H2 Green Steel Raises More Than €4 billion In Debt Financing For The World’s First Large-Scale Green Steel Plant
The title of this post, is the same as that of this press release from H2 Green Steel.
This is the sub-heading.
H2 Green Steel signs definitive debt financing agreements for €4.2 billion in project financing and increases the previously announced equity raised by €300 million. Total equity funding to date amounts to €2.1 billion. The company has also been awarded a €250 million grant from the EU Innovation Fund. H2 Green Steel has now secured funding of close to €6.5 billion for the world’s first large-scale green steel plant in Northern Sweden.
These three paragraphs describe the company and outlines the financing.
H2 Green Steel is driving one of the largest climate impact initiatives globally. The company was founded in 2020 with the purpose to decarbonize hard-to-abate industries, starting by producing steel with up to 95% lower CO2 emissions than steel made with coke-fired blast furnaces. The construction of the flagship green steel plant in Boden, with integrated green hydrogen and green iron production, is well under way. The supply contracts for the hydrogen-, iron- and steel equipment are in place. A large portion of the electricity needed has been secured in long-term power purchase agreements, and half of the initial yearly volumes of 2.5 million tonnes of near zero steel have been sold in binding five- to seven-year customer agreements.
Today H2 Green Steel announces a massive milestone on its journey to accelerate the decarbonization of the steel industry, which is still one of the world’s dirtiest. The company has signed debt financing of €4.2 billion, added equity of close to €300 million and been awarded a €250 million grant from the Innovation Fund. Funding amounts to €6.5 billion in total.
H2 Green Steel has signed definitive financing documentation for €3.5 billion in senior debt and an up-to-€600 million junior debt facility:
Note.
- I first wrote about H2 Green Steel about three years ago in Green Hydrogen To Power First Zero Carbon Steel Plant.
- The Wikipedia entry for Boden in Northern Sweden, indicates it’s a coldish place to live.
- In that original post, H2 Green Steel said they needed €2.5 billion of investment, but now they’ve raised €4 billion, which is a 60 % increase in financing costs in just three years.
Is this Sweden’s HS2?
The Future Of Green Steelmaking
The finances of H2 Green Steel look distinctly marginal.
I have a feeling that green steel, as the technology now stands is an impossible dream.
But I do believe that perhaps in five or ten years, that an affordable zero carbon method of steel production will be developed.
You have to remember, Pilkington developed float glass in the 1950s and completely changed an industry. Today, we’d call that a classic example of disruptive innovation.
The same opportunity exists in steelmaking. And the rewards would be counted in billions.
The Anonymous Widower 
A pilot plant was opened last week to prove the practicality of producing steel using a revolutionary method while not employing the heavily promoted use of hydrogen.
In traditional iron making, carbon monoxide produced by burning the coal or coke is combined with oxygen in the iron oxides, in order to reduce the oxides to metallic iron and release carbon dioxide. In fact, modern steel production accounts for about 10% of global CO2 emissions.
Bill Gates and Amazon’s Geoff Bazos are funding this alternative means of making high grade iron that can either be combined with small amounts of carbon and other elements to make a variety of steels, or the base iron can be fed into Electric Arc Furnaces along with scrap steel to make environmentally friendly products and thereby overcome the issue of carbon dioxide emissions.
The technique is one in which even poor grade iron oxide ores may be dissolved in a solvent to form a solution that can be converted by means of an aqueous media of water, oxygen, and other chemical compounds. This technique may or may not be pressurised. The result is the removal of oxygen (i.e., reducing the oxides), allowing the recovery of metallic iron. Electrasteel Inc, in Bolder, Colarado are the patent holders who claim the iron will be in a form that can be processed into useful goods in subsequent processes. Electrasteel’s proposition is that while for thousands of years, both reduction and carbon addition have been achieved predominantly by heating iron ore to very high temperatures (e.g., about 1,700° C.) i the presence of carbon, typically produced by burning coal (or coke) their patented process requires temperatures of only 60⁰ C for an electro-chemical reduction process, relying on electricity generated by renewable energy.
Comment by fammorris | March 30, 2024 |
This looks a good idea.
Wikipedia also says we’ve got reserves of iron ore, but we import higher quality ores. Could it ne, that what we have left in the ground, is good enough for this process?
We’ve certainly got enough renewable electricity.
I definitely, think it could be a workable idea for the UK.
Comment by AnonW | March 30, 2024 |