H2 Green Steel (‘H2GS’), a company developing new green production methods for steel manufacturing using hydrogen, has received funding from Kingspan.
The project’s first phase will require approximately €2.5 billion in funding, the majority of which will be provided by green project financing, with Kingspan serving as an early stage equity investor.
Production will begin in 2024, with a goal of producing 5 million tonnes of green steel per year by 2030. From May 1st, 2021, Henrik Henriksson, the current CEO of Scania (VW-Group), will lead the company.
Kingspan is investing in Series A equity fundraising round. Scania, the IMAS Foundation, and Vargas are among the previously announced investors in the same fundraising round.
Kingspan’s investment also represents the company’s plan to enter into a long-term supply agreement with H2GS, with H2GS supplying a significant portion of Kingspan’s potential steel needs.
Green hydrogen replaces coke and coal in H2GS’s production process, resulting in a nearly CO2-free steel product. The process reduces CO2 emissions by around 95% relative to conventional blast furnace steelmaking: one tonne of H2GS steel emits less than 0.1 tonne of CO2, while a traditional tonne of steel emits more than two tonnes of CO2.
“The building industry is a major user of steel, and steel production is a major source of carbon emissions, it is therefore clear that Kingspan’s Planet Passionate commitment to reduce emissions in its primary supply chain must include a new model of steel production. We have set ourselves the challenging target of reducing emissions from the primary raw materials we use in manufacturing by 50% by 2030, and H2 Green Steel offers a compelling route to achieving this goal. We recognise that for companies to make a meaningful contribution to address the climate crisis they need to be prepared for radical thinking and actions, and our determination to transform our supply chain reflects this.”Gene Murtagh, CEO of Kingspan Group
“We welcome this partnership with Kingspan, a company which like our other partners has prioritised and shown leadership in supporting sustainable economic development. Steel is a vital input in many industry verticals, but the extent of its contribution to emissions from the building and infrastructure sector is not well understood, and green steel will be an important component as it seeks to decarbonise. This will be a first investment and long-term supply partnership with a company in this space, and reflects the depth of demand we see for the steel we will be producing.”Carl Erik Lagercrantz, Chairman of the Board of H2 Green Steel