The Swedish green impact company, H2 Green Steel (H2GS), and Iberdrola, a world-leading renewable energy company with global headquarters in Spain, have announced a partnership to build a 1 GW plant to produce green hydrogen. The new plant will produce and feed green hydrogen to a 2 million t direct reduction tower, enabling green steel production with a reduction of CO2 emissions by 95%.
The site will be located on 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.
“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 decarbonisation of heavy industrial processes such as the production of steel. Innovative projects like this will help to speed up the commercialisation of larger and more sophisticated electrolysers, 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,” says Aitor Moso, Iberdrola's liberalised business director.
The companies have agreed to establish a green hydrogen production facility with 1 GW electrolysis capacity, and a DRI process capable of producing approximately 2 million tpy of direct reduced green iron. 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 tpy of green flat steel, in conjunction with the plant.
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 (JV)’s large-scale green hydrogen production will help enable the transition of heavy industry towards sustainable operations.
The partnership was initiated following discussions facilitated by the European CEO Alliance initiative, where H2 Green Steel and Iberdrola joined forces with other European companies for a zero-carbon future and a more resilient and sustainable Europe. The CEO Alliance supports decarbonisation efforts by identifying potential collaborations, fostering green investments and deploying projects that advance the development of sustainable economies and societies, in line with the European Green Deal.