SSAB has secured €128m ($138.8m) in funding to decarbonise its Luleå steel plant with green hydrogen thanks to European Commission approval.
The direct Swedish grant will be used to fund the installation of an electric arc furnace (EAF) to produce direct reduced iron (DRI) using renewable hydrogen, to help the existing steel plant move away from coal-based production.
Expected to have capacity for 2.5 million tonnes of green slabs per year, SSAB plans to start producing green steel from 2029.
Using hydrogen DRI in steel production can reduce carbon dioxide (CO2) emissions by up to 95% compared to traditional steelmaking. In DRI, hydrogen can replace coal or natural gas as a reactant with oxygen in iron ore to produce reduced iron for steel processing.
Read more:Will DRI be key to producing sustainable steel?
Located in northern Sweden, the SSAB steel plant currently produces around two million tonnes of crude steel annually, it operates primarily using blast furnaces.
However, it also hosts the three-way HYBRIT project between SSAB, LKAB and Vattenfall, which has been developing green hydrogen DRI technologies since 2016.
In 2023, HYBRIT said its hydrogen-produced sponge iron had “superior properties.”
Read more:Hydrogen reduced DRI has ‘superior’ properties, according to HYBRIT research
“This €128m measure enables Sweden to help SSAB accelerate its switch to electrified steelmaking at its steel plant in the Norrbotten region,” said Margrethe Vestager, Commission Executive Vice-President.
“This will contribute to the greening of the steel value chain, in line with the EU’s target of climate neutrality by 2050.”
However, it comes after SSAB and Fortum last year concluded that producing hydrogen-reduced sponge iron at SSAB’s steel plant in Finland was not commercially viable.
Read more: SSAB and Fortum conclude Finnsih hydrogen-reduced sponge iron plans are not viable
Having undertaken a front-end engineering design (FEED) study on the industrial production of sponge iron and building a hydrogen production plant in Raahe, the pair agreed that it was “not possible to find a commercial arrangement,” and ended the plans.
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