Decarbonized steel startup H2 Green Steel announced today an investment from European venture capital investor Demeter, with proceeds supporting the construction of the company’s flagship green steel plant in Boden, Sweden, capable of producing steel with 95% lower emissions than traditional blast furnace technology.

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 developing its flagship green 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 most of the CO2 emissions normally produced, and uses electricity from 100% renewable sources for the energy requirements generated in the manufacturing process. Construction began in 2022 and the plant is expected to start operations in 2026, with a goal to annually produce five million tons of green steel by 2030.

The new investment follows a capital raise in January by H2 Green Steel, including around €1.8 billion in equity and €4 billion in debt.

Otto Gernandt, CFO, H2 Green Steel said:

“Demeter shares our sense of urgency and commitment to accelerate climate action. Their investment is an integral part in what has allowed us to go from vision to full execution of the world’s first large-scale green steel plant. We look forward to a long partnership ahead.”

The investment was made in partnership with investment management firm Hy24 which is dedicated to projects scaling the hydrogen industry.

Philippe Detours, Managing Partner at Demeter, said:

“Demeter is thrilled to support H2 Green Steel in the financing of this first green steel production unit as well as of the partnership formed with Hy24 for this end. This investment allows us to reaffirm Demeter’s commitment to the decarbonisation of the industry and the ambition to strengthen our footprint in Europe”.