Decarbonized steel startup H2 Green Steel announced today that has secured a supply agreement worth more than €250 million for the delivery of low carbon footprint steel with BILSTEIN GROUP, a Germany-based producer of cold rolled steel strip for automotive, tooling and furnishings sector customers. BILSTEIN was also an early investor in H2 Green Steel.
Demand for fossil-free steel is expected to increase significantly, over the next several years, as manufacturers globally aim to decarbonize their supply chains. Steelmaking is one of the biggest emitters of CO2 globally, and one of the more challenging sectors to abate, with total greenhouse gas emissions (GHG) from the sector accounting for 7% – 9% of direct emissions from the global use of fossil fuels.
Founded in 2020, H2 Green Steel is building the world’s first large-scale fossil-free steel plant in Boden, Sweden, with the project including a giga-scale green hydrogen plant as an integrated part of the steel production facility. The company employs hydrogen produced using green power to remove the oxygen from iron oxide, avoiding 95% of the CO2 emissions normally produced. Using electricity from 100% renewable sources for the energy requirements generated in the manufacturing process, H2 Green Steel aims to produce 5 million tons of fossil-free steel by 2030.
Marc T. Oehler, CEO and Managing Partner at BILSTEIN GROUP, said:
“The ambitious positioning of H2 Green Steel with the aim of producing CO2-neutral steel as quickly as possible and setting up a greenfield project with an optimum process chain and state-of-the-art technology within a short time has thrilled us right from the beginning. The contract now signed is an important milestone for our company on the way to significantly reducing our carbon footprint as quickly as possible and ensuring that a large part of our raw material sourcing is ‘green’ by the end of the decade.”
According to the companies, the agreement will help BILSTEIN GROUP achieve its CO2 reduction targets, with hot rolled steel accounting for more than 90% of the company’s final product’s carbon footprint.
The seven-year supply agreement anticipates deliveries beginning in 2026 from H2 Green Steel’s plant in Boden. The companies said that they will also work together to develop steel grades, share best practices on carbon footprint reduction and on a circular model to recycle scrap from BILSTEIN GROUP’s production sites in H2 Green Steel’s operations.
Henrik Henriksson, CEO of H2 Green Steel, said:
“BILSTEIN GROUP produces demanding cold rolled steel grades and works with high-end specialty production facilities which require exacting standards in some of the most demanding grades for any steel producer. Working with them is a real vote of confidence in our future sustainable steel production and a milestone achievement for us. Additionally, working with a family-owned company like BILSTEIN GROUP, with a lot of solid legacy which, combined with a strong and future-looking capability, makes them a very good partner to us.”