Steel is one of the major CO2 emitters in, for example, wind turbine production. Steel production is a major climate impact and accounts for around eight percent of all CO2 emissions and 25 percent of industrial emissions in the EU. So there is a major CO2 saving if you can manage to produce steel with a smaller climate footprint.
Such a product is of course also a possible investment case, and a number of Danish pension funds have seen opportunities in it. Thus, PKA, PenSam, AkademikerPension and Lærernes Pension have invested over two billion DKK in the company H2 Green Steel, which is in the process of building the world's first large-scale green steel plant in northern Sweden.
The investment is being made through the joint asset manager AIP Management as a so-called mezzanine loan. It is part of a larger capital raising, in which H2 Green Steel will receive a total of over 30 billion DKK. DKK. This is stated by PKA in a press release.
- For us, this is the next natural step in our work with the green transition. At PKA, we have invested massively in renewable energy such as wind and solar for over a decade. But the reality is that everything we all consume in our everyday lives must, to some extent, be converted to greener production methods. Especially heavy and difficult-to-convert industries such as steel. That is why innovative companies like H2 Green Steel are needed, says Jon Johnsen, CEO of PKA.
The future steel plant will be located in the northern Swedish town of Boden, where conditions are optimal for producing green steel. It will deliver steel with up to 95 percent less CO2 emissions than steel produced in the traditional way.
This is done by replacing coal with green hydrogen in the processes where iron ore is heated and reduced so that it can later be made into steel. The green hydrogen will be produced on site in what will be Europe's largest electrolysis plant. The steelmaking and finishing process itself will also be electrified with electricity from renewable energy sources such as wind power.
The steel mill is expected to produce up to 2.5 million tonnes of finished flat steel per year.
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