H2 Green Steel Says 1.5Mt Already Committed in Offtake Agreements

“When we launched H2 Green Steel about a year ago … we kicked the transformation of the steel industry into a new gear, and other players in the industry have moved up their timelines,” company CEO Henrik Henriksson said.

Among those keen to secure “net-zero,” hydrogen-based steel include BMW Group, Electrolux, Klöckner & Co., Mercedes-Benz, and Zekelman Industries, the company said.

“We are leading the way, showing that it is possible to transform the carbon-intense steel industry quickly, and others are speeding up and stepping up,” Henriksson added.

H2GS said that the technology for making green steel is available and that customers are willing to pay a premium for it. “When a reasonable polluters-pay principle is in place, and put in product-cost calculations, the business case for green steel will be even stronger,” the company said.

“Presently, the term ‘green steel’ can mean different things. … Recycling scrap is part of the equation, but it will not be enough to meet the global demand for steel. We need to make sure that all the new steel is truly sustainably produced,” Henriksson said.

Most of the customers pioneering the green transition with H2GS have signed up for targets covering not only scope 1 and 2 but also scope 3 emissions, H2GS said.

Scope 1 refers to emissions generated directly by a producer’s operations. Scope 2 refers to emissions related to the energy that powers that company. And Scope 3 includes other emissions associated with a mill’s manufacturing process – including transportation and logistics

Henriksson was also a featured speaker at CRU’s 2nd Steel Decarbonisation Strategies Conference in late April, where he discussed the potential for a consumer-driven, hydrogen-based economy to reduce carbon emissions.

“Selling 60% of … future production at a significant premium over market prices is truly a testament to industry demand for green steel,” Henriksson said during the conference.

When asked during the Decarbonisation Strategies conference why H2GS had not pre-sold more volume, Henriksson said that it would not be prudent to undershoot the premium green steel will fetch. He added that the strong demand for low-carbon steel, especially for H2GS’s green steel, is a clear sign the sector recognizes the start-up as a frontrunner.

CRU Group principal analyst Josh Spoores said it was a remarkable feat for a steelmaking start-up to be pre-sold to this degree at such an early stage.

“I have high hopes and am very bullish on the proliferation of low-emissions steel,” Spoores said. Time will tell to what degree H2GS will succeed, he added.

Founded in 2020, Stockholm-based H2GS wants to accelerate the decarbonization of the steel industry with green hydrogen. Its first green steel plant is under development in Boden, in northern Sweden, and is expected to bring steel to market in 2025.

By David Schollaert, David@SteelMarketUpdate.com