There are two different projects in Sweden competing to be first in producing fossil-free steel based on replacing carbon with hydrogen and all energy input being fossil-free. In Korea we see declarations in the same direction but few actions. Collaboration can be a way forward where all gain.
The Swedish steel maker SSAB and project HYBRIT announced recently that they will build the world’s first production plant for green steel and be ready to deliver by 2026.
The contender is the green steel startup company H2 Green Steel (H2GS). They announced their existence just a few weeks ago and let the world know they intend to build a brand new green steel plant and be ready for production already 2024.
Both of these projects will need massive amounts of hydrogen and have plans for building the biggest yet giga-scale plants to produce green hydrogen from fossil-free energy. This week, the Hybrit project partners announced they are building a pilot for a rock cavern storage of hydrogen.
Does it matter who wins to market?
To Sweden it shouldn’t really matter which is first to market. The mining company LKAB deliver iron ore to the whole world and there is plenty to supply both old steel makers and an entering steel startup companies. To the contestants it matters who will win because there is a race to be won, but they are also specialized and will probably be better described as complementary to each other on the market.
HYBRIT’s pilot facility in Luleå is already up and running and the first customers will have green sponge iron available this fall to test the green steel. Also reported this week, Volvo Group announced they have entered a collaboration with SSAB to produce Volvo trucks from green steel. We are likely to see concept vehicles from green steel very soon and I believe there will be other examples following with some tangible examples already this year!
Buying time with declarations
The contrast to the situation here in Korea is significant. There is a realization that there is a problem and Korea is committed to be carbon neutral by 2050. There are positive examples of large Korean companies facing the challenges but it seems many will need to buy some time by acknowledging the problems before they can present hard actions to start their transition journey.
The Korean steel industry can serve as an example of this. It’s a huge industry with global actors and is serving the also huge automotive industry with raw materials. The Korea Iron & Steel Association (KOSA) launched a Green Steel Committe in February, as an industry-academy-government alliance for carbon neutrality in steel. They announced a Joint Declaration on 2050 Carbon Neutrality of Steel industry, and global collaboration with World Steel Association and international steel industry for a low-carbon society.
The biggest Korean steel maker, POSCO, which ranked 5 in the world 2019 in tonnage produced (Hyundai Steel no 15, SSAB no 49), issued a Dialogue for Climate Action In December (Report here and press release here) where they pledge to be carbon neutral by 2050. But the time-plan indicate very little actions the coming few years and the CO2 reductions are located many years in the future. Hyundai Steel is not faring any better and we will continue to follow their response to climate change.
The Green Steel Committee has not yet formed and it’s not clear when that will happen, and the Korean steel makers are in very early stages of talking about CO2 reduction with their customers.
Pull the deadline for market advantage
The dynamic in the Swedish industry have been for industry to take seriously the hard target of carbon-neutrality by 2050; asking the government for conducive conditions to meet the target; and then to innovate and formulate business strategies that have enabled several industries to pull the deadline closer in order to get a market advantage. If Korea (and other countries) can make the same commitment to a green industry transition, they will be a tough match but more importantly, the global ability to reach the objectives of the Paris agreement will be much improved.
Compete and collaborate to be the best
Why not work together to make this happen. There are many challenges that are common to all companies, such as the overall challenge of transitioning to sustainable energy systems, or the more specific need for improved methods to safely produce, store and manage hydrogen. Swedish companies are showing they are not afraid of competition—you need to fight the best to be the best—whether it’s in steel, telecom or anything else, and collaboration is motivated by the same reasons.