Swedish H2 Green Steel and Iberdrola are looking into putting a 1-gigawatt green hydrogen manufacturing facility in Portugal, with a total investment of €2.3 billion.
In December, the Swedish firm and the Spanish power utility announced their alliance. When contacted by ECO, H2 Green Steel indicated that three locations in the Iberian Peninsula are being investigated, one of which is in Portugal, but provided no further details. Iberdrola was also approached by ECO, but they did not respond.
H2 Green Steel is a corporation that specializes in decarbonizing the iron ore transformation process to produce “green steel.” One of the components of such a process is green hydrogen. Steel is one of the most polluting industries, accounting for 8% of worldwide CO2 emissions.
The two businesses claimed at the time that the sites under consideration “would have access to renewable power at a lower cost, as well as the required infrastructure to effectively operate a green hydrogen, green iron, and green steel business.”
Sines has long been the most sought-after location in Portugal for green hydrogen project development. A 1.3 billion project managed by Portuguese-Dutch Madoqua Ventures and supported by Danish Copenhagen Infrastructure Partners and Dutch Power 2X was announced in April, with the majority of the funds going to the city on the Alentejo coast.
GreenH2Atlantic, a collaboration of 13 firms and partners led by EDP and Galp, aims to build a 100 MW electrolyzer in Sines’ former coal-fired power station. Meanwhile, the oil business has launched a second 100 MW project in the same area.
According to H2 Green Steel, the 1-gigawatt output will be used as fuel for a direct steel reduction furnace (a production method that uses natural gas or hydrogen and has a lower environmental impact) capable of producing up to two million tonnes of “green steel” while reducing CO2 emissions by up to 95 percent. H2 Green Steel and Iberdrola will own and run the electrolyzer, while the Swedish business will own and operate the direct reduction unit.
“They will examine the potential to jointly establish a green steel manufacturing plant capable of generating between 2.5 and 5 million tonnes of green steel per year,” the firms said in a joint statement. H2 Green Steel, which was created in 2020, is building its first facility in Boden, Sweden, which will be operational by 2024.
Vargas, the company’s founder, and largest shareholder was also an early investor in Swedish lithium-ion battery maker Northvolt, which in December announced a joint venture with Galp (Aurora) to build “Europe’s largest and most sustainable lithium conversion plant,” with a production capacity of up to 35,000 tonnes of lithium hydroxide per year.
The two firms announced their decision to build the refinery in Setubal, namely the Sapec Bay Industrial Park, in mid-April. Commercial operations are expected to begin in 2026.
