Green Forum • 27 June, 2024 at 10:00 AM
The European Commission has given the green light, under EU State aid rules, to a €265 million Swedish measure, partly funded through the Recovery and Resilience Facility (RRF), to support H2GS AB in establishing a large-scale green steel plant.
This initiative aligns with the EU Hydrogen Strategy, the European Green Deal, and the Green Deal Industrial Plan objectives, aiming to reduce dependence on Russian fossil fuels and accelerate the green transition outlined in the REPowerEU Plan.
Key points of the Swedish measure include:
The funding, part of Sweden's Recovery and Resilience Plan, will aid H2GS AB in developing a green steel plant in Boden, Sweden.
The project includes setting up one of the world's largest electrolyzers (690-megawatt capacity), a direct reduction plant using renewable hydrogen, two electric arc furnaces, and cold rolling and finishing facilities.
Operations are slated to commence in 2026, targeting an annual production capacity of 2.4 million tonnes of green steel, significantly reducing greenhouse gas emissions compared to traditional steel production methods.
The aid, provided as a direct grant, supports a total project investment of €6 billion, primarily financed by private sector investments, complemented by support from the EU Innovation Fund and financing from the European Investment Bank.
The Commission's assessment under EU State aid rules concluded that the measure supports economic activity aligned with low-carbon processes, while effectively promoting EU policy goals without unduly distorting competition. It includes safeguards such as a claw-back mechanism and knowledge-sharing commitments to mitigate potential market distortions and enhance industry-wide benefits.
Based on these findings, the Commission approved the Swedish measure, highlighting its positive impact on advancing sustainable steel production within the EU.