This story by MIT Environmental Solutions Journalism Fellow Reid Frazier was originally published in the Allegheny Front, where it appears with additional photos and resources.
Steel is a modern necessity – a critical component of everything from appliances and cars to buildings and bridges. But making it is a huge climate problem. Steel production generates vast amounts of carbon pollution, owing to its heavy use of coal. It’s estimated to account for as much as 10% of global emissions of carbon dioxide, the key driver of global warming.
Now, a new process to make steel with almost no carbon emissions is starting to catch on in Sweden. About 60 miles south of the Arctic Circle, the Swedish company Stegra, founded in 2020 under the name H2 Green Steel, is building the world’s first commercial-scale “fossil-free” steel mill on a 660-acre site near the town of Boden. Projects from other companies are also in the works.
Instead of using coal to make steel, Stegra will use hydrogen, a common industrial gas. This way, the biggest byproduct is water, not CO2.
“In a very concrete way, we are physically going to remove CO2 emissions by providing better steel,” said Anne Graf, a company spokeswoman.
When it’s completed in 2026, the plant will produce 2.5 million tons of steel a year – enough to build 40 Empire State Buildings.
“It will become cars, trucks, construction materials. It will become dishwashers and fridges and freezers,” Graf said. “Steel is all around us in our everyday [life]. Once you start thinking about how much steel you see or use in a day, you’ll be surprised.”
Steel’s dirty carbon impact
The way most steel is made now comes with a heavy climate price.
That’s because most steelmakers have been using the same basic recipe for hundreds of years, says Chris Pistorius, a materials scientist and co-director of Carnegie Mellon University’s Center for Iron and Steelmaking Research.
All steel starts with iron ore, a mineral-rich deposit mined around the world. Most steelmakers then heat the iron ore in a blast furnace with refined coal, known as coke. The carbon from the coal reacts with oxygen in the iron ore to produce a purer form of iron, which is then made into steel. But it also creates an unwanted byproduct: carbon dioxide.
“All of that carbon turns into CO2 somewhere in the process,” Pistorius said. And that CO2 is then released into the atmosphere, where it will trap heat for hundreds of years, contributing to global warming.
That’s why steel is such a big problem when it comes to climate change. It contributes up to 10 percent of all carbon dioxide emissions, according to the International Energy Agency.
Stegra’s new plant aims to eliminate nearly all carbon emissions by replacing coal in the process with hydrogen.
Sweden becomes a center for hydrogen-based steel
Scientists have known hydrogen could be used to make steel for decades. But it’s hard to work with and more expensive than coal, in part because it requires large amounts of energy to produce and special equipment to store and distribute. Steel made with hydrogen currently costs about 25 percent more expensive than traditional, coal-based steel.
Plus, most hydrogen today is extracted from fossil fuels in a process that creates a carbon pollution problem of its own.
Stegra will produce its hydrogen from water, using renewable energy, significantly cutting its CO2 footprint.
“What you’re doing is essentially replacing a coal mine with a facility that uses electricity and water,” Graf said.
That’s easier to do here in part because of Sweden’s distinct energy mix. Sweden’s electric grid is almost entirely carbon-free. The country relies mostly on hydroelectric and nuclear plants–not fossil fuels.
Other steel companies in Sweden are also starting to work with hydrogen. In nearby Luleå, HYBRIT, a consortium of Swedish industrial companies, completed a pilot project for hydrogen-based steel in 2020. The group is planning full-scale production of fossil-free steel by 2026.
The steelmaker Ovako recently switched to hydrogen from natural gas for part of its operations. It recently completed the conversion of some of its furnaces, which heat steel before it is rolled and shaped into industrial products.
Mikael Persson, the project manager, said it took his team four years to install equipment to make hydrogen at one of Ovako’s mills in Central Sweden.
“It was very hard,” Persson said, laughing. “We’ve never done this….We went into it … blindfolded.”
At Ovako’s plant in Hofors, Sweden, Persson showed off the plant’s electrolyzer, the machines that turn water into hydrogen using electricity.
Inside a large white room are eight cylindrical tanks resembling huge double-A batteries laid on their side. An electric current courses through each tank, separating water molecules into oxygen and hydrogen.
“The current is really, really, really high,” Persson says.
This process requires a huge amount of energy. Ovako’s plant uses 20 megawatts of electricity at full capacity– enough to power 10,000 homes in the U.S.
Because Ovako is drawing on a mostly carbon-free grid, the electrolyzers have virtually no climate impact.
Sweden’s clean grid has made it an attractive place for companies experimenting with hydrogen in steelmaking and other industries.
Boosted by a carbon tax
But what’s really driving this investment in green steel now is money, says Max Åhman, a professor at Lund University in Sweden.
In Europe, making steel the old-fashioned way is about to get much more expensive.
“The EU system for putting a price on carbon has actually started to work,” Åhman said.
The European Union has a carbon trading system that taxes companies for emitting greenhouse gases. It’s set to impose a larger penalty on traditional steelmakers in the next decade.
“With that price on CO2,” Åhman said, “green steel from hydrogen is more or less competitive.”
Car makers like Volvo and BMW have lined up to buy green steel in Sweden to meet their own climate goals of reducing net carbon emissions to zero in the next few decades.
And dozens of similar projects are in the works around the world.
Lars Nilsson, professor of Environmental and Energy Systems at Lund University, says this outcome seemed a longshot a decade ago. That’s when he started working on the HYBRIT project.
“I remember other big steel companies sort of laughing about it. You know, ‘This is just fairy tales.’ But I think it’s quite real,” Nilsson said. “You can discuss technology readiness, but it’s not a giant technological leap.”
Nilsson says Sweden is proving that green steel is possible. But to make it work elsewhere, the industry needs lots of affordable clean energy. And policies like a carbon tax that will help it compete with traditional steel.
“If you do have decent carbon pricing, as we have in Europe with the emissions trading scheme, and if you have access to low-cost electricity, it’s actually a good business.”
