The European Commission has sanctioned a €128 million initiative, in accordance with EU State aid regulations, aimed at aiding Swedish steel company SSAB AB in the decarbonization of its steel production processes.
This initiative is aligned with the objectives of the European Green Deal and the Green Deal Industrial Plan. It also seeks to reduce reliance on Russian fossil fuels and expedite the transition to greener energy solutions, consistent with the REPowerEU Plan.
Sweden presented this aid measure to support SSAB's shift from a traditional, coal-based steel production methodology at its Lulea facility, located in the Norrbotten region, to an almost zero-emission process. The funding will be facilitated through the Just Transition Fund.
The financial aid, provided as a direct grant, is designated to support the rapid transition to an electric steel manufacturing facility by equipping it with an electric arc furnace, secondary metallurgy tools, and a caster. This furnace will utilize steel scrap and direct reduced iron produced via renewable hydrogen. The expected output for this electric steel mill is projected at 2.5 million tonnes of environmentally friendly steel slabs annually.
The Commission emphasized that the measure will expedite the project by three years, with the new facilities set to begin green steel production by 2029.
Through this initiative, significant reductions in CO2 emissions are anticipated, equivalent to three years of traditional fossil-fuel-based operations.
Margrethe Vestager, Executive Vice-President responsible for competition policy, remarked, "This €128 million plan enables Sweden to assist SSAB in fast-tracking its transition to electrified steelmaking at its plant in the Norrbotten region. This effort contributes to the greening of the steel supply chain, in alignment with the EU's climate neutrality target for 2050, while ensuring that market competition remains fair."
