They are to begin industrialisation by establishing what they said is the world’s first production plant for fossil-free sponge iron in Gällivare in northern Sweden. Sponge iron – which is traditionally made using fossil fuel – can be fed into steel production in a two-step process that saves energy compare to normal blast furnace production.

Industrialisation of the technology being developed through the Hybrit project and will start in Gällivare where the plant for fossil-free sponge iron – from feedstock to steel – is being planned.

Hybrit Development, which is owned by steel company SSAB, mining company LKAB and renewable energy business Vattenfall, is developing the technology to make steel using hydrogen gas instead of coal, which will minimize climate harmful carbon dioxide emissions from production.

“We are world leaders in the work to transform the steel industry and are now stepping up the pace,” said SSAB president and CEO Martin Lindqvist. “We are doing this for the climate, customers, competitiveness and for employment. That we are now raising ambitions for a completely fossil-free value chain is unique and a message of strength from SSAB and our Hybrit partners. We are seeing a clear increase in demand for fossil-free steel and it is right to speed up our groundbreaking cooperation.”

Industrialization is intended to start with the first demonstration plant, which will be ready in 2026, for the production of 1.3 million tonnes of fossil-free sponge iron in Gällivare. The demonstration plant will be integrated with iron pellet making and is part of LKAB’s transition plan. The goal is to expand sponge iron production to a full industrial scale of 2.7 million tonnes by 2030 to be able to supply SSAB, among others, with feedstock for fossil-free steel.

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The choice of Gällivare for establishing of the plant was based on a joint assessment, where proximity to iron ore, logistics, an electricity supply and energy optimisation were important factors.

“Together, we will lead the transformation of the iron and steel industry, and with Hybrit we will now start our historic transformation to be the future supplier of sponge iron,” said LKAB president and CEO Jan Moström. “The whole process starts with top quality iron ore in the mine and our transition plan gives strong economies of scale that pave the way for the competitive production of fossil-free steel by our customers. This is the greatest thing we can do together for the climate. Once we are ready, we will reduce the global emissions of our customers by 35 million tonnes a year, which is equivalent to the triple the effect of parking all passenger cars in Sweden for good.”

At the same time, SSAB and LKAB will deepen their partnership to create the fossil-free steel value chain from mine to steel, to customer. They have said that they will support and enable each other’s transformation, with Vattenfall as an enabler of the huge need for fossil-free electricity and hydrogen gas.

The companies said that there are many advantages to locating the new sponge iron plant in Gällivare, which is also in close proximity to LKAB’s mining production and processing. Using iron ore pellets that are already warm will save huge amounts of energy. On top of this, 30% of weight will be eliminated from transport since hydrogen gas will be used to remove the oxygen in the iron ore. Gällivare also offers good access to fossil-free electricity from Vattenfall.

“Sweden and Hybrit have a world-leading position in making fossil-free iron- and steelmaking a reality and the initiative will now be further scaled up,” said Vattenfall president and CEO Anna Borg. “That fossil-free electricity and groundbreaking processes will in principle help to eliminate climate-affecting emissions completely from iron- and steelmaking is a flagship example of Vattenfall’s strategy to enable a fossil-free life within a generation. It is now extra important that the permit processes can deliver at the same pace as fossil-free steelmaking.”

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