The first commercial green steel to be produced in Europe will likely come from a small military community in northern, icy Sweden.
900 kilometers (559 miles) north of Stockholm, at the site of a new steel plant just outside of Boden, massive excavators and diggers are slicing through layers of mud, ice, and snow.
The sun has just begun to rise at 9:00 and it is -8°C outside. Some of the employees have turned on the heated seats in their cars while wearing three or four jackets.
In blast furnaces, steel is typically produced. They produce large amounts of carbon dioxide and contribute to global warming when fed iron ore and coking coal.
Around 7% of the world's greenhouse gas emissions are caused by the production of steel. However, the new plant in Boden will use hydrogen technology, which is intended to reduce emissions by as much as 95%.
The company behind the project, H2 Green Steel, believes it is on track to roll out the first commercial batches of its steel by 2025, despite the fact that the project's remote location has not yet seen the construction of the first buildings.
If it is successful, it will be the first sizable green steel plant in Europe. Its products will be used in the same way as conventional steel produced in blast furnaces to build everything from buildings and bridges to cars and cargo ships.
H2 Green Steel is a start-up that didn't even exist prior to the pandemic, despite the fact that a large portion of Europe's steelmaking industry dates back centuries.
H2 Green Steel was created as a spin-off with funding from two of Northvolt's founders when the company wanted to find a greener way to produce the steel needed to make the batteries when it opened Sweden's first massive electric battery factory two hours south of Boden.
The DRI tower, which stands for direct reduction of iron, will serve as the focal point of the new steel mill. Within this, hydrogen and iron ore will react to produce an iron type that can be used to make steel. Water vapour is the byproduct of the reaction in the DRI tower, as opposed to coking coal, which emits carbon.
H2Green Steel will produce all of the hydrogen used at the new green steel facility.
An electrolyser is used to separate the hydrogen from water molecules as it processes water from a nearby river.
Local fossil-free energy sources, such as hydropower from the nearby Lule river and wind parks in the area, are used to power the plant and produce the hydrogen.
"To start, this is an unusual location. Ida-Linn Näzelius, vice president of environment and society at H2 Green Steel, says that in addition to having the space, you also need to have green electricity.
H2Green Steel says it is looking into other opportunities in Brazil and has already agreed to a deal with Spanish energy giant Iberdrola to construct a solar-powered green steel plant in the Iberian peninsula.
Another Swedish steel company, Hybrit, plans to open a comparable fossil-free steel plant in northern Sweden by 2026, posing friendly competition for it at home. With support from the Swedish Energy Agency and the EU's Innovation Fund, this company is a joint venture between the Nordic steel company SSAB, the mining company LKAB, and the energy company Vattenfall.
While Sweden is leading the way in Europe for carbon-reducing steel production, Katinka Lundberg, a senior policy advisor at the Brussels-based climate think tank E3G, says it's important to consider its potential effects in the larger scheme of things.
By 2030, H2 Green Steel wants to have produced five million tonnes of green steel. According to data from the World Steel Association, annual global production is currently in the neighborhood of 2,000 million tonnes.
The production capacity in Sweden, according to Ms. Lundberg, "will be a drop in the ocean.".
However, other endeavors should contribute to boosting the amount of green steel that is accessible in Europe.
One of them is GravitHy, which has a hydrogen-based plant in France that it wants to open in 2027. Thyssenkrupp, a major producer of steel in Germany, recently declared its intention to switch all of its plants over to carbon-neutral production by 2045. The Spanish government and ArcelorMittal, the largest steel producer in Europe, are both funding green steel projects in northern Spain.
The Carbon Border Adjustment Mechanism, a new EU strategy intended to make it more expensive for European companies to import less expensive, non-green steel from other parts of the world, is currently being finalized.
According to Ms. Lundberg, "I think it is important in that it will inspire industry to invest because they can see that, at least in the European context, their steel will be competitive.
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Additionally, she notes that the years between now and 2030 represent "a crucial window of action," with roughly 70% of steelworks worldwide in need of maintenance and investment during this time.
While it is possible to replace or reline blast furnaces to extend their lifespan, Ms. Lundberg contends that investing in the transition to carbon-reducing production processes would be a better long-term strategy.
"The next eight years will be crucial in ensuring that businesses and investors around the world decide to invest in green steel production. which will "lock us in" for a few more decades. ".
It is difficult to predict, however, whether the vast majority of major steel producers will take this course, according to Lundberg. "I would say that I am hopeful, but we must continue to apply pressure. ".
The UK government is reportedly prepared to contribute £600 million to assist the country's two largest steel producers in moving away from coal-fired blast furnaces. According to Chris McDonald, CEO of the UK's national innovation center for steel and metals, the Materials Processing Institute, the nation is still "very much a laggard" in the green steel industry.
"One major factor in this is the UK's high energy prices right now in comparison to other nations, which makes the steel industry unsustainable and reduces investment interest in the UK. ".
Another issue, according to Mr. McDonald, is determining how to mitigate high unemployment in industrial heartlands in the event that existing steel plants close or require employees to have different skill sets after being remodeled. We're trying to manage a green transition and to manage the social consequences at the same time, he claims, so it's more complicated than just opening up the market and allowing new entrants to come in.
In Boden, where there has been a long-standing need for new industries, the establishment of H2 Green Steel is seen as a significant opportunity for job creation.
Following army budget cuts and the closure of a major hospital in the area in the 1990s, the small military town shrank and thousands of people relocated elsewhere in search of employment.
Claes Nordmark, the town's social democrat mayor, claims that this is the town's greatest opportunity in more than a century. "This will mean jobs, more restaurants, more sponsorship for our handball, ice hockey, and football teams, among other things. It means everything to us.
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