Emission credits from fossil-free steel in 2026

The following article is based on a recent SSAB webinar, which you can watch on demand. If you would like additional background information about how and why SSAB will use a new hydrogen based technology to make fossil-free steel, check out this webinar.

First, give us a quick update on the HYBRIT Development — the project that will be making fossil-free steel possible.

Thomas Hörnfeldt: Well, our small, industrial pilot has been operating since September 2020, when it was started up by the Swedish Prime Minister. I say “small” but it’s actually 50 meters high.

And we’ve just announced that we’ll be building the world’s first production plant for fossil-free sponge iron in Gällivare, Sweden. That plant will start up in 2025-2026 and have an initial capacity, in 2026, of 1.3 million tonnes. So, we’re on schedule to meet our goal of offering commercial fossil-free steel for all of our product groups in 2026.

Thomas Hörnfeldt, VP Sustainable Business, SSAB and Jonas Larsson, Director Environmental Affairs, SSAB.

Speaking of “firsts,” tell us about SSAB’s Science Based Targets

Jonas Larsson: SSAB’s climate objectives have been approved by the Science Based Targets initiative (SBTi), which means our objectives are in line with the latest climate science and the Paris Agreement.

As far as we know, SSAB is the first SBTi approval for iron ore-based steel — so we’re really proud of this recognition. Our targets, which include our direct emissions as well as indirect emissions from purchased energy, will be for 35% reduced emissions for 2032, using 2018 as our base year.

And we now have EPDs for all of our product groups?

Jonas Larsson: Yes, SSAB customers have been requesting Environmental Product Declarations or EPDs — and now they can download five declarations for our flat steels and additional declarations for our tubular steels at SSAB.com or from the International EPD^® System, environdec.com.

Some SSAB steel products are made both in Sweden and Finland: are the EPDs different for different plants?

Jonas Larsson: No, we used weighted averages from all of our plants. So for each steel product you will find the information you need for lifecycle assessments on one, single EPD, regardless of whether that steel is coming from a Swedish or a Finnish SSAB mill. This makes sense, since many products are made in more than one location.

What did SSAB learn from the EPD process?

Jonas Larsson: Because the EPDs are internationally comparable, we could update our benchmarks for CO₂ efficiency, comparing ourselves to iron and steelmakers worldwide. What we found was that the global average for CO₂ emissions 10% to 20% higher than SSAB production. And that SSAB still shows the best value for every product group: hot rolled, cold rolled, and metal coated steels.

How can automakers use the new Docol EPDs in their cars’ lifecycle assessments?

Jonas Larsson: The so-called “Scope 3 Upstream” part of an automaker's LCA covers their raw materials — in this case, Docol advanced high strength steel. Of course, whenever possible, SSAB asks our automotive customers to consider using Docol cold-forming steel grades — instead of hot-formed steels — to reduce their Scope 2 (Energy) and Scope 1 (Production) footprints. And we also ask that they consider additional upgrades to their designs for wider use of higher strength steels for “lightweighting” their vehicles, which reduces the energy use and emissions when driving, known in the car's LCA as “Scope 3 Downstream.”

But the car’s end-of-life is included in Docol EPDs, yes?

Jonas Larsson: Yes! For the car components made from our steel. As you know, one of steel’s very unique abilities as a car material is to be recycled an infinite number of times without losing its properties. Steel's recyclability generates a credit in our EPDs.

Explain the CO₂ emission values listed in one of our EPDs.

Jonas Larsson: Sure. This EPD is for our hot rolled steel steels and coils:

The column labeled “A1-A3” lists the kg CO₂ equivalent — in our case, 2.16 tonnes CO₂for each tonne of steel delivered to, say, an automaker. Column D represents the credit value for the steel being recycled at the car’s end-of-life: it’s minus 1.48 tonnes CO₂. So, as a consequence, 2.16 - 1.48 = 0.68 tonnes of CO₂ for each tonne of steel — that’s comparable to scrap-based steel production.

Thomas Hörnfeldt: Think about that: The world now recycles 85% to 90% of all steel — but that currently meets only 25% of our needs for new steel products. The rest has to come from iron ore. And SSAB’s current iron ore-based steel production, per our EPDs, is comparable to using recycled scrap steel for your product.

Impressive, but what will happen to the EPD values when you supply fossil-free steel?

Jonas Larsson: In 2026, when SSAB starts selling fossil-free steel, the value in the A1-A3 column will be much lower, but the recycling value of -1.48 will stay the same. So we will show a value that is much lower than anything available today. Exactly what that value will be we’ll know when each one of our fossil-free steel products has its own EPD in 2026.

Thomas Hörnfeldt: So, for example, if your electric vehicle has materials that cannot reach zero emissions in their lifecycle assessment — I’m thinking about battery packs, but it could be any hard-to-abate material — then you could at least partly compensate for that by using fossil-free steel.

Will all types of SSAB products be available as fossil-free steels in 2026?

Yes.

Will there be a specific certificate for fossil-free steels?

Yes. Fossil-free steels will have their own environmental product declarations.

Will the properties of fossil-free steels be different from traditional steels?

No. The H₂ direct reduction ironmaking process produces “sponge iron,” which is fed into an EAF. All of the subsequent steelmaking processes, which produce a specific steel grade’s properties, will be the same as today. The only difference will be that SSAB will run those steelmaking processes using fossil-free fuels and fossil-free electricity.

Is the recycling of fossil-free steel different than traditional steel?

The recycling process is the same. However, fossil-free steel will — for the first time ever — increase the amount of steel scrap available, worldwide, without causing significant CO₂ emissions. That is a big difference.

How is the CO₂ footprint certified for the upstream products you use?

We have a third-party verifier go through the materials and confirm the material databases we have used. That’s all part of the EPD verification process and all of the steps are transparent to everyone.

With the hydrogen direct reduction process, is SSAB concerned about hydrogen embrittlement?

We asked that question, too. But the answer is “no.” In the ironmaking process, the hydrogen (H₂) will combine with the oxygen (O) in the iron oxide, forming H₂O (water) as a byproduct. Any remaining hydrogen will disappear very quickly, if not before, then most certainly in the electric arc furnace.