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26 June 2024 | News

EU approves €265m for Sweden’s H2 Green Steel plant

The European Commission has announced €265m ($284m) will be made available for H2 Green Steel to develop a large-scale green steel plant.

EU approves €265m for Sweden’s H2 Green Steel plant

The European Commission has approved, under EU State aid rules, a €265 million Swedish measure made available in part through the Recovery and Resilience Facility (‘RRF') to support H2GS AB in setting up a large-scale green steel plant. The measure will contribute to the achievement of the EU Hydrogen Strategy, the  European Green Deal and the Green Deal Industrial Plan  targets, while helping to end dependence on Russian fossil fuels and accelerate the green transition, in line with the REPowerEU Plan.

The Swedish measure

The measure notified by Sweden, with a budget of €265 million, will be partially funded through the RRF following the Commission's positive assessment of the Swedish Recovery and Resilience Plan and its adoption by the Council.

The measure will support H2GS's project aimed to set up a large-scale green steel plant in Boden, Sweden. The steel plant includes the construction of: (i) one of the largest electrolysers in the world with a capacity of 690 megawatt; (ii) a direct reduction plant operating with renewable hydrogen; (iii) two electric arc furnaces; and (iv) cold rolling and finishing facilities.

The new installations are envisioned to start operating in 2026. They are expected to produce 2.4 million tonnes of green steel per year. The use of renewable energy for the whole manufacturing process will neutralise up to 87% of greenhouse gases emissions compared to traditional steel manufacturing processes. H2GS has committed to actively share the experience and technical know-how gained through the project with industry and academia.

The aid will take the form of a direct grant of €265 million. The project, which concerns a €6 billion total investment, will be primarily financed by private investment but it has also been selected for support under the EU Innovation Fund and has received financing from the European Investment Bank.