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Scania CEO Henrik Henriksson is leaving the truck giant to run a new fossil-free steel company.
The founders and investors are behind the project behind the Northvolt battery company, and after investments of SEK 25 billion, H2 Green Steel will reach a production capacity of 5 million tons.
Mary Phillips
Investment company Vargas challenges SSAB with plans for a large-scale facility for fossil-free steel production in the area around Boden and Luleå in northern Sweden. The goal is to reach an annual large-scale production of 5 million tonnes of “green” steel by 2030.
For reference produces the steel company SSAB 8.8 million tonnes globally, of which 3.8 million tonnes in Swedish operations at the Luleå and Oxelösund production facilities.
On Monday, it became clear that Scania CEO Henrik Henriksson will be the new CEO of the company running the project, the newly opened H2 Green Steel.
In a first phase, SEK 25 billion will be invested and production will start in 2024.
“The production of traditional steel mills is based on gradual investments over 100 years. We have taken a white paper and redefined what steel production should look like to optimize efficiency and keep costs low, “says Harald Mix, president of Vargas Holding, CEO of Altor Equity Partners and a member of the board of H2 Green Steel.
The company will own The entire processing process with iron ore granules as the initial input and a gradual transition to iron fungi without carbon dioxide. The company expects that about half of the input goods will consist of iron mushrooms by 2030 and the plans are related to the strategy of the state-owned mining company LKAB to switch to carbon dioxide-free production during an investment period until 2045. .
“Tesla proved they can produce electric cars and it boosted the market. Once there, there is no going back. Customers will not return to fossil-based inputs. There is a force in being first out and accelerating, which is difficult for existing players, “says H2 Green Steel chairman Carl-Erik Lagercrantz, also CEO of Vargas Holding and chairman of the board of Northvolt.
H2 Green Steel enters an industry where SSAB is one of the leading steel companies to switch to fossil-free production. SSAB’s plan is to start selling the first “green” steel in 2026, just four years before H2 Green Steel intends to go into full-scale production.
For several years, SSAB has led the Hybrit joint venture together with LKAB and Vattenfall to develop solutions for industrializing the steel production process using hydrogen. H2 Green Steel will use the same technology.
“Hybrit is a great source of inspiration. We are happy to see a close technical collaboration and we assume that we can work together with existing suppliers, ”says Harald Mix.
The business model take a look at the Northvolt battery company, co-founded and financed by Vargas, where the project has been developed in close collaboration with future customers and suppliers. With H2 Green Steel, the company is primarily targeting large sheet metal vehicle manufacturers.
The first round of funding of SEK 500 million, which the company is closing now, includes Cristina Stenbeck and Spotify founder Daniel Ek, investment firm Altor and the IMAS Foundation.
Henrik Henriksson will be joined to the company’s management team by Maria Persson-Gulda, who will be the new technical director. Other management personnel are being hired. In addition, the project is expected to create around 1,500 jobs.
