Waking up to a white world, with fresh snow finally covering the muddy greyness of winter, does wonders for the soul. Gazing at the beautiful frozen landscape certainly helps suppress all those anxieties, old and new, from global warming to omicron. On a morning like this, it is easier to summon the holiday spirit and face the future with the naïve optimism of a kid who has been nice enough to expect a merry and bountiful Christmas.
How appropriate then that the first piece of news to grab my attention this morning is about an exciting project promising new beginnings. Swedish green impact company H2 Green Steel (H2GS) and Spanish renewable energy giant Iberdrola have just announced a partnership to build a one-gigawatt plant somewhere on the Iberian Peninsula. The new facility will generate and feed green hydrogen to a 2-million-ton direct reduction tower, enabling green steel production.
The joint venture makes perfect sense. “By working with a world-class partner, we can initiate our growth journey while reducing the technical risk in our Boden project,” comments Henrik Henriksson, CEO of H2 Green Steel, in the press release. And there is more to be enthusiastic about, argues Aitor Moso Raigoso, Iberdrola’s Liberalized Business Group director. “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 lead in the development of this new green technology,” he says.
Given the green impact venture’s budget of around 2,3 billion Euros, it will take a combination of public funding, green project financing and equity to fund the whole thing. Let’s hope that the busy financiers at the European Union will put their money where their mouth is so the project can tap into their 750-billion-Euro pandemic recovery budget. Luckily, other investors seem to be on board, too. Reportedly, Swedish risk capitalist Harald Mix and his Vargas Holding company are in, for instance.
It is just as invigorating as taking a stroll in the snowy landscape, reading about this new ‘Swedish export wonder’. Don’t get me wrong. I am proud of the fact that this tiny country of ours is the number one exporter of chart music relative to GDP in the world[1]. It is cool indeed, yet not even nearly as cool as it would be becoming a leading exporter of green technology. Steel production accounts for about eight per cent of greenhouse gas emissions globally. Producing steel with green hydrogen emits 95% less carbon than with coal. Do the math.
Not that long ago, in another Snap, I remember writing about those academics accusing the Swedish investment in green steel of being a case of ‘environmental nationalism’. They argued that the electricity used for domestic green steel production could have been exported to replace dirty electricity from coal in other countries. I wonder how they feel about this new export project.
[1] According to a paper by American researchers Joel Waldfogel and Fernando Ferreira of the University of Pennsylvania Wharton School, Pop Internationalism: Has Half a Century of World Music Trade Displaced Local Culture?
