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January 26, 2024

H2 Green Steel Raises €6.5 Billion for Steel Industry & Combat Carbon Emissions

Sweden's H2 Green Steel, the maverick startup on the steel scene, is gearing up for a game-changing move

In a bold move to reshape the steel industry's environmental footprint, H2 Green Steel, a Stockholm-based startup, is making waves by securing an impressive €6.5 billion in funding. This funding, a combination of €2.2 billion in equity and €4.3 billion in debt, underscores the startup's commitment to revolutionizing steel production and combating the carbon emissions plaguing the global steel industry. Let's delve into the details of this groundbreaking initiative and its potential to usher in a new era of sustainable steel manufacturing.

The global steel industry, notorious for contributing 7-11% of the world's carbon emissions, is facing a transformative moment. H2 Green Steel, founded in 2020, aims to spearhead this change by replacing coking coal with green hydrogen in steel production. With a recent infusion of €4.2 billion in debt financing, €300 million in additional equity, and a €250 million grant from the EU Innovation Fund, the startup is poised to lead the charge towards sustainable steel manufacturing.

H2 Green Steel's funding prowess is a testament to its vision. Backed by a consortium of 20 lenders, including notable names like BNP Paribas, Societe Generale, ING, and the European Investment Bank, the startup has successfully raised €6.5 billion to date. This financial backing, coupled with equity from investors such as Microsoft Climate Innovation Fund, Mubea, and Siemens Financial Services, positions H2 Green Steel as a formidable player in the quest for decarbonizing steel production.

At the heart of H2 Green Steel's ambition is the world's first large-scale green steel plant in Boden, Sweden. Anticipated to commence production in 2027, this innovative facility will utilize green hydrogen and renewable electricity, promising near-zero-emission steel. H2 Green Steel's commitment to a fully integrated process, digitalization, and the elimination of coal aims to revolutionize the industry with steel production boasting up to 95% lower CO2 emissions.

Founded by Swedish financiers Harald Mix and Carl-Erik Lagercrantz, the minds behind major European climate tech giants, H2 Green Steel is on a mission to decarbonize industries. Describing its steel as "near zero carbon," the startup acknowledges the embedded emissions from shipping iron ore but asserts that the process more than compensates by avoiding substantial CO2 emissions in production.

As H2 Green Steel secures an unprecedented €6.5 billion in funding, it marks a pivotal moment in the journey to revolutionize steel production and combat climate change. The financial backing from lenders, investors, and the EU Innovation Fund is a resounding endorsement of the startup's commitment to decarbonization. With the Boden plant on the horizon, set to redefine the steel industry, H2 Green Steel stands at the forefront of a global effort to forge a sustainable and environmentally conscious future.

Neil Hodgson Coyle
Neil Hodgson-Coyle
Editorial chief at TechNews180
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