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H2 Green Steel has raised €1.5bn in equity funding from investors to finance the construction and development a trailblazing large-scale green steel plant in Sweden.
The funding round, which was co-led by clean hydrogen infrastructure fund Hy24, will also fund the development of Europe’s largest electrolyser, which aims to provide H2 Green Steel with the clean hydrogen it needs to replace coal in its steelmaking process.
H2 Green Steel is hoping the plant will be able to start operations by the end of 2025, producing steel with 95 per cent lower carbon emissions compared to steel produced with traditional blast furnace technology.
H2 Green Steel Altor, GIC, and Just Climate – all of whom are existing investors in H2 Green Steel – participated in the fund raise, alongside new investors Andra AP-fonden and Temasek.
The firms join AMF, Cristina Stenbeck, Hitachi Energy, IMAS Foundation, Kinnevik, Schaefller, Vargas and Wallenberg Investments holding company FAM as equity investors in the green steel start-up.
Henrik Henriksson, CEO of H2 Green Steel, hailed the “impressive” calibre of investors backing his firm.
“Some of the most professional institutions, investors and industrial companies globally are part of this round and we are proud that they all share our commitment to sustainability as their true north,” he said. “€1.5bn is the largest private placement in Europe this year and the appetite to invest in us proves both our solid business case and the market demand for green steel.”
Since launching in 2021, H2 Green Steel has raised more than €1.8bn of equity across three financing rounds and has secured more than €3.5bn in debt finance, according to the latest update.
Otto Gernandt, CFO of H2 Green Steel, said the cash injection marked “the start of industrial scale decarbonisation of basic materials production”.
“The sector will require substantial investments over the coming decades to enable our customers to produce green end products and, thereby, meet their climate targets,” he said. “We hope this financing will contribute towards accelerating the much needed, broad participation of capital markets in the transformation of hard-to-abate industries”.
The fund raise comes just a day after US clean steel start-up Boston Metal announced it has closed its Series C funding round after raising $262m from existing and new investors.
The company said the funds would help it bring its molten oxide electrolysis production process to market, grow its team, and accelerate the deployment of its “high-value” metals business.
It claims to be on track to ship its first metals to customers in 2024 and expects to bring its molten oxide electrolysis process to the steel market by 2026.
New investors in the firm include the venture capital arm of oil and gas company Aramco, global investment manager M&G Investments, natural resource investment firm Goehring & Rozencwajg, and investment management firm Baillie Gifford.
“Boston Metal’s success in raising capital from diverse sources spanning private equity, venture capital, institutional investors and strategic investors demonstrates robust confidence in Boston Metal’s ability to transform steel and metals production for a sustainable future,” said Tadeu Carneiro, chairman and CEO at Boston Metal. “Our high-value metals business is nearing commercialization at our subsidiary in Brazil, with our manufacturing facility opening this fall, and we continue to make significant progress on the scale-up of molten oxide electrolysis for green steel production at our pilot plant outside of Boston.”
Existing investor Breakthrough Energy Ventures – the climate technology fund founded by Bill Gates – also joined the Series C funding round, alongside several other prior investors including Microsoft’s Climate Innovation Fund, BHP Ventures, and Prelude Ventures.
“Boston Metal has made remarkable progress on the maturation of its molten oxide electrolysis technology and business model, which has the potential to decarbonise steelmaking at scale while delivering significant value and sustainability benefits for the metals industry,” said Carmichael Roberts, co-lead of the investment committee at Breakthrough Energy Ventures. “We’re proud to continue our investment in the company, as it’s an example of the high-impact technology we seek to support solving the world’s most pressing climate problems.”
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