Green Steel and Hydrogen: A Cleaner Future for Heavy Industry
The steel industry is one of the largest industrial contributors to global carbon emissions, accounting for approximately 7% of worldwide CO₂ output, according to the International Energy Agency (IEA). Despite growing awareness of the need for sustainability, most steel production today still depends heavily on coal. Traditional methods use a mix of iron ore, limestone, and coke—a coal-derived substance—and coal continues to fuel the furnaces that power the process. Experts, including those at the IEA, suggest that steel will remain one of the final holdouts of fossil fuel dependency for years to come.
However, that may soon begin to change. Companies like H2 Green Steel are leading a new wave of clean technology solutions aimed at decarbonising the sector. The Swedish startup is currently building Europe’s first large-scale green steel plant in Boden, in the country’s far north. With production slated to begin in 2026, the company has already secured all necessary environmental permits and raised €6.5 billion in financing. Construction began in mid-2022, and the first pieces of equipment for sustainable steel production were installed during the summer of 2025.
H2 Green Steel plans to generate 5 million tons of green steel every year by 2030. The business is applying green hydrogen within the process, which is produced via the electrolysis of water powered by renewables. Clean hydrogen replaces coal in the process of direct reduction iron (DRI), which reduces iron ore to steel. Traditionally, DRI has used natural gas, but H2 Green Steel’s system will be powered entirely by green hydrogen. The final process, melting and refining the steel, will happen in electric arc furnaces, reducing emissions further.
According to Karin Hallstan, Head of Public and Media Relations at H2 Green Steel, the company’s mission is rooted in scientific innovation. Hallstan explains that we rely on the power of science and must transform our economy to meet the goals of the Paris Agreement and reduce the emission of greenhouse gases that are causing climate change. Hallstan highlights that if we don’t transform some of the world’s most polluting industries, such as steel and cement, cleantech will be the solution.
While green steel production is still in its infancy, its potential is being matched in other heavy industries. The cement sector, responsible for another 7% of global CO₂ emissions, is also exploring green hydrogen as a viable alternative. In Spain, the European HYIELD project is currently building the continent’s first industrial-scale waste-to-hydrogen facility. Once operational, the hydrogen produced will be used in cement production, aiming to cut carbon emissions by up to 47%.
Together, these efforts represent a critical step forward in the global push to decarbonise heavy industry. The adoption of green hydrogen and other cleantech innovations offers a path not only to cleaner production methods but also to economic opportunity through new technologies, jobs, and industries that align with climate goals.
As the world races to meet its climate commitments, transformation in the steel and cement sectors will be essential. Though challenges remain, companies like H2 Green Steel and initiatives like HYIELD demonstrate that a cleaner industrial future is not only possible—it’s already underway.