(Bloomberg) -- Sweden’s H2 Green Steel took a vital step toward building its first facility in the north of the country after receiving the go-ahead from a local court.
The main permit was for construction of the plant, the Land and Environmental Court in Umea said in a statement on Friday. It also granted approval for rerouting a stream, while stipulating that the company must take measures to protect local people and the environment.
The Stockholm-based firm is one of a new breed of steelmaker seeking to overhaul the way the alloy is manufactured as global industries move toward a low-carbon future. The industry, which has relied largely on the same production techniques for more than a century, accounts for about 7% of the world’s carbon emissions.
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The company plans to start production by 2024-2025, with annual capacity expected to hit 5 million tons by 2030. Construction can start immediately, the court said.
“This means that we can start to prepare the site for building work this summer,” the company said in a statement following the ruling. “Europe hasn’t built any steel plants since the 1970s and we’re showing that you can push through fast, which means that Sweden can continue to drive the development of sustainable industries forward.”
H2GS is looking to raise about 4 billion euros ($4.2 billion) to finance the plant in Boden, just south of the Arctic Circle. It has so far secured about $105 million, Chairman Carl-Erik Lagercrantz said in an interview last week. Early backers include Spotify Technology SA co-founder Daniel Ek.
“We will continuously bring in more money. It’s a large scale investment,” he said.
Chief Executive Officer Henrik Henriksson said in an interview in May that he aims to close financing for the plant by the end of the year.
The company has secured power supplies from Norway’s Statkraft SF, starting in 2026.
Other firms have joined the race to produce emission-free steel, notably SSAB AB and ArcelorMittal SA, which plans to open its own zero-carbon plant by 2025.
(Updates with details from court ruling starting in second paragraph.)
©2022 Bloomberg L.P.
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