Sourcing Renewables  -  December 6, 2021

H2 Green Steel and Iberdrola Launch €2.3 Billion Green Hydrogen Venture

The Swedish green impact company H2 Green Steel (H2GS) and Iberdrola, a renewable energy company with headquarters in Spain, announced a partnership to build a 1-gigawatt plant to produce green hydrogen. The new plant will produce and feed green hydrogen to a 2 million ton direct reduction tower, enabling Green Steel production with a reduction of CO2 emissions by 95%. 

The site will be located in the Iberian Peninsula, where several possible locations are currently being considered and production is intended to start in 2025 or 2026. The locations that H2 Green Steel and Iberdrola are assessing will all have access to cost-effective renewable electricity and the infrastructure required to successfully operate a green hydrogen, green iron and green steel business. 

“We are proud and thrilled to partner with Iberdrola to enable the increased production of green hydrogen and green iron. Large-scale green hydrogen production will be key to enable the transition of heavy industry towards sustainable operations,” said Henrik Henriksson, CEO of H2 Green Steel in a statement. 

The companies agreed to establish a green hydrogen production facility with 1-gigawatt electrolysis capacity and a DRI process capable of producing approximately 2 million tons of direct reduced green iron annually. The electrolyser will be jointly owned and operated by Iberdrola and H2 Green Steel. Iberdrola will deliver renewable energy to the plant, while the DRI production, including any downstream green steel production processes, will be owned and operated by H2 Green Steel. The companies will explore the opportunity to co-locate a green steel production facility capable of producing 2.5-5 million tons of green flat steel annually, in conjunction with the plant.

“Green hydrogen will be a critical technology in the decarbonization of heavy industrial processes such as the production of steel,” said Aitor Moso, Iberdrola's liberalized business director. “Innovative projects like this will help to speed up the commercialization of larger and more sophisticated electrolyzers, making green hydrogen more competitive.”

The green impact venture will be financed with a combination of public funding, green project financing, and equity. With a budget of approximately €2.3 billion, the joint venture’s large-scale green hydrogen production will help enable the transition of heavy industry towards sustainable operations.

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