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Swedish steel producer H2 Green Steel is looking to raise equity funding exceeding €1.5bn ($1.65bn) for its iron, steel and hydrogen plant in Boden, reported the Financial Times (FT).

The steel producer is developing a direct reduced iron (DRI) plant in Boden and is in the initial stages of seeking new financing for the plant.

H2 Green is working with Morgan Stanley’s advisers as part of this plan, reported the FT, citing people familiar with the matter.

The funding is in addition to the €350m in existing equity and will be used to advance the development of the Boden plant.

The facility will be powered by hydrogen plants running on renewable electricity, with production scheduled to start at the end of 2025, with a ramp-up in 2026.

The facility is expected to have an annual production of five million tonnes of green steel by 2030.

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Furthermore, H2 Green Steel signed an agreement with UK-based steel service centre SPM (Steel Processing Midlands) whereby the former will deliver green steel from its proposed plant.

Under the five-year agreement, SPM will secure 25% of its future annual steel demand from H2 Green Steel.

SPM commercial director Nick Liggins said: “Green steel is undeniably the future. It is the biggest change this industry has seen in a century and the speed of change is faster than many expect. As the cost of emissions starts to impact traditionally made steel, green steel will fast become commercially the better option of the two, as governments drive companies towards CO₂ reductions.

“We choose to embark on this journey early and H2 Green Steel is the right match for us as they will offer the greenest steel at 195kg CO₂ emitted per tonne of steel produced.”