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The funds will be used to build a demonstration plant for the production of sponge iron

Sweden’s Hybrit, a joint venture between steelmaker SSAB, mining company LKAB and energy company Vattenfall, has received a SEK 3.1 billion ($302 million) grant under the Swedish Energy Agency’s Industriklivet program. The company said in a statement.

The investments will be used to build the first demonstration plant in Jellivare for the production of sponge iron without fossil fuels on an industrial scale. The Swedish mining company LKAB is responsible for the construction and will be the main recipient of support.

«The processing and production of fossil fuel-free sponge iron is essential for Sweden’s climate and competitiveness. We are delighted to announce that the government is participating and sharing the initial risk in this important step towards the industrialization of HYBRIT technology,» noted Jan Mostryom, President and CEO of LKAB.

Hybrit’s initial application included a request for support of SEK 4.9 billion, which was later adjusted to SEK 3.7 billion.

The Swedish company’s demonstration plant is one of 35 projects from 12 EU countries that are part of the Hy2Use IPCEI (Important Projects of Common European Interest), which allows member states to provide state support to priority initiatives of strategic common European interest.

Robert Andren, Director General of the Swedish Energy Agency, noted that the future competitiveness of the country’s industry largely depends on the rejection of fossil fuels. Therefore, the investments made in Industriklivet are of great importance.

Although the HYBRIT technology, which reduces iron ore pellets to sponge iron using hydrogen, has been tested and proven successful, it has not yet been fully utilized on a large scale. The demonstration plant is expected to produce more than 1.3 million tons per year of sponge iron, a volume that is intended to support the green transition of Swedish steel company SSAB.

The electricity demand for the HYBRIT demonstration plant is estimated to be approximately 5 TWh/year at full operation, primarily for the large-scale production of hydrogen required for the direct reduction process.

As GMK Center reported earlier, Hybrit achieved a breakthrough in hydrogen storage technology, demonstrating a reduction in the cost of its production by up to 40%. The company conducted commercial tests of hydrogen storage on the electricity market for a month. The purpose of the tests was to produce hydrogen using green electricity at a variable price with the lowest possible costs.