Sweden’s Ingka Group, IKEA’s largest retailer, has signed an agreement with H2 Green Steel to see it use hydrogen-produced steel in 50% of IKEA warehouse racking globally.
The agreement is expected to come into effect from 2026, forming part of Ingka Group’s plans to reduce its carbon footprint, while IKEA aims to become climate positive by 2030.
Ingka Group has told H2 View, its aim is to purchase a minimum of 12,000 tonnes of green steel from the company per year.
H2 Green Steel is currently constructing its maiden green steel plant in Boden, Sweden, where hydrogen will be used in the direct reduction of iron (DRI) to produce steel with around 95% less emissions that traditionally produced steel.
Green steel production in Boden is expected to start in 2025, initially producing five million tonnes per year.
“The innovation of companies like H2 Green Steel holds great potential for a positive business and climate impact,” said Karen Pflug, Chief Sustainability Officer at Ingka Group. “We are delighted to announce this agreement, as we also want to inspire other business to follow.”
Pflug noted that significant volumes of steel are used in its warehouse racking, and has said, “If more companies who use steel move to source green steel, it would have a significant impact on global greenhouse gas (GHG) emissions.”
Henrik Henriksson, CEO of H2 Green Steel, added, “Working together with customers like Ingka Group is the foundation for how we build our company.
“The traditional heavy polluting blast furnaces which use coal and coke are replaced by direct reduction processes that use green hydrogen instead. That means that instead of carbon emissions, the main by-product in our process is clean steam.”
This year (2023), the steel innovator has announced a wealth of green steel offtake agreements amounting to billions of euros worth of contracts.
Last week (September 7), H2 Green Steel revealed it had raised €1.5bn ($1.6bn) of equity this year through an investor group led by Hy24, Altor, GIC and Just Climate.
Funds from the raise are planned to fund the construction of the Boden plant and the 700MW of electrolysers for the green hydrogen feedstock which will be supplied by thyssenkrupp nucera.
Will DRI be key to producing sustainable steel?