SSAB will cut its CO2 emissions in Sweden by 25% by as early as 2025, through the conversion of the blast furnaces in Oxelösund, Sweden, to an electric arc furnace. Between 2030-2040, the plan is to convert the blast furnaces in Luleå, Sweden and Raahe, Finland to eliminate most of the remaining CO2 emissions.
The company anticipates that our Iowa operations will be powered by renewable energy by 2022. Our Americas operations will also be able to offer fossil-free steel products starting in 2026, utilizing the sponge iron developed using HYBRIT technology and produced in Sweden. At the same time, SSAB has started the process of phasing out fossil fuels used in rolling mills and heat treatment plants throughout the company, to reach the goal of becoming fossil-free by 2045.
A pre-feasibility study, conducted in 2016-2017, concluded that fossil-free steel, given today’s price of electricity, coal and cost of CO2 emissions, would be 20-30% more expensive. With declining prices in electricity from fossil-free sources and increasing costs of CO2 emissions through the European Union Emissions Trading System (ETS), the pre-feasibility study also concluded that fossil-free steel will, in the future, be able to compete in the market with traditional steel.
In the summer of 2018, work started on the construction of a globally-unique pilot plant for fossil-free steel production at the SSAB site in Luleå, Sweden. In the HYBRIT pilot plant, we will produce hydrogen by electrolyzing water and then use the hydrogen to test the direct reduction of iron ore to make direct reduced iron (DRI), also called sponge iron. The DRI is then used as virgin material together with recycled scrap for steelmaking. The pilot plant will be ready in 2020.
In the summer of 2019, construction also started on a plant for fossil-free pellets at the LKAB site in Malmberget, Sweden. Here, fossil fuels will be replaced with biofuel to achieve fossil-free production of iron ore pellets.
A decision has also been made to build a pilot hydrogen storage facility, 25-35 meters below the ground, on LKAB's land at Svartöberget, close to the HYBRIT pilot plant currently under construction on SSAB's site in Luleå. The pilot storage facility is expected to operate from 2022 to 2024.
The total cost committed of the initiative during the pilot phase is estimated to be SEK 2 billion. The Swedish Energy Agency has commited to contribute SEK 599 million and the three owners, SSAB, LKAB and Vattenfall, will contribute the remaining costs in equal shares.
Recently, the owners behind the HYBRIT initiative announced that they will start efforts to prepare for the demonstration phase, three years before plan. The new plan is to have a HYBRIT demonstration plant in place in 2025, at the same time as the conversion of SSAB’s blast furnace site in Oxelösund in Sweden, which will enable SSAB to produce iron ore-based, fossil-free steel for commercial use in 2026. There is a growing interest from customers to lower the CO2 footprint in their value chain, which opens up great potential for fossil-free steel as a premium product.
SSAB, using HYBRIT technology, which endeavors to revolutionize steelmaking, aims to replace coking coal, traditionally needed for ore-based steelmaking, with fossil-free electricity and hydrogen. SSAB has now also joined the European Clean Hydrogen Alliance.
Today, SSAB, LKAB and Vattenfall are taking a decisive step toward fossil-free steelmaking with the start-up of HYBRIT’s globally unique pilot plant for the production of fossil-free sponge iron. Swedish Prime Minister Stefan Löfven started up the plant together with Isabella Lövin, Minister for Environment and Climate and Deputy Prime Minister, Martin Lindqvist, President and CEO of SSAB, Jan Moström, President and CEO of LKAB and Magnus Hall, President and CEO of Vattenfall. SSAB, LKAB and Vattenfall aim to create a complete value chain for fossil-free steel.
SSAB, LKAB and Vattenfall will be starting the test operation of HYBRIT’s globally unique pilot plant for the production of fossil-free sponge iron, a decisive step toward fossil-free steel production, on Monday, August 31 in Luleå. This plant represents an important step in the creation of a totally fossil-free value chain for steelmaking. Swedish Prime Minister Stefan Löfven, and Minister of Environment and Climate and Deputy Prime Minister Isabella Lövin are attending the opening.