Green steel initiative given €143m EU funding

The HYBRIT-initiative driven by SSAB, LKAB and Vattenfall has now officially received support from the European Union, as one of seven innovative projects under the Innovation Fund. The project receives in total €143 million for an industrial- and commercial-scale demonstration of a complete value chain for hydrogen-based iron- and steelmaking, from mine to fossil-free steel.

The EU Innovation Fund is one of the world’s largest funding programs for the demonstration of innovative low-carbon technologies that help reduce greenhouse gas emissions. The European Union is in total investing more than €1.1 billion in total in seven projects that cover a wide range of relevant sectors to decarbonise the European industry and energy sectors, such as chemicals, steel, cement, refineries, and power and heat.

The HYBRIT demonstration project is the only iron- and steel project to have been granted support in the first Innovation Fund call for large-scale projects. The grant agreement was signed by the parties at an official ceremony held in Stockholm, Sweden on April 1st.

“Hybrit is paving the way for a fundamental change in the global steel industry. It also demonstrates how fast the green transition can happen: a few years ago, the possibility of producing emission-free steel would have sounded like science fiction. Now, green steel is entering the market. The support granted via the Innovation Fund is testament to the importance and potential of this technology, and the European Commission is convinced that this cutting-edge project will boost the European Union’s overall competitiveness. Green steel has the future, and that future is already here”

Frans Timmermans, Executive Vice President of the European Commission responsible for the European Green Deal

HYBRIT was granted support to further advance the development towards eliminating emissions from iron and steel production by using fossil-free hydrogen for direct reduction of iron ore in the process. Going forward, the project will continue with proving the technical and commercial viability of the HYBRIT value chain, including (1) a demonstration of the hydrogen direct reduction process including fossil-free hydrogen production in Gällivare, Sweden, (2) a demonstration of electric melting of hydrogen-based direct reduced iron and (3) a demonstration of fossil-free DR-pellets production for the hydrogen reduction process.

“We are glad to receive this significant contribution from the EU Innovation Fund to our continued journey in transforming the iron and steel industry. With the upcoming plant in Gällivare, we will establish a first-of-a-kind facility and process for producing fossil-free sponge iron in industrial scale. This will demonstrate the true potential of the HYBRIT technology and pave the way for competitive production of fossil-free steel and a sustainable future”

Lars Ydreskog, Senior Vice President Strategic Projects, LKAB.

The HYBRIT technology, an essential step towards fossil-free steelmaking, is a key initiative for reaching EU climate targets. The project received support from the EU Innovation fund for its potential to contribute to the transition of Swedish industry and the possibility to mitigate climate change.

“We are very grateful for the support and confidence in HYBRIT and we are proud of industrializing the world’s first completely fossil-free value chain for iron and steel production. Vattenfall is determined to reach fossil free living within one generation and the HYBRIT-technology is crucial to reach that goal“

Andreas Regnell, SVP Strategic Development at Vattenfall and Chairman of HYBRIT.

About HYBRIT

• The “HYBRIT demonstration project” will replace coal-based blast furnaces with direct hydrogen-based reduction technology. The HYBRIT initiative will demonstrate a complete industrial value chain for fossil-free hydrogen-based iron and steelmaking.
• The project will produce approximately 1.35 million tonnes hydrogen reduced iron (sponge iron) annually, to be used for producing crude steel amounting to approximately 25% of Sweden´s total production. This will reduce greenhouse gas emissions by 14.3 million tonnes CO2 over the first 10 years of operation, according to the Innovation Fund calculation model.
• A new facility will be established for first-of-a-kind hydrogen-based direct reduction, with 500 MW fossil-free electrolysis in Gällivare. Furthermore, SSAB will replace its blast furnaces by an electric furnace in Oxelösund.
• HYBRIT will moreover show the viability of technologies needed to melt hydrogen-reduced iron into crude steel. The project will thus lead the way to a full energy transition of the ore-based steel production as access to renewable energy increases.
• The HYBRIT demonstration project has been granted in total €143 million from the EU Innovation Fund. The grant consists of €108 million (Hybrit Development AB) for a demonstration of the hydrogen direct reduction process including fossil-free hydrogen production in Gällivare, a further €30 million (SSAB) for the demonstration of electric melting of hydrogen-based direct reduced iron in Oxelösund and finally €5 million (LKAB) for the demonstration of fossil-free DR-pellets production for the hydrogen reduction process.
• SSAB, LKAB and Vattenfall are making a unique joint effort to change the Swedish iron and steel industry fundamentally. Under the name HYBRIT, we are working together towards a fossil free future.