This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.


Sweden early to adopt hydrogen pathway to net-zero steel

image credit: Rethink Research
Simon Thompson's picture
Publisher - Rethink Energy Rethink Research

I work for "Rethink Energy”, the unique research service offering reports and forecasts about energy transition, renewables and their investment possibilities.It's about the new wave of business...

  • Member since 2020
  • 5 items added with 8,145 views
  • Oct 14, 2020

Decarbonized steel, produced using green hydrogen, is taking steps towards commercialization. This week Vattenfall was granted €2 million by the Swedish Energy Agency to scale up testing of its Hybrit development, which will allow a comprehensive feasibility study around plant design, choice of technology and logistics across the steel value chain. This funding significantly bolsters the Hybrit project’s ambition to produce some of the world’s first carbon-free steel by 2024.

Hybrit is a collaboration between mining company LKAB, steelmakers SSAB and power company Vattenfall, with the objective of replacing coking coal with green hydrogen in the steelmaking process, making the full process completely fossil-fuel free by the middle of the decade, and pushing for commercialization by 2035. Operating in Scandinavia, the group’s stated objective is to reduce Sweden’s total CO2 emissions by 10% and Finland’s by 7%.

The venture currently has three projects underway: one for the production of fossil free iron ore pellets using biofuels in both Malmerget and Lulea in Sweden, one for hydrogen storage, and one for the use of hydrogen in the direct reduction of iron (DRI). With the injection of new funding, the group will now start testing up towards industrial scale, with plans to break ground in 2023 and to start operations in 2025, in a demonstration of full-scale production with a capacity of just over one million tons of iron a year.

Through the Hybit process, iron ore pellets are reduced by hydrogen gas in a direct reduction process (DRI). This occurs at a lower temperature than in a blast furnace, and produces an intermediate product, sponge iron, with water vapor as a primary waste product which may be used to recover hydrogen fuel through electrolysis. The sponge iron can be used either to produce hot briquetted iron to be shipped elsewhere or melted immediately in an electric arc furnace (EAF) together with scrap steel. If powered by renewable electricity, this has the potential to remove over 95% of steelmaking emissions.

The further benefit of this is that it is agnostic as to whether scrap steel or iron ore is used as the feedstock. As the global stock of steel increases, so does the potential for a circular economy. By 2050, reduced losses, contamination and downcycling will mean that the availability of steel scrap in Europe could account for three-quarters of demand.

The global steel industry is responsible for between 7% and 9% of global emissions. While demand has dropped 6.4% through a stunted 2019, urbanization in developing economies, largely in Asia, is driving an increase of around 1.4% per year. Without new technologies, global steel demand is set to rise from 1.6 billion tons today, to 2.0 billion tons by 2035 and up to 2.8 billion tones by 2050. While some of the emissions from growth in demand will be offset by a three-fold increase in steel recycling, new steel production will have to increase to meet this.


Steelmaking, however, is often dubbed as one of the hardest sectors to decarbonize. Reducing processed iron ore to produce steel in a blast oxygen furnace (BOF), which accounts for the 90% of steelmaking emissions (both CO and CO2), requires temperatures of around 1,200 degrees Celsius. Low carbon options to generate heat at this temperature are limited; electrification of heat can only really be used for low temperature applications, and once you get to around 400 degrees Celsius both cost and technical barriers start to arise, as circuit components need to handle higher operating temperatures.

So, the race to decarbonize is on, with pressure building to not only save the planet, but to save the future of the companies that have become entrenched in steel production using fossil fuels. Naturally, this is happening across the steelmaking industry, not just at Hybrit, and we’re seeing various approaches similar to those in other hard-to-decarbonize sectors.

The first, and arguably least effective, is an incremental approach using efficiency gains within the technology. Since 1960, these gains have amounted to reductions of 60% in the energy consumer per ton of crude steel production, although largely not in the emission-intensive blast oxygen furnace, so CO2 intensity has only fallen by around 15%. While these improvements are not to be sniffed at, they are largely economically driven, and will not represent the future of steelmaking. The reduction in energy intensity pretty much plateaued in the early noughties, and if we’ve learned anything from how Tesla has taken the automotive sector by storm, it is the revolutionary approach, not the evolutionary approach, that will transform industries through the energy transition.

This is the same argument that can be used in dispelling carbon capture or biofuels from the long-term future of steel. While it is estimated that BOF plus carbon capture and storage will be able to reduce the CO2 intensity of steel production by around 50%, this technology has had limited success so far. Some plants now have technology that has allowed it to capture and sell CO2 to nearby gas facilities, but the figure of 50,000 tons that some companies quote, only accounts for around 5% of total CO2 emissions. Hybrit explored CCS in its early days, but found that the best-case scenario entails just a 50% capture rate.

Similarly, biofuels are only replacing small amounts of coal in the BOFs where it is used, and an increase in its use for steelmaking may undermine the need for biofuel elsewhere, especially when considering the vast amount of land Europe would need to dedicate to it just for current biomass plans, which do not yet include steelmaking. Again, this is another concept that was explored by Hybrit, ended by the possible toll on Sweden’s forestry.

The largest alternative source of steel production is direct reduction (DRI), using natural gas as a fuel, which can also cut CO2 intensity in half. But there are two problems here again: emissions are still fairly high, so if demand doubles then the absolute emissions will remain the same; and the cost of natural gas is still high in most parts of the world where steelmaking is a booming industry. DRI only accounts for 5% of global production, despite being a mature technology.

Essentially, the problem with all the above is that they can never be truly net zero in terms of emissions, while hydrogen can. The rate of penetration is therefore dependent on the technical performance of the product as well as the price at which it enters the market.

The major change in the Hybrit production process is replacing the traditional iron-making process. The downstream steel product’s quality should remain unchanged.

In early stages, however, the cost of fossil-free steel will be higher. SSAB believes that this will not impact early development significantly, with several customers content with paying a premium for a carbon-free product in their supply chain, especially as corporate pledges to reach net zero emission start to ramp up.

Factors like the price of electricity, coking coal and carbon dioxide emissions are key to determining the timeframe in which carbon-free steel becomes competitive. Even at present, Hybrit indicates that it may not be far off. Based on current commodity prices, it indicates that its process is only 20% to 30% higher than its fossil fuel counterpart. Capital costs will decrease as an element of economies of scale comes into play, electricity prices will fall as the cost of renewables continues to plummet, and coal and gas prices will increase with carbon taxes. With carbon pricing in Europe expected to reach $100 per ton by 2030, this tipping point is likely to occur in the back end of this decade, during Hybrit’s demonstration phase, and far before it pushes for commercial plants in 2035. Early models suggest that this breakeven will occur at carbon pricing between €34 and €68 per ton and a cost of electricity of €40 per MWh.

The largest issues faced by the process are developing an effective process to use 100% green hydrogen in this timeframe, and using this hydrogen in an energy efficient way so that it’s economically viable against other hydrogen applications. At full production in Sweden, Hybrit would also use around 10% of Sweden’s current electricity supply, so its success also depends on a continued buildout of renewable energy sources in the country – although the 2035 timescale gives more than enough time for this to materialize.

Hybrit is one of the only ventures exploring a full decarbonization approach to steelmaking, making SSAB, LKAB and Vattenfall strong contenders to dominate the industry when the technology becomes cost competitive, allowing the companies to decimate their carbon footprint.


Other projects for very low and zero emission iron and steel include:

  • SALCOS, a collaboration between Salzgitter and the Fraunhofer Institute, aiming to directly replace 30% of natural gas with hydrogen in the DRI process.
  • Siderwin, an EU funded Uclos project ran by ArcelorMittal, using electrowinning to directly extract iron from its ore.
  • Boston Metal’s electrowinning process to develop a range of metals from their ore using molten oxide electrolysis.
  • Thyssenkrupp’s exploits to substitute hydrogen for coke in the process heat and reduction across a range of industrial processes.

The last of these is arguably one of Hybrit’s closest competitors. As part of the Course 50 initiative in Japan, Thyssenkrupp is already piloting its technology, and plans to demonstrate 50 full-scale plants, which also use CCS, in the 2030s. The company is currently exploring both CCS technologies and injected hydrogen into the BOF during production, while working on an incremental approach to developing steel plants similar to those being developed by Hybrit on a similar timeframe. It expects its first carbon neutral steel to be produced in 2022 at its Duisburg plant in Germany, having partnered with RWE back in June.

Other research is ongoing in pretty much all markets. In February for example, universities in Leeds and Sheffield secured £1.26 million to investigate ways of decarbonizing the UK’s steel industry.

But in industry, while all major European players are testing hydrogen-based approaches, Thyssenkrupp and the players involved in the Hybrit project are among few who have identified and acted upon the humiliation that the steel industry will face if it prevents nations from reaching net zero targets. These companies will be best placed to avoid consolidation through the energy transition, especially if innovative market entrants can form off the back of projects like Siderwin and gobble up market share.

Original article here: 


Matt Chester's picture
Matt Chester on Oct 14, 2020

One would have to assume the first to do this in Europe successfully will have some great first mover advantage-- are there 'Swedens' in other parts of the world looking to do the same for their corner of the globe? 

Bob Meinetz's picture
Bob Meinetz on Oct 15, 2020

"...the group’s stated objective is to reduce Sweden’s total CO2 emissions by 10%..."

Simon, there's no evidence any steel company would be willing to invest in a plant that's forced to shut down when the wind stops blowing. But even if such a mythical company sprang into existence, 10% by 2035 is too little, too late.

Matt Chester's picture
Matt Chester on Oct 15, 2020

there's no evidence any steel company would be willing to invest in a plant that's forced to shut down when the wind stops blowing

Plenty to scrutinize about such a plan, and they indeed need to show the goods that this is the real deal-- but the proposal appears to be about using hydrogen produced from renewable sources, not directly tied to instantaneous availability of power on the grid. Unless the concern is that this hydrogen is being made hour-by-hour to feed into the steel maker needs and a day of low renewable availability would cut short its resources (rather than the more logical creation of a surplus of the hydrogen fuel on an ongoing basis, not leaving its availability up to the whims of the wind on that particular day), then the issue of the plant shutting down when the wind isn't blowing won't be atop their concerns.

Surely there will be plenty of other logistical challenges to work out, but I'm not sure the steel plants would be checking the weather reports to determine whether or not they'll get hydrogen on a given day. 

Joe Deely's picture
Joe Deely on Oct 15, 2020

Exactly Matt... hydrogen can be generated using electricity from grid which is almost 100% Zero Carbon.  This "waiting" concept is non-sensical.

Perhaps Bob is not happy with Sweden because they are in the process of replacing a bunch of their nuclear generation with wind.

That said, the primary source of CO2 in Sweden - by far - is oil used in transportation.

Luckily - Sweden is moving towards EVs pretty rapidly.

The Swedish government’s Autumn budget will introduce tougher penalties for vehicle CO2 emissions which will give a further boost to sales of plugins. PHEVs however will see their purchase incentives reduced by an average of around 10,000 SEK (around 960€). These influences will obviously lead to BEVs increasing their market share.

Bob Meinetz's picture
Bob Meinetz on Oct 16, 2020

"This 'waiting' concept is non-sensical."

But you have no problem waiting for solar, do you? That's a laugh. U.S. solar has been "just around the corner" for sixty years. and has yet to crack 2% market share.

Just like the Swedes, who keep promising to replace "replace a bunch of their nuclear generation with wind", but keep changing their minds:

"Following the Three Mile Island accident, a referendum took place in 1980 to decide the future of nuclear energy in Sweden. The outcome of the referendum was to allow the construction of the planned reactors, and for nuclear energy to be phased out by 2010. In 2010, however, the Swedish parliament passed legislation allowing existing reactors to be replaced with new ones on existing sites. 

Following announcements that four reactors would close by 2020 due to declining profitability, representatives of E.On, Vattenfall and Fortum met with the energy minister in November 2015 and warned that the operating environment for energy production in Sweden was "troubling" and in the medium-term nuclear generation should not be taken for granted.

In mid-2016, as a corollary to repeal of the capacity tax, the government said it envisioned (but did not require) all the present operating nuclear reactors to be shut down by 2050. This would require significant dependence on imported power such as from Finland’s nuclear plants, and would deprive Norway of back-up for its hydro in dry years."

Here we are in 2020 - Sweden's nuclear mix is twice that of America's, and four times that of Swedish wind. But maybe by 20XX, or 20YY, or 20ZZ...?

No more time to waste.


Joe Deely's picture
Joe Deely on Oct 16, 2020

Its tough keeping up with change..

You said:

Just like the Swedes, who keep promising to replace "replace a bunch of their nuclear generation with wind", but keep changing their minds:

Here we are in 2020 - Sweden's nuclear mix is twice that of America's, and four times that of Swedish wind.

Both of these statement are wrong.

Sweden closed down Ringhals 2 reactor in 2019. Ringhals 1 will be closing at the end of 2020.

Vattenfall and Uniper have decided to also shut down the Ringhals 1 reactor at the end of 2020

Also, below is the acutal data thru Sep 2020 for rolling 12 months of Swedish electricity production.

Nuclear is only 2x wind in Sweden. Plus, nuclear will decline more next year after  Ringhals 1 retirement and wind will keep rising as multiple projects come online.  Do you see how that works?

The timing for wind passing nuclear in Sweden just depends on how quickly Sweden develops its offshore wind.

Iberdrola eyeing majority stakes in 9 GW of Swedish offshore wind

Note also that Sweden closed its last coal plant this year.

Sweden becomes the third European country to close its last coal power plant

Just days after Austria shut its last coal power plant, Sweden has followed suit with the closure of Stockholm Exergi AB’s Värtaverket plant, two years ahead of schedule.

Really the only "dirty fuel" on their grid is Biomass and a small amount of NG.  Thats also declining.

To top all of this off a massive battery plant is being built in Sweden.  Swedes will be able to use homemade batteries in their Volvos and for energy storage.

Bob Meinetz's picture
Bob Meinetz on Oct 16, 2020

As always, we end up back at these "magical batteries".

Do you have any idea how much batteries would cost to power your home for two days of cloudy weather - much less a steel plant?

Joe Deely's picture
Joe Deely on Oct 17, 2020

As always, we end up back at these "magical batteries".

Got it.. yet another red herring.

Sweden is moving away from nuclear and total nuclear generation is not 4x Wind. Facts matter. 

The hydrogen creation for this steel mill can easily be powered by the very clean Swedish grid which already exports 20 TWh of electricity per year and which will be adding at least 10 GW of wind over the next  10-15 years. 

Plus the 32GWh battery factory I mentioned will be powered by this clean grid. A small share of this annual production will go towards energy storage on the grid - making the grid even more flexible and lower carbon.

Sweden is moving steadily towards a zero carbon economy. It is doing this while closing down some of its nuclear generation. Facts. 


Joe Deely's picture
Joe Deely on Oct 15, 2020

Question - why am I no longer seeing "Most recent comments" for a group along right column?

Matt Chester's picture
Matt Chester on Oct 16, 2020

Thanks for pointing this out, Joe-- our team is looking into it!

Matt Chester's picture
Matt Chester on Oct 21, 2020

Quick follow up to this Joe-- you should see the most recent comments block returned to the page.

Thanks again for pointing this out!

Simon Thompson's picture
Thank Simon for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »