Swedish green steel startup H2 Green Steel (H2GS) announced today the successful close of Series A equity financing, raising $105 million from a consortium of financial and strategic investors.

Steelmaking is one of the biggest emitters of CO2 globally, with total greenhouse gas emissions (GHG) from the sector accounting for 7% – 9% of direct emissions from the global use of fossil fuels. As manufacturers globally aim to decarbonize their supply chains, demand for fossil-free steel is expected to increase significantly.

Several initiatives are emerging to address steel’s climate impact, including the Climate Group’s recently launched SteelZero, and the HYBRIT initiative established in 2017 between SSAB, Vattenfall and LKAB, along with startups like H2GS.

Founded in 2020, H2GS aims to build the world’s first large-scale fossil-free steel plant. Earlier this year, the company announced plans to build a greenfield steel plant in northern Sweden, with the project including a giga-scale green hydrogen plant as an integrated part of the steel production facility. Using electricity from 100% renewable sources for the energy requirements generated in the manufacturing process, H2GS aims to produce 5 million tons of fossil-free steel by 2030.

Investors in the financing included private equity fund included private equity funds, impact investors and manufacturers, including Altor Fund V, Ane & Robert Maersk Uggla, BILSTEIN GROUP, EIT InnoEnergy, Exor, FAM, IMAS Foundation, Kingspan, Marcegaglia, Mercedes-Benz AG, Scania, SMS Group, Stena Metall Finans, Cristina Stenbeck, Daniel Ek, and Vargas. Investors including Mercedes-Benz and Scania have already unveiled plans to source green steel from H2GS.

Henrik Henriksson, CEO, H2 Green Steel, said:

“We’ve seen a tremendous interest, both from the industry, future customers and long-term investors, in our mission to bring down co2-emissions to zero in the steel industry. Investors all over Europe understand that the climate crisis is the biggest challenge of our time and that a transformation of the industry is necessary. Our closing of the Series A is an important milestone that gives us continued momentum for the journey ahead.”