“French hydrogen investor Hy24 plans” to invest in “the world’s largest green steel plant despite soaring costs and delays,” reports Bloomberg News:
The venture faces a funding crunch and is seeking up to $1.1 billion to cover higher-than-expected project costs, and fill a gap left by delays to state grant support….The giant plant — which is about 60% complete and is being constructed just below the Arctic Circle — has been hailed as a bellwether for the steel industry’s fossil fuel-free transformation. The company has so far raised about $7.4 billion in a mix of equity, debt and [government] grants.
“There is no reason to question the project, whose fundamentals are very good,” Pierre-Etienne Franc, chief executive officer of Hy24, said. “Demand for green steel has risen since its launch.
Hy24 participated in a founding round announced in September 2023 when $1.7 billion of equity was raised together with other investors like Al Gore’s Just Climate.
Franc is keeping faith in Stegra despite similar projects around the world facing severe delays or cancellations. According to him, that means there’s a window for Stegra.
The Swedish firm’s billionaire founder Harald Mix has said he will also participate in the current funding round…“We need to find the financing rapidly to continue the project,” Franc said.
The World Economic Forum says that “green steel is the manufacturing of steel without the use of fossil fuels….producing green steel is an expensive process.” “Steel manufacturing produces more CO2 than any other heavy industry, comprising around 8% of total global emissions.” “So-called ‘green hydrogen’ is one solution that could help reduce the steel industry’s carbon footprint.”
“When burned, hydrogen emits only water. And if that hydrogen is produced via electrolysis using just water and renewable electricity, then it is completely free of CO₂ emissions,” according to Mitsubishi Heavy Industries Group (MHI). Hydrogen can also be low carbon if produced using fossil fuels and carbon capture, utilization and storage (CCUS) technologies, says MHI. This is known as ‘blue hydrogen.'”
However, green steel will be very expensive to produce. A management consultant notes that “At current market rates for green hydrogen, and current steel prices, using green hydrogen for direct reduction steel production is going to add 50–100% to the cost of making the steel, even if all capital costs are ignored.”
