Dutch pension fund ABP, which manages around €456bn on behalf of public sector workers in the Netherlands has issued a €27m loan to a Swedish firm specialising in low-carbon steel production.
Steel is a vital component for the energy transition, being essential to the construction to wind turbines and electric vehicles. But current production methods are highly carbon intensive accounting for more than 2.3Gt of CO2 per annum, accounting for 6-9% of global CO2 emissions and approximately 5% of all carbon emissions in the EU.
The Swedish firm H2 Green Steel offers the first wide-scale application of green hydrogen in steel manufacturing, it has so far raised almost €6.5bn.
By using locally produced green hydrogen instead of coal, it aims to reduce the carbon footprint of steel manufacturing by 95%, the firm said.
The factory will be operational in 2025 and aims to produce around 2.5m tonnes of steel per year, delivering among others to car manufacturers.
ABP invests predominantly across North America and Europe, it is a defined benefit fund and as of December 2023 reported a funding level of 113%.
