The HYBRIT consortium led by Swedish state-owned utility Vattenfall has started operations at what it claims is the world’s first pilot plant dedicated to the production of fossil-free steel.

The plant inaugurated today in Luleå, northern Sweden, will at first produce sponge iron, which Vattenfall says is a decisive step forward toward fossil-free steel production using green hydrogen from renewable energy.

“We stand in front of the biggest technological leap in the steel industry in 1,000 years,” enthusiast Swedish Prime Minister Stefan Löfven said.

Löfven added that the project is part of his government’s effort to foster new technologies and press ahead in the energy transition, creating jobs to counter the economic slowdown caused by the Covid-19 pandemic.

"Today, you are laying the foundations that will enable the Swedish steel industry to be entirely fossil- and carbon dioxide-free in 20 years. Together we can rebuild Sweden as the world’s first fossil-free nation."

Vattenfall chief executive Magnus Hall said the joint project with iron mining company LKAB and steel manufacturer SSAB has the potential to open up a new global market and tap into growing renewable energy production.

Fossil-free electricity and its conversion to hydrogen are key components here.

"Our fossil-free electricity and its conversion to hydrogen are key components here, not just for the steel but also because the storage of hydrogen can balance an electricity system with more weather-dependent power generation and increased capacity challenges," Hall said.

"I am proud that everyone involved has made it possible to start up this plant today and I look forward to seeing fossil-free steel on the market."

In the actual steel production, HYBRIT plans to use electricity and green hydrogen (made using renewable power), with the overarching goal to reduce Sweden’s CO₂ emissions by 10%. The steel industry today generates 7% of the world's carbon emissions.

Fossil-free steel on market in 2026

SSAB chief executive Martin Lindqvist at the inauguration said the pilot plant is a milestone in the transition to fossil-free steel.

"We aim to be the first to market, in as early as 2026, with fossil-free steel. ... We have the chance to revolutionise the entire steel industry and show that net-zero emissions is possible. We must seize this chance," Lindqvist said.

At the plant in Luleå, HYBRIT will perform tests in several stages in the use of hydrogen in the direct reduction of iron ore. The hydrogen will be produced at the pilot plant by electrolysing water with fossil-free electricity. Tests will be carried out between 2020 and 2024, first using natural gas and then hydrogen to be able to compare production results.

Preparations are also under way to build a temporary hydrogen storage facility to store fossil-free hydrogen in caverns in nearby Svartöberget.

ThyssenKrupp’s green steel 'Made in Germany'

Sweden is not the only country working towards fossil-free steel.

Martina Merz, the chief executive of ThyssenKrupp, on Friday presented the steel maker’s concept for the construction of its first direct reduction plant with an integrated melting unit (dubbed blast furnace 2.0) to Germany’s economics and energy minister Peter Altmaier and the state premier of North Rhine-Westphalia, Armin Laschet.

ThyssenKrupp says it will operate the blast furnace in Duisburg that produces “electrical hot metal” with green hydrogen and green electricity in the future.

The company has a target to reduce its CO₂ emissions by 30% by 2030, and by 2025 plans to complete the main part of the plant and produce 400,000 tonnes of green steel.

UPDATES with details and quotes from the companies involved

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'Biggest technological leap in steel industry in 1,000 years': Swedish PM