A Revolution in the Making: Steel Without the Carbon Footprint
Steel is everywhere, essential to everything from cars to skyscrapers. However, this powerhouse material comes at a high environmental cost.
The traditional steel production process is responsible for nearly 7% of global CO₂ emissions, driven by coal-based fuels and intensive energy requirements. With rising demands from industries like automotive to decarbonise their supply chains, the push for “green steel” has taken centre stage.
This post explores how H2 Green Steel, led by CTO Maria Persson Gulda, is tackling this challenge using green hydrogen to create steel with a dramatically reduced carbon footprint.
Related:How to design your Sustainability Strategy – The three types of initiatives you should have
The Steel Industry’s Carbon Challenge
Steel’s traditional production methods rely heavily on coal-derived coke as a fuel source, which is not only carbon-intensive but also hard to replace without altering the entire production chain. For every tonne of steel produced, approximately two tonnes of CO₂ are emitted, with 85% of those emissions stemming from the blast furnace in the first stage of production. With global climate targets looming, industries are searching for viable alternatives to meet the need for both cost-effective and low-carbon steel.
In response, H2 Green Steel is pioneering a method that could change steelmaking at its core. By substituting coal with green hydrogen—produced using renewable electricity—they aim to reduce steel’s emissions by up to 95%, while maintaining the strength and versatility of this vital material.
How Green Steel is Made: A Comparison
Traditional steel production has two main steps: ironmaking and steelmaking.
Ironmaking
In conventional steel production, ironmaking involves using a blast furnace to process iron ore into pig iron. This process relies on coke as a fuel source, which generates large amounts of CO₂ emissions. An alternative is the Direct Reduction Iron (DRI) process, which uses natural gas reformed into hydrogen and carbon monoxide to reduce the iron ore.
However, while this method reduces emissions somewhat, it still produces CO₂ as a by-product.
H2 Green Steel has reimagined this step. Instead of relying on natural gas, they use green hydrogen to reduce the iron ore.
This green hydrogen is produced via a 700-megawatt electrolyser, which splits water into hydrogen and oxygen using renewable energy.
To make the hydrogen reduction even more efficient, H2 Green Steel heats it to 2,000 degrees Celsius, which speeds up the process, making it ten times faster than conventional methods and emitting only water vapour as a by-product.
Steelmaking
In the steelmaking stage, pig iron or DRI is converted into steel. Traditional processes allow only about 20% scrap steel to be mixed in due to furnace limitations.
However, with H2 Green Steel’s DRI method and electric arc furnace, up to 100% scrap steel can be used, allowing maximum recycling and further reducing the carbon footprint.
Related: How to use the Blue Ocean Strategy to scale Sustainability Solutions
Building a Green Steel Plant in Sweden
Setting up the world’s first green hydrogen steel plant is no small feat. In 2020, Maria Persson Gulda joined H2 Green Steel with a bold goal: to build this facility in northern Sweden by 2025.
Using renewable energy sources from Sweden’s abundant hydropower and wind, the company leverages local infrastructure and surplus energy in the region to power its hydrogen electrolysers sustainably.
While the company aims to create and ship green steel, H2 Green Steel has explored a globally adaptable approach: producing green iron in regions rich in renewable resources, and then shipping the semi-finished material to traditional steel-producing regions.
This approach not only decentralises steel production but also optimises resource use across regions with abundant renewable energy.
Image Source – H2 Green Steel
Rising Demand and Market Disruption
The automotive industry, which pioneered the push for green steel, is the primary customer for H2 Green Steel.
Companies like Northvolt have already signed “take-or-pay” contracts—pre-purchase agreements that de-risk H2 Green Steel’s investments.
These contracts allow automakers to lock in supplies of green steel for the future, as they seek to reduce their Scope 3 emissions (indirect emissions from the supply chain).
Over 40% of H2 Green Steel’s capacity has been pre-sold, illustrating the surging demand for low-carbon materials.
The European Union’s carbon pricing schemes, such as the Carbon Border Adjustment Mechanism (CBAM), further encourage industries to adopt green steel by making it more economically feasible. This policy puts a price on CO₂ emissions for both domestically produced and imported goods, levelling the playing field and boosting demand for lower-emission products.
The Road Ahead for Green Steel
Despite substantial investment, green steel production still faces challenges, including high upfront costs and technological scaling. H2 Green Steel’s $6.5 billion plant in Sweden is one of the most ambitious projects in the steel industry. However, with supportive policies, committed customers, and a rising carbon price in Europe, the path forward looks promising.
To fully decarbonise the steel industry, H2 Green Steel and other pioneers may need to split production, creating green iron in renewable-rich areas and completing steel production closer to demand centres. This approach allows for efficient resource allocation and could enable green steel to become the dominant form of steel globally.
Final Thoughts: Building a Sustainable Future with Green Innovation
H2 Green Steel’s journey highlights how innovative approaches can transform entire industries, showing what’s possible when ambitious goals meet advanced technology.
As carbon pricing policies and sustainable procurement increase pressure on industries to decarbonise, green steel stands out as a model of how to build a low-carbon future.
If your organisation is interested in pioneering sustainable solutions, schedule a consultation with us. Our team of experts can guide you from concept to implementation, helping you turn sustainable ambitions into real-world impact. Let’s reimagine tomorrow’s industries—together.
Others who liked this post also liked these…
