Steel service centre Steel Processing Midlands (SPM) has this month entered into a supply agreement with Swedish company H2 Green Steel. The 5-year agreement, which is worth €125 million, will supply SPM with 25% of its future annual steel demand.
H2 Green Steel, whose flagship plant is currently under construction in Boden, northern Sweden, launched in 2020 in a bid to accelerate the decarbonisation of steel manufacturing by using green hydrogen. The new plant, which is the first new steel mill in Europe in over 50 years, will be fully digitised and have a facility for green hydrogen production as well as producing green direct reduced iron to feed the steel mill.
Using green hydrogen instead of coal reduces CO2 emissions from the reduction process by up to 95%, and it is estimated that by 2030, annual production at the Boden plant will be at 5 million tonnes of green steel.
Founded in 2020, H2 Green Steel sought to accelerate the decarbonisation of hard-to-abate industries, starting with steel as one of the world’s largest carbon dioxide emitters.
Offering the greenest steel at 195kg CO2 emitted per tonne of steel produced, H2 Green Steel was the most attractive option to SPM in their decarbonisation journey.
Nick Liggins, Commercial Director at SPM, said: “Green steel is undeniably the future. As the cost of emissions start to impact traditionally made steel, green steel will fast become commercially the better option of the two, as governments drive companies towards CO2 reductions.
“[We] believe that companies who embrace this change early will have an advantage in their sector, particularly as demand for these products could outstrip supply in the next 5 years.”