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H2 Green Steel and Iberdrola announce EUR 2.3 billion green hydrogen venture

H2 Green Steel AB (H2GS), a newly formed Swedish company that plans to develop green steel projects, and Spain-headed power utility Iberdrola Group (Iberdrola), have announced a partnership looking to build a 1 GW plant to produce green hydrogen. The new plant will produce and feed green hydrogen to a 2-million-tonne direct reduction tower, enabling green steel production with a reduction of carbon dioxide (CO2) emissions by 95 percent.

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H2 Green Steel AB (H2GS) and Iberdrola Group (Iberdrola), have announced a partnership looking to build a 1 GW plant to produce green hydrogen on the Iberian Peninsula. Henrik Henriksson (left), CEO of H2 Green Steel, and Millán García-Tola, Iberdrola’s Global Hydrogen Director (image courtesy H2GS).

According to a statement, 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 H2GS 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.

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 enabling 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, said Henrik Henriksson, CEO of H2GS.

The companies have agreed to establish a Green Hydrogen production facility with 1 GW electrolysis capacity, and a direct reduction of iron (DRI) process capable of producing approximately 2 million tonnes of direct reduced Green Iron annually. The electrolyzer will be jointly owned and operated by Iberdrola and H2GS.

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, said Aitor Moso, Iberdrola’s liberalized business director.

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

EUR 2.3 billion investment

The green impact venture will be financed with a combination of public funding, green project financing, and equity. With a budget of approximately EUR 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, said 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.

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