Nordic steel giant to use renewable hydrogen to produce fossil-free steel by 2026

Momentum is growing towards the decarbonisation of one of the world’s most energy intensive industries, with another major European industrial manufacturer turning to renewable hydrogen to replace coal in the production of steel –  nearly 10 years earlier than it thought possible.

Svenskt Stål AB (Swedish Steel or SSAB), which is headquartered in Sweden and partly owned by the government of Finland, announced that it would make substantial investments to accelerate the transition of its steel furnaces to using emissions-free, renewable hydrogen.

“We are tightening up our original goal from the original 2035. We have promised our customers that we will have fossil-carbon-free steel for the European and North-American markets in 2026. We are rebuilding our factories and finalizing everything by 2040,” SSAB’s director of environment Harri Leppänen said.

The production of steel is a highly energy intensive process, with significant amounts of thermal heat required to melt iron ore and the subsequent pig iron it produces to produce steel.

Historically, a mix of thermal and metallurgical coal has been necessary, but there has been growing attention has been directed towards the role renewable hydrogen can play in decarbonising an otherwise emissions intensive industrial process.

The shift to renewable hydrogen in steelmaking will have a significant impact on the emissions of the two Nordic countries with major SSAB operations, leading to a reduction of 7 per cent of Finland’s greenhouse gas emissions and up to 10 per cent of Sweden’s emissions.

Both countries have set goals to reach carbon neutrality, by 2035 in the case of Finland and Sweden by 2045. The economies of both countries heavily feature industrial manufacturing, including vehicle and machinery production, creating a significant demand for steel.

“It will take time for a completely new market for fossil-free products to emerge and so we need to start now. Together with our customers, we will work to find successful business models to launch fossil-free products on the market already in 2026,” SSAB CEO Martin Lindqvist said.

”SSAB will offer the first fossil-free steel products on the market already in 2026. We seek to initiate partnerships with our customers around common goals so that they can be the first in the world to include fossil-free steel in their own products.”

The announcement highlights the type of action that can be driven by major industrial companies operating under national governments that have established leadership in climate action.

“In line with the Finnish Government’s program, the technology industry is committed to pursuing carbon-neutral Finland by 2035. The industry will use a low-carbon road map to determine what technologies and measures are needed to achieve this goal,” SSAB said in a statement.

“The most effective ways of reducing direct emissions in the industry are new innovations, such as SSAB’s hydrogen reduction and the electrification of machinery and equipment. For example, machine tools and cranes used in mines and industry can be converted to electric power.”

“In addition, energy efficiency, waste heat utilization, circular economy and digitalisation offer significant opportunities for technology companies and their customers to reduce emissions quickly. However, these efforts will require significant investment, access to affordable clean electricity and targeted investment in R&D.”

In 2016, SSAB partnered with iron ore producer LKAB and one of Europe’s largest electricity generators Vattenfall to form the Hybrit initiative, which sought to address the higher costs that came with seeking to produce steel without associated greenhouse gas emissions.

While carbon is an essential ingredient in the steel manufacturing process, the use of hydrogen for thermal heat dramatically reduces the amount of coal required, ensuring the bare minimum amount of the fossil fuel is used.

Steel manufacturing is one of the world’s largest consumers of fossil fuels, and it has been estimated that the industry currently accounts for somewhere between 7 and 9 per cent of global greenhouse gas emissions.

The commitment from SSAB follows a successful first trial of the use of renewable hydrogen in steel furnaces by German steel manufacturer Thyssenkrupp.

Thyssenkrupp intends to transition all of its steel manufacturing away from a dependency on thermal coal and is aiming to run at least three of its steel blast furnaces completely on hydrogen as soon as 2023. Thyssenkrupp has set itself the target of achieving carbon neutrality by 2050.