H2 Green Steel and Fortum have signed a frame agreement for electricity trading for the supply of CO2-free electricity for H2 Green Steel’s operations in Northern Sweden.

The two companies have formed a partnership that enables H2 Green Steel to purchase Fortum's carbon-free electricity on both short and long-term bases for its green steel operations in Northern Sweden. The parties will strengthen the cooperation further in long-term Power Purchase Agreements (PPAs). The frame agreement is initially planned to include two deals for 2.3 TWh per year: an index-based PPA of 1.3 TWh annually (from 2026) with a five-year hedging horizon, and a fixed price PPA of 1 TWh for up to nine years (from 2027).

Significant volumes of electricity are needed to power the 700-800 MW electrolyser that will generate green hydrogen, which in turn will reduce iron ore to sponge iron that will feed the steel production at H2 Green Steel’s plant in Boden. In this important partnership with Fortum, another big step is taken in support of H2 Green Steel’s ambitious venture and the decarbonisation of the steel industry.

H2 Green Steel’s plant in Boden will initially produce an annual volume of 2.5 million tonnes of green steel. In the second phase, the company will ramp up production to about 5 million tonnes. It is expected to start operation 2025.

Long-term renewable energy at competitive price-levels

“Fortum takes a front runner position among Nordic companies supporting the region's green industrialisation. Despite a historic energy crisis with record-high prices on electricity, Fortum demonstrates true sustainability leadership and takes a long-term view to solve the fundamental issue, namely the climate crisis. We are proud to bring Fortum onboard as a core partner in our energy portfolio and will continue to build our portfolio with long-term renewable electricity at competitive price-levels,” says Carl-Erik Lagercrantz, vice chairman of H2 Green Steel.