Steelmaking transformation? H2 Green Steel pre-sells 1.5M tons of carbon-reduced metal
16 May 2022 --- H2 Green Steel has secured offtake supply agreements for over 1.5 million tons of its carbon-reduced steel, which it will begin producing in 2025. The company says the pre-sales indicate “a clear sign of strong customer demand for green steel.”
The customer contracts include different industries and have a duration of approximately 5-7 years. The planned initial yearly production volume is 2.5 million tons.
“When we launched H2 Green Steel about a year ago, we kicked the transformation of the steel industry into a new gear, and other players in the industry have moved up their timelines. We are leading the way, showing that it is possible to transform the carbon-intense steel industry quickly, and others are speeding up and stepping up,” says Henrik Henriksson, H2 Green Steel’s CEO.
“This [uptake] is exactly what we want. On top of that, the feedback from customers has been phenomenal, and their long-term commitments are key for us to scale up further.”
H2 Green Steel says the technology for making green steel is available and customers are willing to pay a premium for it. When a reasonable polluter-pays principle is in place and put in product cost calculations, the business case for green steel will be even stronger, it adds.
“Presently, the term green steel can mean different things. To us, it means steel produced from a combination of a significant amount of green virgin iron and scrap in a production process which uses electricity from renewable energy sources and where the total CO2 emissions are more than 90% lower than that of traditional steelmaking in a blast furnace process,” explains Henriksson.
“Recycling scrap is part of the equation, but it will not be enough to meet the global demand for steel. We need to make sure that all the new steel is truly sustainably produced.”
H2 Green Steel has pre-sold over 1.5 million tons of its carbon-reduced steel to customers in different industries.
Supporting Science Based targets
Most of the customers pioneering the green transition with H2 Green Steel have signed up for Science Based Targets covering not only scope 1 and 2 but also scope 3 emissions.
These companies want to drastically reduce their products’ carbon footprint because they realize that this is what their customers are demanding, underscores Mark Bula, H2 Green Steel’s CCO.
“Customers are putting significant value in the CO2 reductions achieved in the high quality hot rolled, cold rolled and galvanized steel we will deliver to them. It’s amazing to see how fast the sentiment in the market has changed since our introduction a year ago. The demand for green steel by far exceeds what I had expected, and the interest is coming from a broad range of industries. We are already converting this volume into binding long-form agreements with our customers,” he says.
Steel in the spotlight
In February, the Association for European Producers of Steel for Packaging (APEAL) released a report on the environmental sustainability benefits of steel packaging and how to boost recycling rates throughout the EU as part of the bloc’s European Green Deal.
The association promotes steel as an environmentally sustainable solution for a range of essential packaging items, touting the material’s high recycling rates and giving advice on how better sorting, collection and design can further circularize the economy and lower EU carbon emissions.
More recently, German tinplate manufacturer Thyssenkrupp Rasselstein launched the “world’s first” food can made of carbon-reduced bluemint steel in collaboration with Swiss packaging company Hoffmann Neopac and cough drop producer Ricola.
Edited by Joshua Poole
