CS Capital invests in H2 Green Steel to accelerate the decarbonization of the steel industry

Photo by: H2GS/SandellSandberg

CORE SUSTAINABILITY CAPITAL ANNOUNCES INVESTMENT IN H2 GREEN STEEL -THE WORLD’S FIRST LARGE-SCALE GREEN STEEL PLANT

Copenhagen, January 22nd, 2024:

Core Sustainability Capital (“CS Capital”, www.cscapital.dk) today announced the investment in H2 Green Steel (www.h2greensteel.com). H2 Green Steel is aiming to produce five million tons of high-quality green steel annually by 2030, significantly reducing carbon dioxide emissions throughout the production. The investment is aligned with CS Capital’s vision to invest in companies leading the sustainable transition towards renewable energy and sustainable production. The investment furthermore builds on the investment objective of supporting the green transition of hard-to-abate industries, such as steel production.

Founded in Sweden, H2 Green Steel is set to become a pioneering model for the industry, boasting a state-of-the-art facility in Boden, northern Sweden. The fully integrated, digitalized, and circular steel plant will leverage renewable and cost-efficient energy sources, initially prioritizing the decarbonization of steel production and extending its green hydrogen expertise to other hard-to-abate industries.

By investing and supporting the construction of H2 Green Steel, CS Capital will address a major global challenge. Steel is an essential commodity for various industries and as traditional steel production is based on the supply of coke and coal, it is one of the heaviest emitting industries globally. Traditional steel production emits approx. two tons of CO2 pr. ton of steel produced and in Sweden the steel industry is the single largest emitter of carbon dioxide. At the European level, the steel industry accounts for approximately six percent of carbon dioxide emissions. H2 Green Steel’s ambitions are quantified by impressive targets that speak volumes:

  • Up to 95% reduction in CO₂ emissions compared to traditional steelmaking methods.
  • 5 million tons of green steel produced annually by 2030, marking a substantial contribution to the global steel market.
  • 3 billion tons of CO₂ avoidance by 2040, projecting to offset about 1% of the current annual global man-made emissions.

The investment directly responds to a number of the UN Sustainable Development Goals (“SDG”), such as #6 by using a circular water system ensuring minimal clean water usage compared to traditional steel production, #7 through the production of clean energy (in the form of green hydrogen using 100% renewable electricity) for the steel production, #9 by supporting a resilient infrastructure, and SDG #12 by supporting overall responsible production.

The DKK 5.0bn CSC Fund I focuses on thematic investments in Renewable Energy and Energy Efficiency, Resource Optimization, and Societal Health. The fund is supported by the Danish pension company Velliv.

 

Statements

“Investing in H2 Green Steel aligns perfectly with our mission to foster a sustainable and renewable future. We are not just investing in steel; we are investing in a transformative approach that will set new standards for the industry and contribute significantly to global emission reduction efforts,” says Carsten Gröhn, Managing Partner of CS Capital.

“No one has scrutinized our project more thoroughly than those who back our financing. This massive commitment from lenders like CS Capital is a true recognition of the quality of our company. It’s also a big win for the climate as we hope the model will inspire the financing of other decarbonization initiatives in hard-to-abate industries,” says Henrik Henriksson, CEO of H2 Green Steel.

 

About H2 Green Steel

H2 Green Steel (H2GS AB) was founded in 2020 with the ambition to accelerate the decarbonization of the steel industry, using green hydrogen. Steel, which is one of the world’s largest carbon dioxide emitters, is the company’s first business vertical. The founder and largest shareholder of H2 Green Steel is Vargas, which is also co-founder and one of the larger shareholders in Swedish battery maker Northvolt. H2 Green Steel is headquartered in Stockholm, Sweden, with its first green steel plant under development in Boden, northern Sweden.

About CS Capital

Core Sustainability Capital (“CS Capital”) is a private capital investment manager, investing in Nordic companies with strong sustainable- and impact purposes. CS Capital manages DKK 5 billion in its Core Sustainability Fund I, which is backed by Velliv, one of Denmark’s largest Danish pension funds with over 360,000 customers. CS Capital is an active investor with a focus on equity minorities and credit investments to support impact companies and projects with their sustainable growth ambitions towards the green transition.

 

CS Capital contact details
Carsten Gröhn, Managing Partner
Email: carsten.grohn@cscapital.dk
Direct: +45 26 77 25 27

Jimmy Lundby, Head of Credit investments
Email: jimmy.lundby@cscapital.dk
Direct: +45 92 15 51 40

Other projects