Vattenfall and partners clear fossil-free steel project in Sweden

Author: Patrick.

February 1 (Renewables Now) - Vattenfall AB and its two partners have given the go-ahead to the HYBRIT project and will proceed with the planning and designing of a pilot fossil-free steel production plant in northern Sweden.

In the spring of 2016, the Swedish state-owned utility teamed up with steel products maker SSAB AB (STO:SSAB-B) and state-owned mining company LKAB under the so-called HYBRIT initiative aimed at developing a steelmaking process that emits water rather than carbon dioxide (CO2). The idea is to use hydrogen produced with electricity from fossil-free Swedish sources.

In June 2017, the trio formed a joint venture (JV) and initiated a pre-feasibility study for the project.

Today, Vattenfall announced that the partners hope to begin the planning and designing of the pilot plant in Lulea and the iron ore deposits in Norrbotten this spring. The total cost of this process is estimated at SEK 20 million (USD 2.5m/EUR 2m) and the Swedish Energy Agency will finance half of it.

After completing the pre-feasibility study, the partners have determined that fossil-free steel would be 20-30% more expensive, but will be able to compete in the market with traditional steel in future, as the prices of electricity from fossil-free sources continue to decline and the costs for carbon dioxide emissions through the European Union Emissions Trading System (ETS) rise.

“Fossil-free steel production starts in the mine, and we’re currently working intensively on how the next generation of pellet plants will be designed, as well as how a future electrified and more highly automated mine should be designed,” said Jan Mostrom, president and CEO of LKAB.

HYBRIT’s CEO Marten Gornerup noted that also this spring the company will look into the possibility of extending the project to Finland.

The HYBRIT initiative could cut Sweden’s total carbon dioxide (CO2) emissions by 10% and those in Finland by 7%, Vattenfall said, but noted that the state, research institutions and universities should make significant contributions for the project to be successful.

The ultimate goal is to have a totally fossil-free process for steel production by 2035.

According to the EU’s statistical office, Sweden generated about 53.8% of its gross final energy from renewable energy sources in 2016, already exceeding its national target of 49% for 2020. It was followed by Finland, where 38.7% of the energy came from renewables, so it has also achieved its goal of 38% for 2020.

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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