HYBRIT receives $302m grant to build fossil-free sponge iron plant

The funds, supplied by Industrial Leap (Industriklivet)–the Swedish Energy Agency’s programme–will be used toward the establishment of a demonstration plant in Gällivare, Sweden, for the production of fossil-free sponge iron on an industrial scale.

LKAB is responsible for the construction of the planned plant and will be the main recipient of the support.

Jan Moström, president and CEO of LKAB, said: “The processing and production of fossil-free sponge iron is central to the climate and to Swedish competitiveness. We are pleased with the announcement that the state is participating and sharing the initial risk in this crucial step to industrialise the HYBRIT technology. In order to counter climate change, we need to move forward quickly, and to keep up the pace, it is important that we get all the prerequisites in place for future investment decisions.”

The demonstration project is one of 35 projects from 12 EU countries that are part of the Hy2Use IPCEI integrated project. IPCEI stands for Important Projects of Common European Interest and enables EU Member States to provide government support to priority initiatives with a strategic common European interest.

Robert Andrén, director general of the Swedish Energy Agency, said: “The future competitiveness of Swedish industry lies largely in becoming fully fossil-free. Therefore, the investments made in Industriklivet are of great importance, not only for the sake of the climate and the environment, but also for the supply of skills and employment in both new and old industrial locations in our country. The decision we are now taking is the largest financial decision made so far in this work and it is an important one.”

The plan for the demonstration plant is to produce over 1.3 Mt/yr of sponge iron, volumes intended for SSAB’s transition. With sponge iron produced with hydrogen instead of coal, carbon dioxide emissions in the steel industry can be largely eliminated by replacing coal-fired blast furnaces with electric arc furnaces, the initiative says.

Martin Pei, EVP and CTO, SSAB, said: “We welcome the decision as an important signal of the potential of the green transition for Swedish competitiveness. We have started the transition of SSAB’s steel production in the Nordic region, which will reduce carbon dioxide emissions in Sweden and Finland by 10 and 7% respectively in around 2030. The HYBRIT technology has made us global pioneers in fossil-free steel production and we look forward to scaling up our pilot deliveries of fossil-free steel to commercial levels. [This] announcement is therefore important for our strategy going forward.”