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SSAB quietly pulls out of $500M green steel award negotiations – The Swedish company sought to make iron using green hydrogen in Mississippi – Canary Media

steel iron green hydrogen

SSAB quietly pulls out of $500M green steel award negotiations – The Swedish company sought to make iron using green hydrogen in Mississippi – Canary Media

The Swedish company sought to make iron using green hydrogen in Mississippi, as part of the Biden administration’s $6B Industrial Demonstrations Program.

The Biden administration last year pledged up to $1 billion to help build two pioneering green steel projects in the United States, as part of a broader push to clean up the nation’s dirtiest industries.

Now, the steelmaker behind one of the initiatives — a hydrogen-fueled facility proposed in Mississippi — has quietly withdrawn from federal award negotiations, and the future of the project remains unclear.

In March 2024, the U.S. Department of Energy (DOE) announced up to $6 billion in awards for commercial-scale projects that demonstrate technologies for slashing emissions from the furnaces, refineries, smelters, and factories that produce America’s industrial materials. Swedish steelmaker SSAB was in the running to receive up to $500 million for the Mississippi plant. Cleveland-Cliffs was also selected for a $500 million award for a green steel project in Ohio.

Most of the world’s primary steel is made by smelting iron ore in coal-fueled blast furnaces. As a result, steel production generates as much as 9 percent of human-caused carbon dioxide emissions every year, along with significant levels of toxic air pollution.

As part of the DOE’s Industrial Demonstrations Program, SSAB had proposed building a novel facility in Perry County, Mississippi, that instead would use green hydrogen to produce iron for steelmaking. If completed, it would be the first plant of its kind in the United States. A handful of other hydrogen-fueled facilities are proposed in Europe and China, but only one is actually operating today: the Hybrit pilot plant in Sweden, in which SSAB is a partner. 

SSAB’s Mississippi project was expected to use the Hybrit technology, which deploys green hydrogen in a direct reduced iron (DRI) process to convert iron ore into briquettes for making ​“fossil-free steel.” Another company, Hy Stor Energy, was set to supply 100 percent of that hydrogen — first by building gigawatts’ worth of renewable energy capacity in southern Mississippi, then by using the electricity to split water into H2 and oxygen.

Hy Stor’s website isn’t currently working, and the LinkedIn profile of founder and chief executive Laura Luce lists her as having departed the startup in October 2024. A representative for Hy Stor did not return Canary Media’s request for comment for this story.

While SSAB ​“continues the technical development of decarbonization projects in the U.S., including Hybrit,” it is no longer negotiating with the DOE’s Office of Clean Energy Demonstrations to complete its funding agreement, the company said in a statement to Canary Media. The program requires awardees to contribute at least 50 percent of the project’s total cost.

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According to the statement,

SSAB remains focused on technical exchanges with the DOE and collaboration with other potential partners related to the hydrogen, clean energy, and equipment supply chains,

The steelmaker didn’t address questions about why it withdrew from negotiations or what might come next for the Perry County project.

The development arrives at an uncertain time for the nascent clean hydrogen market and the DOE’s Industrial Demonstrations Program itself.

Hy Stor recently encountered setbacks in bringing its so-called Mississippi Clean Hydrogen Hub online. Along with producing hydrogen from renewables, the company planned to store H2 in underground salt caverns throughout the region.

Last fall, Hy Stor abruptly canceled a preliminary supply deal to reserve more than 1 gigawatt in electrolyzer capacity. Electrolyzers are an essential component of making hydrogen from renewables. At the time, Hy Stor said it didn’t make sense for the company to make its upcoming capacity reservation payments given the ​“difficult market environment” for carbon-free hydrogen.

Eric Reidel of Connor, Clark & Lunn Infrastructure, which is Hy Stor’s controlling shareholder, told,

Canary Media in early October. The green hydrogen market has faced a series of headwinds that have resulted in it taking longer than anticipated to bring our lead project to fruition,

Meanwhile, the Industrial Demonstrations Program and other federal clean energy initiatives face major unknowns with President-elect Donald Trump set to step into office next week.

Trump has called for rescinding unspent money allocated by the Inflation Reduction Act — the biggest funding source for the industrial decarbonization grants. Any dollars that haven’t already been distributed or legally obligated by the time Trump takes office on January 20 could potentially be pulled back, experts say.

Still, at least some funding for green steel projects is already out the door.

Ohio-based Cleveland-Cliffs has received $9.5 million of what could be up to $500 million from the DOE to build its own novel project in Middletown, Ohio. Like SSAB, the manufacturer also plans to build a DRI ironmaking plant, but with a key difference. Initially, the facility will run on fossil gas, then gradually mix in hydrogen when — or if — supplies become available.

 READ the latest news shaping the hydrogen market at Hydrogen Central

SSAB quietly pulls out of $500M green steel award negotiations – The Swedish company sought to make iron using green hydrogen in Mississippi – Canary Media, source

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