(Bloomberg) – A green steel startup to build a plant in northern Sweden has attracted investors, including Spotify Technology SA founder Daniel Ek, just months after he invested in a battery maker in his country. originally.
The company, called H2 Green Steel, plans to build the world’s largest hydrogen electrolyzer to produce the alloying material starting in 2024. Other investors in the project led by Vargas Holding AB include Christina Stenbeck, former president of Kinnevik AB, as well as truck maker Scania AB and German family steelmaker Bilstein.
The steel industry accounts for 7% of the world’s total carbon emissions and making it greener is crucial in the fight against climate change. However, huge barriers remain, as new technologies with high operating costs cannot currently compete with cheaper methods, which generate a large amount of carbon.
“It’s an industry burdened by today’s CO2 footprint,” said Carl-Erik Lagercrantz, Vargas CEO. “Clearly, we have a chance together.”
Vargas is also one of the investors in Northvolt AB, a battery manufacturer that is aiming for cell production by the end of the year. The company said in September that Ek, as well as Stenbeck, had joined current shareholders, including Goldman Sachs Group Inc. and Volkswagen AG, to raise $ 600 million.
In September, Ek pledged to invest 1 billion euros (US $ 1.2 billion) of his personal assets in European startups. Spotify did not immediately respond to a request for comment on Ek’s investment, and H2GS declined to comment on the size of its stake.
H2GS has secured € 2.5 billion (US $ 3 billion) of funding for the first phase of the project, which will be raised through a combination of equity and green project financing. Morgan Stanley, Societe Generale SA and KfW IPEX-Bank act as financial advisers.
The plant will begin production in 2024 and will have a capacity of 5 million tons of steel by the end of this decade. To produce the material, the company will initially use 60% scrap and 40% iron ore, executives told a press conference.
Many companies are trying to produce green steel, although the technologies required to produce it are limited to pilot projects capable of producing small amounts of the alloy. Chinese steel giant Baowu was the last major producer to promise net zero emissions by 2050, joining companies like ArcelorMittal SA and Thyssenkrupp AG to set the target.
Original Note: Spotify Billionaire Ek Among Investors in Green Steel Startup
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