LULEÅ, Sweden ― Situated just below the Arctic circle in Sweden’s sparsely populated Norrbotten County is a quiet picturesque city, nestled in between forests and an archipelago that stretches out into the Gulf of Bothnia toward Finland.
Luleå is known as Stålstaden (“Steel City”) and it is the beating heart of Sweden’s steel industry, home to a sprawling industrial steelworks that employs over a thousand workers. Steel underpins the city’s economy with around 2 million tons of steel slabs produced every year in Luleå. The slabs are sent by train to the city of Borlänge, where they are processed and used to make products like cars, tractors and ships.
The industry may be a key part of Sweden’s economy, but it is also an environmental nightmare ― steel production is responsible for 10% of the country’s CO2 emissions. Globally, steel production contributes 7-9% of the world’s direct emissions from fossil fuels, and demand for steel is projected to increase thanks to growing global populations and rising urbanization.
Reducing — or ideally eliminating — carbon emissions from the steel industry is crucial if nations are to meet the Paris climate agreement goal of keeping temperature rises below 2 degrees Celsius to avoid catastrophic climate change. Steel manufacturers are facing increasing pressure to test emerging strategies for limiting their carbon footprint.
Here in Arctic Sweden, a plan is underway to decarbonize the industry and produce the world’s first “green” steel in a process that uses no fossil fuels.
Swedish steel company SSAB’s Luleå steelworks lies just east of the city center. At its entrance sits a hulking coal-stained blast furnace surrounded by industrial buildings, rail tracks and heavy machinery. A few hundred meters away, in a secluded corner of the industrial complex, stands the HYBRIT initiative pilot plant, a state-of-the-art $157 million project for developing fossil-free steel. This plant will soon be joined by a demonstration plant, with hopes to have full-scale production by 2026.
The traditional method of producing steel uses large furnaces powered by coal to remove oxygen from iron ore, releasing CO2 as a byproduct. It’s a process that has not changed since the mid-19th century when large-scale steel production began.
The HYBRIT plant ― a collaboration between SSAB, Europe’s largest iron ore producer LKAB and power company Vattenfall ― will use renewable energy and hydrogen to extract oxygen from iron ore, producing water as a byproduct, rather than carbon dioxide. The whole process will use no fossil fuels and could mark a monumental shift in an industry which employs 6 million people globally but has struggled to see a place for itself in a decarbonized world.
HYBRIT is not the only green steel initiative; last month ArcelorMittal Europe, the largest steelmaker in the EU, announced a similar hydrogen-based decarbonization strategy that would see emissions slashed and net zero by 2050. But, so far, Sweden’s plan promises to be the fastest route in getting 100% fossil-free steel on the market.
Although much of the project is shrouded in secrecy, there is a palpable sense of optimism among employees of SSAB, the city’s largest employer. Ted Ejdemo, an industrial electrician at SSAB who lives in Luleå, believes it’s essential for the steel industry to adapt. “We have had these green thoughts in the shadows for some time now,” he explains. “This is potentially revolutionary.”
Sweden has long been at the forefront when it comes to national responses to climate change. In 2017, the government set an ambitious goal of going fossil-free by 2045 and achieving negative emissions after that. The HYBRIT initiative, which has received $57 million in funding from the state-run Swedish Energy Agency, will play a key role in ensuring the country meets this target.
During the opening ceremony of HYBRIT’s pilot plant in September, Swedish Prime Minister Stefan Lövfen made it clear what the government expected of the project; “Today, you are laying the foundations that will enable the Swedish steel industry to be entirely fossil- and carbon-dioxide-free in 20 years. This is ambitious. But it is necessary.”
Hydrogen-based steel production is one of the most promising avenues for decarbonizing the industry. But producing enough hydrogen is an energy-intensive process ― and doing it in a carbon-neutral way would require significant renewable energy.
The need for large amounts of fossil-free electricity is one reason why Luleå was chosen as a location for the pilot plant, said Martin Pei, CTO of SSAB and initiator of the HYBRIT project. Hydropower accounts for roughly 40% of power production in Sweden. A good chunk of that is generated in Norrbotten County, home to some of the country’s largest rivers. The area produces 16 TWh of hydropower per year, exceeding local demand by about 50%; the excess is sent to the rest of the country.
It’s not just the availability of renewable energy that has helped shuttle this project along, says Max Åhman, a senior lecturer at Lund University in Sweden, who studies climate policy with a focus on heavy industry. Clear political signals have also helped at both a national and European Union level. E.U.-funded initiatives such as the Ultra-Low CO2 steelmaking project and Green Steel for Europe have supported steelmakers to develop fossil-free technology.
SSAB has production plants in Sweden, Finland and the U.S., where it operates steel mills in Iowa and Alabama that use electric arc furnaces — as opposed to a blast furnace — which produce steel from scrap metal. “We believe that we will also be able to make fossil-free steel products in the U.S. in the future,” said Pei. “We have a lot of interest from our U.S.-based customers.” But Åhman warns that while the U.S. has huge potential to implement green steel projects, “it would need a trustworthy commitment at a political level.”
There is also a cost issue to surmount. Fossil-free steel would be 20-30% more expensive than current methods, according to a pre-feasibility study of the HYBRIT initiative. But the study also projects that declining prices in renewable electricity and increasing costs for carbon dioxide emissions through the EU Emissions Trading Scheme, a cap-and-trade system for cutting greenhouse gas emissions, would offset these costs.
Research conducted by the Royal Institute of Technology in Stockholm in collaboration with HYBRIT suggests that impurities found in steel, which must be removed in the manufacturing process, are caused by the use of coal and would not be present in green steel, further offsetting the costs associated with the fossil-free method.
“I think the argument about cost is spurious actually because there isn’t an option where you say, We will just keep making steel and keep emitting carbon dioxide,” says Chris Martin, the CEO of the Materials Processing Institute, “that option will cease to exist because it will be legislated out of existence.”
Among residents of Svartöstaden, an area that borders SSAB’s industrial zone, the steel company enjoys a reputation as a reliable employer and a cornerstone of the local economy, but interactions with the company over the years have left some feeling jaded. Many can recall a time when dust from the factory would regularly coat the area’s elegant wooden houses with dust. Kerstin Rönnblom, a general practitioner who lives in Svartöstaden, produced a study in 1989 linking the sulfur dioxide and soot in the air to worsening conditions of patients with asthma and bronchitis.
The soot is now long gone, but for Rönnblom and her partner, Boris Ersson, a level of skepticism toward SSAB lingers. They now feel several local concerns have gone unanswered by the company, in particular the plan to store large amounts of hydrogen, which is highly flammable, 25-35 meters below the ground.
“People here in Svartöstaden don’t want coal, I think the idea [of fossil-free steel] is good,” said Rönnblom, “but so far all the discussion has been about how fantastic it is, nothing has been said about potential risks.”
Pei, from SSAB, acknowledged there is always a risk with hydrogen, but said that it’s already quite widely used in chemical industries and that safety is very important to the project.
Anja Örn, a sculptor who lives in the area surrounding the factory, also has mixed feelings about the initiative. “We like this industry, and we understand it is good to produce [steel] in a better way, but I also think we don’t talk about the enormous amount of electricity it will use.” Örn and her partner, Tomas Örn, both fear that the massive increase in demand will lead to more hydropower, which could damage the local ecosystems. The majority of Sweden’s hydro dams lie in or around the Arctic circle, including the Lule River, which runs 286 miles from the Sarek National Park to Luleå. These dams can hurt biodiversity by blocking fish migration routes and drying up parts of the river on which fish and other animal and plant species rely.
When operations at the pilot plant are scaled up — between now and 2024 —the HYBRIT initiative will require electricity equal to the total amount produced by the Lule River every year, equivalent to a about one tenth of Sweden’s annual electricity production. The electricity grid will need to replace this shortfall, but according to energy experts it’s unlikely to come from hydropower as people are increasingly aware of its ecological impacts. “We have four big rivers in Sweden that have not been explored for hydro power, the biggest are Torne River and Kalix River in the very north but I think from a political point of view it would be impossible to use these for hydro power,” says Björn Karlsson, a professor at Gävle University College.
Wind power, which currently accounts for 12% of Sweden’s power production, has been highlighted as one solution to a surge in local energy demand, in particular, Markbygden, Europe’s largest land-based wind farm, which is currently under construction in Norrbotten county. Meeting energy needs for fossil-free steel could increase the demand for local employment, said Pei.
Tomas Karlsson, head of the trade union that represents the roughly 850 blue-collar and 300 white-collar workers at SSAB, is confident that there is a place for steelworkers in a decarbonized industry. “We already have people who work one week at the coal plant, and one week over at the HYBRIT plant,” he said.
HYBRIT is expected to produce the first fossil-free steel by 2026, said Pei. SSAB’s target is for all its operations to be full-scale fossil-free by 2045, in line with Sweden’s carbon-neutral deadline.
“I am really proud that we are the first in the steel industry to do this,” Karlsson said. “If we are to have a better world in the future we must change.”
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