H2 Green Steel has signed customer contracts in different industries of more than 5-7 years for over 1.5 million tonnes per year out of the planned initial yearly production volume of 2.5 million tonnes.
“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. This 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,” says Henrik Henriksson, CEO of H2 Green Steel.
The technology for making green steel is there, and the customers are willing to pay a premium for it. When a reasonable polluters-pay-principle is in place and put in product cost calculations, the business case for green steel will be even stronger.
Meaning of green steel
“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 percent lower than that of traditional steelmaking in a blast furnace process. 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,” says Henriksson.
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. This accelerates their determination to change. These companies want to drastically reduce the carbon footprint within in their products because they realize that this is what their customers are demanding in turn, both today and in the future, and they are willing to pay premium for it.
“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,” says Mark Bula, Chief Commercial Officer, H2 Green Steel.
The sectors recognized as frontrunners driving this change include steel service centers, pipe and tube, passenger vehicles and heavy commercial vehicles, whitegoods and construction products. Examples of customers that have signed term sheets or supply agreements for steel so far with H2 Green Steel include Adient, BE Group, BILSTEIN GROUP, BMW Group, Electrolux, Kingspan, Klöckner & Co, Lindab, Marcegaglia, Mercedes-Benz, Miele, Mubea, Purmo Group, Roba Metals, Scania, Schaeffler, Zekelman Industries and ZF Group.