New Swedish venture eyes fossil fuel-free steel production in 3 years

STOCKHOLM, Feb 23 (Reuters) - Swedish steel venture H2 Green Steel is planning to build a fossil fuel-free steel plant in the north of Sweden, including a sustainable hydrogen facility, with production starting in 2024, it said on Tuesday.

The Lulea-based venture, which is in the process of closing 50 million euros ($60.7 million) in series A equity financing, said in a statement that by 2030 it plans to have an annual production capacity of 5 million tonnes.

“The project includes a giga-scale green hydrogen plant as an integrated part of the steel production facility,” it said.

The European Union has made hydrogen a key part of its plan to eliminate its greenhouse gas emissions by 2050, and is betting on a rapid scale-up to decarbonise steel, heavy transport and chemicals.

Truck maker Scania said earlier on Tuesday its top chief Henrik Henriksson was stepping down to become H2 Green Steel’s chief executive.

Spotify founder Daniel Ek, main Kinnevik owner Cristina Stenbeck, and Vargas Holding, co-founder of battery maker Northvolt, were among H2GS’ investors, the company said.

Total financing for the project’s first phase is around 2.5 billion euros, which will be raised through a combination of equity and green project financing, it added.

Another green steel venture, HYBRIT - which is owned by Swedish steel maker SSAB, Swedish state-owned utility Vattenfall and Swedish miner LKAB - started test operations last year at a pilot plant for fossil fuel-free steel in Lulea.

H2GS said HYBRIT had been an “important source of inspiration” for the initiative and that it was looking forward to close cooperation with its founders.

SSAB, accounting alone for 10% of Sweden’s and 7% of Finland’s carbon dioxide emissions, aims for its first fossil fuel-free steel to be commercially available by 2026, and to become fossil free in its operations by 2045.

$1 = 0.8232 euros Reporting by Helena Soderpalm; Editing by Anna Ringstrom and Jan Harvey