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.
Read more:Green is the new black: An interview with H2 Green 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.
Read more: H2 Green Steel raises €1.5bn to fund green steel plant and related electrolyser
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?
Steel production accounts for 8% of global carbon dioxide (CO2) emissions1, making it one of the most polluting industries. With around 1.4 tonnes of CO2 emissions per tonne of steel produced2, against a backdrop of increasing environmental concerns, the need to clean up the process that produces a vitally important material only continues to grow.
Steel, in the most basic sense, is made by mixing carbon and iron at temperatures above 1,400˚C. Primary steelmaking uses a product dubbed Pig Iron – smelted iron from ore, which contains more carbon than needed for steel.
Steelmakers can use a system that bubbles oxygen through molten pig iron, creating equal oxidisation throughout the metal, in doing so, removing excess carbon, while also vaporising or binding impurities made up of elements such as silicon, phosphorus and manganese.
The systems, known as blast furnace-basic oxygen furnaces (BF-BOF), are one of the leading contributors to CO2 emissions from steelmaking. The direct emissions from integrated BOF plants typically amount to 1.8-3.0 tonnes of CO2 per tonne of steel when coal-fired, and 0.7-1.2 tonnes of CO2 per tonne of steel if gas-fired3.
However, a system first industrialised in the 1960s that uses fuels to react with oxygen in iron oxide pellets to produce highly metallised reduced iron for steelmaking, looks set to benefit from green hydrogen, leaving just steam as the residual, and potentially reducing CO2 emissions by over 95% – the direct reduction of iron – DRI…
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