(Düsseldorf) – The Swedish company H2 Green Steel AB has awarded the contract for the construction of a plant for the direct reduction of iron ore to the Luxembourg-based Paul Wurth SA and its US consortium partner Midrex Technologies, Inc. 
In the process called “DRI”, the CO2-intensive coke is replaced by hydrogen to produce iron - which is ideally generated using electricity from renewable energies. In this case, steel manufacturers proclaim that they produce green steel. During the process, the ore is reduced to sponge iron in pellet form, which is then further processed.
Production at the selected Boden location in northern Sweden is scheduled to start in 2025, followed by a ramp-up phase in 2026. According to the company, the capacity is 2,5 million tons of green steel annually. “In our steelworks we will reduce CO2 emissions by up to 95 percent compared to conventional steel production,” says Maria Persson Gulda, Chief Technology Officer at H2 Green Steel.
DRI procedures on the rise
Paul Wurth, part of the Düsseldorf-based machine and plant manufacturer SMS Group GmbH, and Kobe Steel subsidiary Midrex, which claims to be the “technology leader in DRI system construction”, claim to have the “world’s first commercial hydrogen-powered DRI system” in Sweden " to install.
However, as has been reported several times, there are currently a number of such projects in various stages of implementation, including at the companies Salzgitter AG, Thyssenkrupp and ArcelorMittal.
1,5 million tons of steel have already been sold
The Swedes are currently announcing progress almost every week. In May, H2 Green Steel said it had already concluded steel purchase agreements with terms of five to seven years for more than 1,5 million tons per year. The customers include, among others, the automotive industry suppliers Adient (Ireland), Mubea (Germany), Schaeffler (Germany) and Bilstein (Germany), the steel and metal traders BE Group (Sweden) and Klöckner (Germany), and the car manufacturer BMW , Mercedes-Benz and Scania, as well as household appliance manufacturers Electrolux and Miele, to name just a few.
In June, H2 Green Steel and Statkraft announced their collaboration. Accordingly, from 2026 onwards, the Norwegian energy company will supply around two terawatt hours of electricity from Swedish hydroelectric power plants to Boden in order to operate electrolysers with an output of 800 megawatts to produce hydrogen. In total, contracts have been concluded for the delivery of 14 terawatt hours, the company said.
Construction work on the new steelworks began in July with clearing of the 270-hectare site after authorities approved the project.
At the end of August, H2 Green Steel raised around 190 million euros for the project as part of a financing round. The new investors include AMF, GIC, Schaeffler, Swedbank Robur and Alternative Equity. The previous shareholders Vargas, Kingspan, FAM, Marcegaglia, IMAS Foundation, Cristina Stenbeck, Daniel Ek and the Altor Fund V also took part again. Kobe Steel Ltd. is also involved in the project. A first round of financing in May raised $105 million (€108 million).
Further hydrogen projects with Hydro Harland
Last week, H2 Green Steel and Hydro Harland, a subsidiary of the Norwegian aluminum group Hydro ASA, confirmed their cooperation. The companies want to find out which other hydrogen projects can be implemented in Scandinavia and South America.
Accordingly, in Brazil, for example, the possibilities for producing green hydrogen are being examined in order to build a DRI steelworks there. Its capacity is given as five million tons.
“The potential for a large-scale hydrogen production plant” is being investigated in northern Europe. In addition, “joint efforts should be made to ensure security of supply and the safe operation of hydrogen production, storage and use.” If feasible, the projects with Hydra should be carried out “from the second half of the decade”.
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Rendering of the planned green steel plant in Swedish soil. © H2 Green Steel AB
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The preparatory construction work in Boden began in July with clearing work on the 240 hectare site of the future steelworks. © H2 Green Steel AB
