Newly formed company Hybar announced today that it has raised $700 million of debt and equity financing, with proceeds to be used to build and operate an environmentally sustainable and technologically advanced scrap metal recycling steel rebar mill, expected to position the company as the lowest greenhouse gas (GHG) emitting North American steel producer.
Demand for low carbon 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.
Hybar’s technology is designed to significantly reduce the amount of energy needed to produce rebar. The company’s planned mill in northeast Arkansas will be directly connected to an adjacent solar facility, enabling Hybar to operate the mill with 100% renewable electricity at certain periods. The mill is expected to take 22 months to construct, and is anticipated to produce 630,000 tons of rebar annually. The mill technology is being supplied by metal industry plant construction and mechanical engineering company SMS Group.
The company said that it has also become the first steel company globally to be certified to issue Climate Bonds, which demonstrate compliance with the international Paris Agreement’s GHG emissions targets.
Hybar CEO Dave Stickler said:
“The Climate Bond certification aligns perfectly with Hybar’s plan to offer our customers competitively priced rebar that is also the greenest rebar in the market.”
The equity portion of the financing was led by TPG Rise Climate, the $7 billion climate investing strategy of TPG’s global impact investing platform, TPG Rise, and Global Principal Partners, the investment entity used by Hybar’s senior management team.
Of the proceeds raised, $470 million will be used to build the mill, with the remainder used to start up and operate the mill and pay certain debt service costs during construction.
TPG Partner Mike Stone said:
“Our investment in Hybar not only reflects the trust we have in this talented management team but our thematic focus on sustainable materials broadly, and on green steel production specifically. The global steel industry accounts for 7-9% of global CO2 emissions today, which creates a massive opportunity for Hybar to drive decarbonization at scale.”