coal.

Whereas current steel manufacturing facilities use atmosphere-polluting fossil fuels for power, H2 Green Steel wants a plant that runs fossil free. Credit: Dave Heuts/Flick

Steel crafted in such a manner generates about 7 percent of the world’s greenhouse gas emissions (GhGs)—and the World Steel Association considers that total to be on the low end.

That entire situation is unacceptable, according to Henrik Henriksson, CEO of H2 Green Steel in Stockholm. That’s why, in 2024, his company plans to open an ultra-sized production facility in Northern Sweden that, when fully operational by no later than 2030, will harvest 5 million tons of steel in fossil-free fashion every year. The power source? Green hydrogen.

Green hydrogen can be made using renewably generated electricity—i.e., created from other renewable power sources such as solar or wind—to split water molecules into hydrogen and oxygen. According to Henriksson, H2 Green Steel will use that hydrogen to create the high-temperature heat needed to produce “clean” steel that is just as high quality as the “dirty” or “heavy” type. 

Mercedes-Benz, with its own carbon emissions reduction goals, is among a growing number of companies investing in H2 Green Steel. Credit: Courtesy Mercedes-Benz 

“The climate crisis is the biggest challenge of our time,” Henriksson says. “Given steel’s impact on other industries’ sustainable development, a rapid change of the steel industry is extremely important.”

H2 Green Steel’s site will be a fully integrated, digitalized, and automated “greenfield” (built sustainably from inception to completion) steel plant, the company notes. The goal is for the 800 megawatt facility—to be built from scrap metal—to be net zero by 2030, at which point the site will work with customers in multiple commercial industries. 

The project is already attracting some big players as financial backers. Mercedes-Benz is joining as part of its plan to reach carbon neutral status by 2039. Daniel Ek, founder of music streaming service Spotify, has included H2 as one of the green companies to which he is pledging a total of $1.2 billion of his own funds. Investment firm Vargas Holding, whose clients include Volvo and green battery maker Northvolt, has also signed on. 

Norrbotten, Sweden is a rural locale where officials can create a “greenfield” facility—one that is sustainably constructed from groundbreaking to grand opening. CredIt: Mats Engfors/H2 Green Steel

“With an equity stake in H2 Green Steel, Mercedes-Benz is sending an important signal to accelerate change in the steel industry and increase the availability of carbon-free steel,” says Markus Schäfer, a member of the company’s board of management. “As a preferred partner, we will be using green steel in various vehicle models as early as 2025.” The company currently makes cars that are 50 percent steel, all of which is GhG generating, he adds.

If the production site is as successful as expected, other companies will begin their own projects built around green hydrogen, according to Carl-Erik Lagercrantz, chairperson of H2 Green Steel and Northvolt. He says that’s a great thing, and it’s the type of action that has occurred before.

“We want to accelerate the transformation of the European steel industry,” Lagercrantz says. “Electrification was the first step in reducing carbon dioxide emissions from the transportation industry. The next step is to build vehicles from high-quality fossil-free steel.”

H2 Green Steel is a 2021 Green Builder Media Eco-Leaders award winner. Download the 2021 Eco-Leaders issue to read profiles of other winners of this prestigious award.