H2 Green Steel and Iberdrola announce €2.3 billion Green hydrogen venture

The Swedish green impact company H2 Green Steel (H2GS) and Iberdrola, a world-leading renewable energy company with global headquarters in Spain, today announced a partnership to build a 1GW plant to produce Green Hydrogen. The new plant will produce and feed Green Hydrogen to a 2-million-ton direct reduction tower, enabling Green Steel production with a reduction of CO2 emissions by 95 percent. 

The site will be located in the Iberian Peninsula, where several possible locations are currently being considered, with production intended to start in 2025 or 2026. The locations that H2 Green Steel and Iberdrola are assessing will all have access to cost-effective renewable electricity and the infrastructure required to successfully operate a Green Hydrogen, Green Iron and Green Steel business. 

Henrik Henriksson, CEO of H2 Green Steel, and Millán García-Tola, Iberdrola’s Global Hydrogen Director.

“We are proud and thrilled to partner with Iberdrola to enable the increased production of Green Hydrogen and Green Iron. Large-scale Green Hydrogen production will be key to enable the transition of heavy industry towards sustainable operations. By working with a world-class partner, we can initiate our growth journey while reducing the technical risk in our Boden project. Iberdrola brings invaluable experience, technology and know-how that will be used to take our Green Steel projects to the next level,” says Henrik Henriksson, CEO of H2 Green Steel.

“Green Hydrogen will be a critical technology in the decarbonization of heavy industrial processes such as the production of steel. Innovative projects like this will help to speed-up the commercialization of larger and more sophisticated electrolyzers, making green hydrogen more competitive. With access to abundant supplies of low-cost renewables, and a highly skilled workforce, the Iberian Peninsula can be central to Europe taking a global lead in the development of this new green technology.”

Aitor Moso, Iberdrola’s liberalized business director.

The companies have agreed to establish a Green Hydrogen production facility with 1GW electrolysis capacity, and a DRI process capable of producing approximately 2 million tons of direct reduced Green Iron annually. The electrolyser will be jointly owned and operated by Iberdrola and H2 Green Steel. Iberdrola will deliver renewable energy to the plant, while the DRI production, including any downstream Green Steel production processes, will be owned and operated by H2 Green Steel. The companies will explore the opportunity to co-locate a Green Steel production facility capable of producing 2.5-5 million tons of Green flat steel annually, in conjunction with the plant.

“Our project in Boden in northern Sweden has proved that there is a very strong demand for Green Steel from a broad customer base. The collaboration with Iberdrola will strengthen and refine our Boden platform, infrastructure, and project execution. With two European locations, we will make an even greater impact, get closer to customers, and meet the demand of an expanding market. Together with Iberdrola, we are creating a broader European platform for the Green Hydrogen economy.”

Kajsa Ryttberg-Wallgren, EVP Head of Business Unit Hydrogen at H2 Green Steel.

The green impact venture will be financed with a combination of public funding, green project financing and equity. With a budget of approximately €2.3 billion, the joint venture’s large-scale Green Hydrogen production will help enable the transition of heavy industry towards sustainable operations.

“The partnership with H2 Green Steel expands on the range of alliances we have in place across the world to fully realize the benefits of Green Hydrogen. We are also working with fertilizer producers, oil refineries, transport providers, and even whisky producers. The challenge of achieving net zero demands both vision and action across many industrial sectors. With the development of Green Hydrogen, companies continue to prove that they have the required ambition”

Millán García-Tola, Iberdrola’s Global Hydrogen Director.

The partnership was initiated following discussions facilitated by the European CEO Alliance initiative, where H2 Green Steel and Iberdrola have joined forces with other European companies for a zero-carbon future and a more resilient and sustainable Europe. The CEO Alliance supports decarbonization efforts by identifying potential collaborations, fostering green investments and through the deployment of projects that advance the development of sustainable economies and societies, in line with the European Green Deal.

About H2 Green Steel

H2 Green Steel (H2GS AB) was founded in 2020 with the ambition to accelerate the decarbonization of the steel industry, using green hydrogen. Steel, which is one of the world’s largest carbon dioxide emitters, is the company’s first business vertical. The founder and largest shareholder of H2 Green Steel is Vargas, which is also co-founder and one of the larger shareholders in Swedish battery maker Northvolt. H2 Green Steel is headquartered in Stockholm, Sweden, with its first green steel plant under development in Boden, northern Sweden. 

About Iberdrola

Iberdrola is one of the largest global energy suppliers and the leader in renewables, championing the energy transition towards a low-emissions economy. The group supplies energy to around 100 million people in dozens of countries and has renewable, grid and commercial activities in Europe (Spain, the UK, Portugal, France, Germany, Italy and Greece), the US, Brazil, Mexico and Australia, as well as being active in growth markets including Japan, Ireland, Sweden and Poland. With a workforce of more than 37,000 and assets of over €122.518 billion, the company recorded turnover in excess of €33 billion and a net profit exceeding €3.6 billion in 2020. 

The company supports 400,000 jobs in its supply chain, with an annual procurement budget of €14 billion. A leader in the fight against climate change, Iberdrola has committed more than €120 billion over the last two decades to building a sustainable energy model based on sound environmental, social and governance (ESG) principles.

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