Sweden. H2 Green Steel Boden AB

Date of agreement:21 Dec 2023
Customer:H2 Green Steel Boden AB
Amount in EUR:EUR 57 million
Maturity:12 years


The loan has been provided for H2GS Boden AB for financing the building of the world’s first large-scale low carbon hydrogen-based greenfield steel manufacturing plant in Boden, northern Sweden. Powered by renewable electricity, the H2GS’s Boden green steel plant is estimated to be able to produce green hydrogen needed to bring 5 million tonnes of high-quality steel to the market annually by 2030. Production at the Boden plant is set to begin in 2025.

The hydrogen based direct reduction process combined with electrified downstream facilities will allow H2 Green Steel to produce green steel, reducing CO₂ emissions with up to 95 percent compared to traditional steelmaking. Instead of emitting large amounts of CO₂, as in traditional steelmaking processes, the primary emission will be water and heat. This is made possible by replacing coal in the production process with hydrogen, produced on-site with Europe’s largest electrolyzer, using electricity from renewable sources. The plant will also maximise circularity.

The project is eligible to be financed through NIB Environmental Bond proceeds.

Fulfilment of NIB's mandate

H2GS’s new Boden-based pure-hydrogen steel plant will utilize established technologies at a large scale, positioning it at the forefront of the green steel movement. Sweden and Finland’s leading research and development capabilities in this sector will be further enhanced by H2GH, as they adapt manufacturing to these new, large-scale processes and technology implementations.

The project supports the Swedish steel industry’s shift towards more sustainable methods, aiding in the transition into the post fossil fuel era.

The H2GS Boden AB project consist of a large scale Direct Reduced Iron (DRI) process with hydrogen as the reduction agent instead of the conventional use of natural gas. A large-scale electrolyser for the production of hydrogen will be installed.

The proposed first-of-a-kind innovative iron and steelmaking manufacturing route is considered to be breakthrough in terms of low carbon steelmaking and expected to reduce greenhouse (GHG) emissions significantly. The hydrogen based DRI process combined with electrified downstream facilities will abate around 90% or more of emissions associated with traditional coke-based primary steelmaking processes.
When implemented, the plant will be the first large-scale and very low carbon primary steelmaking plant in Europe and the world and hence entails extensive positive environmental externalities. The H2GS Boden project has potentially transformative industry nature of the project and large savings in avoided CO2 emissions by the innovative solution of using renewable energy based hydrogen in the reduction process of iron ore.
The project is eligible to be financed through NIB Environmental Bond proceeds.

The project is considered to be aligned with the EU Taxonomy.

Sustainability summary

A sustainability proofing has been carried out in accordance with the InvestEU Fund requirements, and a summary can be found here.

Press release

EIB and NIB to provide €371 million with InvestEU backing for H2 Green Steel’s large-scale production of steel with minimal carbon footprint

Press release

NIB finansierar världens första storskaliga gröna stålverk i Sverige