Made with green hydrogen | H2 Green Steel signs multi-year supply deal with US conglomerate Cargill
Start-up has already pre-sold 60% of the green steel it expects to produce from its planned factory in northern Sweden, which it plans to take FID on this year
Swedish start-up H2 Green Steel has signed a multi-year offtake agreement with American conglomerate Cargill, adding to a growing list of customers as it gears up to take a final investment decision (FID) on its flagship plant in northern Sweden this year.
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The company plans to use green hydrogen and renewables-powered electric arc furnaces to replace coking coal in the process of melting and removing oxygen when extracting iron from iron-oxide ore.
Cargill’s own customers are “signaling significant interest” in low-carbon steel, according to managing director of the firm’s metals business, Lee Kirk.
The conglomerate links up the steel supply chain by moving around 50 million tonnes of iron ore and six million tonnes of steel between mines, mills and end users, and its metals subsidiary currently provides “physical and financial solutions” to over 2,500 customers in 40 countries.
The start-up aims to produce two-and-a-half million tonnes of steel a year in Boden by the end of 2025, ramping up to five million tonnes by 2030.
It plans to take an FID this year, once the company has finished its ongoing €1.5bn ($1.64bn) equity process, and last month ordered 700MW of electrolysis capacity from German manufacturer Thyssenkrupp.
Cargill has also pledged to reduce its supply chain emissions by 30% by 2030, although most of its efforts are focused on decarbonising its food and agriculture businesses.
“It is the commitment to a responsible and sustainable connected ferrous metals supply chain that drew us to this partnership with Cargill,” says H2 Green Steel’s chief commercial officer Mark Bula.
“The additional possibilities for working together for both upstream and downstream emission reductions that enhance this distribution relationship. Cargill’s global reach will help H2 Green Steel’s products be available to other markets as demand grows beyond the EU.”
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