Stockholm-based H2 Green Steel raises €1.5B to build world’s first large-scale green steel plant

Stockholm-based green steel producer, H2 Green Steel, announced on Thursday that it has raised €1.5B in the largest private placement in Europe this year. 

The private placement was co-led by new investor Hy24, together with existing investors Altor, GIC, and Just Climate. The round also includes new investors Andra AP – fonden and Temasek, as well as a group of existing investors, including AMF, Cristina Stenbeck, Hitachi Energy, IMAS Foundation, Kinnevik, Schaeffler, Vargas, and Wallenberg Investments holding company FAM.

The Swedish company says it will use the funds to construct and develop the world’s first large-scale green steel plant in Boden, Sweden. 

H2 Green Steel says the upcoming plant will deliver steel with up to 95 percent less CO2 emissions than steel produced with traditional blast furnace technology. 

This is made possible by replacing coal in the production process with hydrogen, produced on-site with Europe’s largest electrolyser, using electricity from renewable sources. 

The announcement comes eleven months after raising €3.5B in debt financing from a leading European financial institution. Since its launch in 2021, H2 Green Steel has raised more than €1.8B in equity in three financing rounds. 

“The calibre of investors that are backing us is impressive. Some of the most professional institutions, investors, and industrial companies globally are part of this round and we are proud that they all share our commitment to sustainability as their true north. €1.5B is the largest private placement in Europe this year and the appetite to invest in us proves both our solid business case and the market demand for green steel,” says Henrik Henriksson, CEO of H2 Green Steel.

H2 Green Steel: Building the world’s first green steel plant

Founded in 2020 by Vargas Holding, who co-founded battery maker Northvolt, H2 Green Steel produces green steel in a fully integrated production process using end-to-end digitalisation, electricity from fossil-free sources, and green hydrogen instead of coal.

After launching in February 2021 and raising Series A funding in May, the company claims to have obtained a permissibility permit for its operations in Boden at a record pace, securing a 14 TWh renewable electricity agreement and starting groundwork and construction.

The company’s customers come from diverse industries, including steel service centres, pipe and tube, passenger vehicles and heavy commercial vehicles, whitegoods, and construction products.

“This marks the start of industrial-scale decarbonisation of basic materials production. The sector will require substantial investments over the coming decades to enable our customers to produce green end products and, thereby meet their climate targets. We hope this financing will contribute towards accelerating the much needed, broad participation of capital markets in the transformation of hard-to-abate industries,” says Otto Gernandt, CFO of H2 Green Steel.

The investor

Hy24 is a joint venture between FiveT Hydrogen, the clean hydrogen-enabling investment partner, and Ardian, a private investment house.

“H2 Green Steel Boden is the most advanced large-scale, green industrial project in the world. It is a trailblazer in decarbonisation of hard-to-abate industrial sectors like steel. The investment by Hy24’s clean hydrogen infrastructure fund will support H2 Green Steel’s ambition to materially reshape steel markets, providing a green alternative to its off-takers and partners. This is part of Hy24’s commitment to help industry get to net zero,” says Pierre-Etienne Franc, CEO of Hy24.