Green steel company Hybrit, a joint project of Sweden's SSAB, LKAB and Vattenfall, has urged the country's government to foster swifter authorisation for new projects and help ensure sufficient green electricity to fuel Sweden's climate ambitions.

 

In a discussion between Hybrit's leaders and Swedish trade and climate ministers, the company called for swifter permissions processes and for local authorities' decisions to take greater account of projects' benefits to the climate.

 

"Regulators pay a lot of attention to the local environment, but not to the net benefits to the climate," said Anna Borg, chief executive of Swedish utility Vattenfall.

 

Hybrit is currently building a pilot hydrogen storage facility in Lulea for completion in the first half of 2022, and intends to complete a pilot hydrogen and direct reduced iron (DRI) plant in Jallivare by 2026. "Our greatest challenge is not to have the ability to develop and build the plant, but to get all the necessary permits in order to actually build it," said Jan Mostrom, chief executive of mining and minerals group LKAB.

 

Sweden's minister for trade and industry Ibrahim Baylan agreed that it would make sense to boost the funding of local authorities in the north of the country to better equip them to deal with planning proposals from energy companies, steelmakers and miners. "Local authorities struggle to have the competence and capacity required to deal with these issues," said Mostrom.

 

Norrbotten in the sparsely populated north of Sweden is the location of LKAB's iron ore mines, SSAB's steel mill, an abundance of hydropower plants and Hybrit's sites, as well as being the proposed location of 2021-founded H2 Green Steel's integrated hydrogen-based steel plant. The development of large hydrogen storage facilities by Hybrit and H2 Greensteel is also an opportunity to look for solutions to Sweden's regionally and seasonally unbalanced electricity consumption, said Baylan.

 

Transmission system operator (TSO) Svenska Kraftnat has forecast that Sweden's ambition to achieve net zero emissions by 2045 could drive the country's annual electricity requirement up to 175-290TWh by 2045, from roughly 140TWh currently.

 

Competitive Hydrogen-based steel needs carbon pricing

 

Hybrit also emphasised the importance of the state's role in fostering a "level playing field" by applying pressure to other countries within and outside of the EU, while Eurofer recently called for more free emissions allowances for the steel industry, targeted funding and the combination of a carbon border adjustment mechanism with the current emissions trading system (ETS).

 

Consultancy firm McKinsey estimates that hydrogen-based steelmaking will incur extra costs of €170/t, but that increases in scaled hydrogen production and carbon taxes will make the route a competitive option by 2050. It seems that the steel industry and its suppliers will continue to pressurise national governments and the EU regarding carbon costs for the foreseeable future.

 

LKAB last week appealed a decision by the EU to not compare LKAB's sintered iron ore pellets with the sintered iron ore produced by steel companies in the ETS. If the EU considered the lower carbon footprint from pellet manufacture, it would grant fewer free emissions allowances to European steel producers' sinter plants and increase allocations to pelletising plants in the Nordic region, LKAB said.

 

Confidence in green steel demand

 

Hybrit is confident that there will be a market for green steel by the time the company reaches its target of 1.3mn t/yr of green steel by 2026, with the planned conversion of steelmaker SSAB's Oxelosund blast furnaces to an electric arc furnace.

 

"I see demand and interest increasing by the day," said Martin Lindqvist, chief executive of SSAB. Swedish automaker Volvo and SSAB plan to jointly develop truck parts made from hydrogen-based steel, while Swedish truck manufacturer Scania intends to use steel produced by H2 Green Steel and is a major investor in the company.

 

H2 Green Steel completed its first round of funding on 24 May, raising $105mn towards its integrated steel plant, with construction set to start in the first half of 2022. Other investors include German auto parts manufacturer Bilstein, carmaker Mercedes-Benz, Italian re-roller Marcegaglia, Swedish scrap firm Stena Metall and German engineering firm SMS Group.

 

Hybrit expects regional competition from H2 Green Steel to favour the companies' competitiveness against coal-based steel imports. By the same logic, the steps taken by German steelmakers ThyssenKrupp, Dillinger and Salzgitter towards fully or partially hydrogen-based steelmaking will contribute to greater supply efficiency and greater competitiveness against higher-emission steels globally.

 

Salzgitter and German utility Eon, tested a pilot green H2 plant in March which will produce hydrogen from wind power, for use in a new DRI plant set to start production in the first half of 2022.

 

ThyssenKrupp and its subsidiary HKM are considering importing hydrogen into Rotterdam, as well as a possible pipeline corridor between Rotterdam and the companies' steel plants, while the Amsterdam-Rotterdam-Antwerp ports are investigating several opportunities for the shipment and storage of hydrogen.

 

Dillinger is developing a blast furnace operated by its subsidiary Rogesa which will allow the use of process gases as well as green hydrogen in the place of coke, and has applied for Important Projects of Common European Interest funding along with five transport and energy companies, in the hope of establishing a cross-border green hydrogen economy in France, Luxembourg and Germany's Saar region.

 

Source: Argusmedia