On a strip of land in northern Sweden, not far from the Arctic Circle, a new facility is taking shape that could help revolutionize one of the planet’s dirtiest industries: steelmaking.

By 2026, if all goes to plan, the site just outside Boden will be filled with industrial buildings painted white, silver, and black – colours to reflect the region’s mountains and lakes – and huge, brick-red towers. This complex will be the world’s first large-scale “green steel” project, according to H2 Green Steel, the Swedish company behind the multi-billion-dollar mill.

Instead of burning coal, it will use “green hydrogen” produced with renewable electricity. The company says its process will cut carbon pollution by 95% compared to traditional steelmaking and is aiming to produce 5 million metric tons of green steel by 2030.

A Step Toward a Greener Future

The development of H2 Green Steel marks a significant step toward overhauling the steel sector. Steel is one of the world’s most commonly used materials, critical for everything from buildings, bridges, cars, and fridges to renewable energy infrastructure like wind turbines. The world consumes a vast amount – nearly 2 billion metric tons each year. The problem is steelmaking is incredibly energy-hungry and remains heavily reliant on coal, the most polluting fossil fuel. The industry accounts for between 7% to 9% of global carbon pollution, and its impact looks set to worsen, with demand projected to jump 30% by 2050.

Pressure for Clean-Up

The industry is under huge pressure to clean itself up. Many hopes are pinned on new technologies, with a particular focus on replacing coal with green hydrogen. H2 Green Steel’s approach offers a promising alternative by using green hydrogen to significantly reduce carbon emissions.

While projects like H2 Green Steel show momentum is growing, experts say the pace is far too slow. New coal-powered steel plants are still being approved and developed globally, potentially locking in decades more emissions, even as the world scrambles to avoid catastrophic climate change.

“The sector is not on track,” said Mohamed Atouife, a researcher at Princeton University who specializes in the use of green hydrogen in heavy industry. The slow pace of adopting green technologies in steelmaking highlights the industry’s resistance to change and the significant challenges it faces in transitioning to more sustainable practices.

The establishment of H2 Green Steel’s facility in northern Sweden represents a critical milestone in the quest to decarbonize the steel industry. By leveraging green hydrogen, this project has the potential to drastically reduce carbon emissions and set a new standard for steel production. However, achieving a sustainable steel industry will require coordinated global efforts, significant investments, and a shift in industry practices to align with climate imperatives.

The journey to a greener steel industry is fraught with challenges, but the advancements being made by companies like H2 Green Steel offer a hopeful glimpse into the future of sustainable steelmaking. The steelmaking industry is notorious for its heavy carbon footprint, primarily due to its reliance on coal in the production process. However, advancements in green steel technologies offer promising alternatives to reduce emissions and move toward more sustainable methods.

Traditional Steelmaking: A Carbon-Intensive Process

Steel production begins with mining iron ore, which is transported by diesel-powered trucks. The most environmentally damaging stage is transforming iron ore into steel using blast furnaces, which burn coal to generate the high temperatures needed to melt the ore. This process involves mixing iron ore with coke—coal heated to remove impurities—creating molten iron that is then converted into steel.

Electric arc furnaces (EAFs) present a greener method of steel production, utilizing electricity to melt metal. This technology is prevalent in the US, where about 70% of steel is made using EAFs. These furnaces can process up to 100% scrap steel, significantly reducing emissions compared to blast furnaces, which can only handle around 30% scrap steel. According to a study commissioned by a steel industry group, EAFs produce around 78% fewer emissions than traditional blast furnaces.

However, the environmental benefits of EAFs depend on the source of electricity powering them. Green electricity is essential to maximize the climate benefits of this process. Additionally, the availability of scrap steel is limited, necessitating the exploration of other low-carbon alternatives such as green hydrogen.

Green Hydrogen: A Promising Solution

The push to replace coal with green hydrogen in steel production is gaining momentum. Green hydrogen is produced by splitting water molecules using renewable energy. This hydrogen can be used to reduce iron ore, which is then melted with scrap steel in an EAF. Unlike coal, which emits carbon pollution, hydrogen produces only water vapour.

Several companies are pioneering the use of green hydrogen in steelmaking. In Sweden, H2 Green Steel and the HYBRIT pilot plant are leading the charge. HYBRIT, a collaboration between SSAB, iron ore producer LKAB, and state-owned power company Vattenfall, made the first-ever green steel delivery to Volvo in 2021 and aims for commercial production by 2026.

In the US, the Biden administration has committed $6 billion to decarbonize heavy industries, including steel. This includes $500 million for Cleveland-Cliffs to develop a hydrogen-ready plant and another $500 million for SSAB to explore green hydrogen ironmaking in Mississippi.

Despite the progress, scaling green steel technology faces significant challenges. The high cost of green hydrogen production and the need for substantial renewable energy infrastructure are major hurdles. Additionally, transitioning from traditional blast furnaces, which can last for decades, to green technologies will require significant investment and commitment.

Experts are optimistic yet cautious about the timeline for a full transition to green steel. While some believe it could happen within the next two decades, driven by initiatives in Europe and the US, others, like Princeton’s Chris Greig, suggest a longer timeframe extending beyond 2050. Accelerating incentives, implementing regulatory measures, and mandating green steel for public infrastructure projects could speed up this transition.

The steel industry has the technological means to reduce its reliance on fossil fuels, but the transition to green steel is not happening quickly enough. Governments, industries, and consumers must act decisively to scale up green steel production, ensuring a sustainable future for the industry and the planet.