Iberdrola in €2.3bn green hydrogen deal

Iberdrola and H2 Green Steel have signed an agreement to build a green hydrogen plant with an installed capacity of 1GW and an estimated investment of €2.bn, and the new plant will power with clean fuel a direct steel reduction furnace with a capacity to produce around 2 million tonnes per year of pure green steel, with a 95 per cent reduction in CO2 emissions.

The green hydrogen plant will have an electrolyser supplied with renewable energy by Iberdrola, while the production of green molten steel and all downstream metallurgical processes will be operated and owned by H2 Green Steel. Both companies will also explore the possibility of locating a steelmaking facility capable of producing between 2.5 and 5 million tonnes of green steel plate per year on the same site.

The decarbonisation of the steel production industry is a growth opportunity for Iberdrola, as it could mean an additional demand of around 5,000TWh per year, equivalent to almost twice the current electricity generation in Europe, as well as 40 million tonnes of green hydrogen. The company is therefore accelerating the implementation of the entire hydrogen value chain.

The project will be financed through a combination of public funds, green project financing instruments and own funds. The joint venture was created following contacts facilitated by the European CEO Alliance initiative, in which H2 Green Steel and Iberdrola have joined forces with other companies to achieve a zero-carbon future and a more resilient and sustainable Europe. The CEO Alliance supports decarbonisation efforts by identifying potential partnerships, encouraging green investments and deploying projects that advance the development of sustainable economies and societies, in line with the European Green Deal.

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