H2 Green Steel (H2GS) has signed a partnership agreement with Spanish power utility Iberdrola for the development of a greenfield hydrogen-based steelmaking project, the Swedish company tells Kallanish.

The venture includes the building of a green hydrogen production facility with 1-gigawatt electrolysis capacity and a direct-reduced iron process capable of producing approximately 2 million tonnes/year.

“Green H2 will be a critical technology in the decarbonisation of heavy industrial processes such as steel production. Innovative projects like this will help to speed up the commercialisation of larger and more sophisticated electrolysers, making green hydrogen more competitive,” says Iberdrola's commercial director Aitor Moso. “With access to abundant supplies of low-cost renewables, and a highly-skilled workforce, the Iberian Peninsula can be central to Europe taking a global leader in the development of this new technology."

The electrolyser will be jointly owned and operated by Iberdrola and H2GS, with the Spanish company as a supplier of renewable energy to the plant. The DRI production, including all downstream processes, will be owned and operated by H2GS.

“We are proud to partner with Iberdrola to enable the increased production of both green H2 and steel. Large-scale hydrogen production will be key to enable the transition of the industry towards sustainable operations,” the H2GS executive director Henrik Henriksson observes.

The plant will be located on the Iberian Peninsula, where several possible locations are currently being evaluated based on access to profitable renewable electricity and infrastructure necessary to successfully produce hydrogen.

The operational start of the project is tentatively scheduled for 2025 or 2026. The investment is $2.61 billion, including public financing.