Decarbonized steel startup H2 Green Steel announced today that it has raised an additional €70 million ($USD69 million) in its series B funding round, bringing the total raised in the round, initially announced in August, to €260 million. Proceeds from the financing will primarily be used to build a 5 million-ton green steel plant in Boden, Sweden.

New investors in the round included Swedish investment company Kinnevik and a climate-focused institutional investment fund, alongside existing investors Hitachi Energy and Kobe Steel, who also participated.

Kinnevik CEO Georgi Ganev, said:

“H2 Green Steel, with its ambition to decarbonize large industries starting with steel, is a great example of a company with a strong commercial plan and the ability to move the needle in reaching global net zero, and we are excited to be part of their journey.”

Founded in 2020, H2 Green Steel is building the world’s first large-scale fossil-free steel plant, with the project including a giga-scale green hydrogen plant as an integrated part of the steel production facility. The company employs hydrogen produced using green power to remove the oxygen from iron oxide, avoiding 95% of the CO2 emissions normally produced. 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.

Demand for fossil-free steel is expected to increase significantly, As manufacturers globally aim to decarbonize their supply chains. Steelmaking is one of the biggest emitters of CO2 globally, and one of the more challenging sectors to abate, with total greenhouse gas emissions (GHG) from the sector accounting for 7% – 9% of direct emissions from the global use of fossil fuels. The use of green hydrogen to fuel the production process is seen as one of the key potential solutions to help decarbonize the sector.

H2 Green Steel stated that it has already pre-sold about 60% of its initial volumes to a range of European customers in a broad range of sectors.

Henrik Henriksson, CEO of H2 Green Steel, said:

“We are proud to partner with leading global institutions, investors, and industrial companies. Our investors are leaders in their respective fields and at the forefront of enabling the change required to meet our climate targets. This private placement round is a true sign of strength for our business – sustainability and profitability go hand in hand.”