Sweden’s H2 Green Steel raises $1.6bn for Boden plant

The plant in the northern town of Boden will use hydrogen produced from renewable electricity – rather than coal – to deliver steel in a process emitting as much as 95% less CO2 than steel produced with traditional blast furnace technology, the company says.

The funding round was co-led by new investor Hy24 alongside existing investors Altor, GIC and Just Climate, the company said, and also included new investors Andra AP Fonden and Temasek.

The transaction was a “big leap” towards the start of steelmaking operations in Boden by the end of 2025, the company said.

H2 Green Steel aims to ramp up production to 5 million metric tons of steel during 2026 and already has contracts for about half of its planned production despite green steel being more expensive than that produced by carbon-intensive methods.

“The willingness to pay more for green steel has increased quarter by quarter,” said chief executive Henrik Henriksson.

“The first contracts we signed were maybe at a 20% premium; the most recent are more like a 30% premium.”

Henriksson said that traditional steel production emits about 2 tonnes of CO2 per ton of steel compared with H2 Green Steel’s predicted 200 kilograms of CO2 per ton.

Last month H2 Green Steel announced that it had signed multi-year deals with miners Rio Tinto and Vale for the supply of iron ore pellets from Canada and Brazil.

Over the longer term the company aims to reduce the roughly 40kg of CO2 per ton of steel from transport of ore by sourcing in Sweden and utilizing cleaner transport methods, Henriksson said.

Morgan Stanley acted as sole financial adviser to H2 Green Steel in the private placement.