H2 Green Steel

H2 Green Steel is a Stockholm-based company founded in 2020 with an industrial ambition that is extraordinary in its scale and complexity: to build a full-scale green steel plant in Boden, northern Sweden, that produces steel using green hydrogen instead of coking coal, eliminating roughly 95 percent of the carbon emissions associated with conventional steelmaking in the process. Steelmaking is one of the hardest industrial sectors to decarbonize. The industry accounts for approximately 7 to 8 percent of global CO2 emissions, and the chemistry of the dominant blast furnace process — which requires coking coal both as a fuel and as a chemical reducing agent — makes it fundamentally incompatible with low-carbon substitutes without rebuilding the production process from scratch. Green hydrogen produced by electrolyzing water using renewable electricity can serve as both the energy source and the reducing agent in an alternative process known as direct reduced iron, but making this economically viable requires cheap renewable power, industrial-scale electrolyzers, and the capital to construct an entirely new plant. Northern Sweden offers the renewable energy conditions; falling electrolyzer costs are improving the economics progressively; and H2 Green Steel has secured the commercial agreements and financing needed to begin construction at Boden. In January 2024, the company announced a financing package of €4.75 billion — one of the largest green project finance transactions in European industrial history — comprising €4.2 billion in debt, €300 million in equity, and a €250 million EU grant. Total project capitalization across the company's history has reached €6.5 billion, with investors including Microsoft's Climate Innovation Fund and Siemens Financial Services among the prominent backers. Critically, H2 Green Steel has secured off-take agreements with major European automotive manufacturers and consumer goods companies before the plant is operational — a commercial foundation that validates the market assumption at the heart of the project. European industrial companies are facing growing pressure from regulators, investors, and their own corporate climate commitments to reduce the embodied carbon of their supply chains, and steel is among the most significant sources of that embedded carbon. Green steel, at sufficient scale, addresses that need directly. If Boden performs as planned, producing up to 5 million tonnes of green steel annually at full capacity, H2 Green Steel would not just be a successful industrial project — it would provide a replicable proof of concept for decarbonizing a sector that global climate targets require to transform dramatically over the coming decades.