New green hubs will be created according to the H2 Green Steel and Vale agreement.

World GHG emission

Greenhouse gas (GHG) emission is today’s one of the top priorities. The biggest economic sector that is responsible for the GHG emission is the energy sector c.a. of 73% of world emissions. In it, the iron and steel industry is responsible for 7.2% of world GHG emissions and c.a. of 25% of GHG emissions in Europe. In 2022 GHG emission from industry declined to 9.2 Gt (drop by 1.7% in comparison to 2021). This was largely driven by the decrease in China’s industry by ca. of 161 Mt CO_2. The recorded drop resulted in a 2% decline in steel making. Despite this drop new action still needs to be taken to fulfill the Paris Agreement. New solutions should reduce GHG emissions, but not at the expense of reducing production.

Green hubs

The answer to this may be a sign of cooperation between Vale and H2 Green Steel. Based on it green industrial hubs will be created. In green hubs the H2 Green Steel is going to produce a low-carbon steel value chain product like hot briquetted iron (HBI) and hydrogen. Vale is expected to build and operate briquette plants which will feed direct reduction reactors for the production of HBI and other metallics. Moreover, Vale is going to supply its iron ore briquettes for production.

After the signed agreement Eduardo Bartolomeo (Vale president) claimed „With this agreement, we are in Brazil partnering with a green iron and steel producer that is at the forefront of global decarburization, while fostering the low-carbon industry and stimulating the green hydrogen chain in the country”

Vice-president Kajsa Ryttberg-Wallgren from H2 Green Steel stated “We announced early on our journey that we want to explore other geographies where we can accelerate the decarbonization of the steel value chain.”

New possibilities

What is more H2 Green Steel signed agreements with Volvo, Ikea, and Rio Tinto.

In the case of Ikea, the steel will be applied in warehouse racking. Half of which will be replaced by green steel.

Karen Pflug, Chief Sustainability Officer, Ingka Group has indicated: “Significant steel volumes from our warehouse racking business will contain green steel. Such improvements will allow us to transition from traditional steel to less carbon-intensive and can support us in reducing carbon emissions in this category by up to 95 percent2.

The agreement placed by Volvo is for green steel which will be manufactured from H2 Green Steel’s new plant in Boden (Sweden). The start of production is planned for the end of 2025.

Andrea Fuder, Chief Purchasing Officer of Volvo Group has highlighted: “Steel is a big contributor to the footprint of our products, and working together with both established and new players for developing decarbonized materials is key to advancing our progress in sustainable transport and infrastructure solutions”

What’s more the additional multi-year supply agreement between H2 Green Steel and Rio Tinto’s Iron Ore Company for direct reduction iron ore pellets (DR Pellets – a critical material required for the production of high-grade HBI via electric arc furnace) was signed. Based on the agreement a major volume of DR Pellets to the flagship H2 Green Steel plant in Boden will be delivered. Additionally, Rio Tinto will purchase and on-sell a part of the surplus low-carbon hot briquetted iron (HBI).