H2 Green Steel administrators also look forward to gaining benefits from access to the St. Lawrence River for shipments and the iron ore reserves of the region
Sweden’s H2 Green Steel plans to explore and is in talks with the Canadian government to build a factory in Northern Quebec, as the company aims to deliver steel produced with the least carbon emissions. The first plant in Boden will begin its production by late 2025. H2 Green Steel is a Stockholm-based company that was launched in 2021 by Vargas Holding AB.
Vargas has also launched Northvolt AB which recently mentioned their plans to set up a $5.1 billion EV battery plant near Montreal. The possible green steel project in Quebec would be located in the northeast of Montreal. The plant would require an investment between € 3 billion and € 6 billion.
The project seeks to boost employment opportunities in the region as the full steel mill would require nearly 20,000 workers. One of the plans will include H2 Green Steel building a green iron plant and a massive electrolyzer powered by renewable energy that would provide the site with hydrogen instead of using carbon-intensive coal. The iron will then be exported.
The firm will require almost 700 megawatts of energy, which is about 1.5% of Quebec’s actual capacity. High demand can create power shortages, especially during winter and government agencies have become more selective about projects when demand increases for low-cost clean power. H2 Green Steel administrators also look forward to gaining benefits from access to the St. Lawrence River for shipments and the iron ore reserves of the region.
According to the data released by the International Energy Agency, steel production accounts for nearly 8% of total energy system emissions. H2 Green Steel is working on wind and solar development opportunities in Texas. Portugal and Brazil are also on the company’s list for its future major projects partnering with Iberdrola SA and Vale SA.
H2 Green Steel’s management did not provide much information regarding the financial support they are getting from the Canadian government and stated that it will be measured with other states. By 2026, the company expects to begin the construction of a North American site with production beginning four years later. Officials mention that it will take almost 18 months of permitting but public support for major projects like this could be varied in Quebec.
However, the Canadian government has been prepared to make billion in subsidy promises to invite industrial ventures that promises lower emission. Officials from the Quebec government stated at Northvolt’s announcement in September that the province has obtained $11 billion in investments related to the electric car industry over the previous three years. The figure is expected to quadruple soon.
Pierre Fitzgibbon (Minister of Business and Energy for Quebec) is interested in a project involving green steel. The ministry has not conducted an analysis of the specific project from H2 Green Steel. “We understand the importance of developing decarbonization technologies in the steel sector”, stated the spokesperson Mathieu Saint-Amand. Canadian Industry Minister Francois-Philippe Champagne’s spokesperson Laurie Bouchard stated that the Swedish company’s interest speaks for the country’s efforts and promises of a greener future.
The company has already acquired €6 billion for the building of the Boden facility: €1.8 billion in equity and €4.2 billion in debt. In October, according to Henriksson, the company will complete a minor investment round. The North American project or Boden’s expansion will be involved in the next significant round, which is expected to be around €1.5 billion, he said.
The previous CEO of Swedish truck maker Scania CV, Henriksson, predicted that his firm would always be seeking capital. “I think a better time to do an IPO would be after 2026 when we’re up and running and have positive cash flow.”