Swedish steel firm Ovako has today inaugurated a 20MW electrolysis system, the largest to start operations in the country yet, at its mill in the municipality of Hofors, 220km northwest of Stockholm.

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Renewable hydrogen for steel is gaining traction in Sweden.

The Hybrit consortium — made up of Swedish companies Vattenfall, LKAB and SSAB — produced the world’s first fossil-free steel using H2 in 2021, while H2 Green Steel is set to take a final investment decision on a 2.5-million-tonnes-a-year green steel mill with 700MW of electrolysers in Boden this year.

But unlike other initiatives, Ovako plans to burn its green hydrogen for industrial heat, rather than use it to extract iron from ore in a process known as direct iron reduction.

This is likely because the Swedish firm focuses primarily on recycling scrap steel, which accounts for 97% of its production.

The firm also already uses electric arc furnaces run on zero-carbon electricity, which it notes in its 2022 sustainability report have allowed it to reduce scope 1 and 2 emissions by 58% compared to 2015 levels — with the remaining CO2 offset in order to claim “carbon-neutral” steel since January of that year.

However, the heat needed for rolling the steel into a finished product downstream is still generated by firing fossil gas. Ovako anticipates that switching to green hydrogen to fire these processes would reduce its core emissions by a further 50% or more.

Additionally, the firm plans to supply additional volumes of H2 produced by the electrolyser in Hofors to Volvo for use in fuel-cell trucks.

Overall, the project cost SKr180m ($16m), of which SKr71m was supported by the Swedish Energy Agency.

Ovako has confirmed to Hydrogen Insight that it already sells its steel at a premium.

The firm also plans to extend hydrogen production and use to all units where steel is rolled by 2030, “provided there is good access to fossil-free electricity to power the electrolysis process”.

However, recycling scrap steel with electric arc furnaces without the use of hydrogen direct-reduced iron has been criticised in the UK as having variable quality compared to virgin steel and limiting what grades can be made — although Ovako itself offers 500 grades in its current process.