Hybrit is granted SEK 3.1 billion

The Swedish Energy Agency grants LKAB and Hybrit Development AB SEK 3.1 billion in state aid through the Industrial Leap. The project will establish a demonstration plant for manufacturing fossil-free sponge iron.  The plant creates the potential for cutting Sweden´s carbon emissions by 1.8 million tonnes annually.

Sweden aims to be fully fossil-free by 2045, and thereafter achieve negative emissions. To reach this goal, Swedish industry needs to take an active part in the green transition, as it currently is responsible for one-third of the country’s total fossil emissions. Investments in innovative technologies and often unproven, but promising, solutions are essential.

“The competitiveness of Swedish industry is largely dependent on a rapid decarbonisation. Investments co-financed by the Industrial Leap are essential in achieving this and are important not only from a climate mitigation perspective, but also for securing employment and competence in both traditional and new industrial regions in our country. This project - Hybrit - is the single largest financial decision we have made so far, and it is an important one”, explains Robert Andrén, Director General of the Swedish Energy Agency.

Demonstration plant in Gällivare

LKAB and Hybrit Development AB jointly applied for funding of this step of the Hybrit project. LKAB receives SEK 3.1 billion and Hybrit Development AB receives SEK 3.6 million. A demonstration plant is to be built on the premises of the existing LKAB plant in Gällivare, where direct reduction of iron ore pellets using fossil-free hydrogen will take place. At full operation, the plant will produce 1.35 million tonnes of fossil-free sponge iron annually. The plant will be the first of its kind and is an important leap towards manufacturing fossil-free steel.

“The processing and production of fossil-free sponge iron is central to the climate and to Swedish competitiveness. We welcome the announcement that the state is participating and sharing the initial risk in this crucial step to industrialise the Hybrit technology. In order to counter climate change, we need to move forward quickly, and to keep up the pace, it is important that we get all the prerequisites in place for future investment decisions”, says Jan Moström, President and CEO of LKAB.

The Swedish iron and steel industry sector is responsible for substantial carbon emissions, as well as being highly important to Swedish export and economy. Manufacturing fossil-free steel in a sustainable process, from mine to product, will strengthen Swedish and, ultimately, Europe’s competitiveness.

“The demonstration plant has the potential to cut Sweden’s carbon emissions by approximately 1.8 million tonnes annually. It is of great importance that the project now will be demonstrated on an industrial scale. The knowledge acquired through Hybrit will be advantageous in the future”, says Klara Helstad, Head Sustainable Industry unit at the Swedish Energy Agency.

The Hybrit project has been identified and approved by the EU Commission as part of IPCEI, 'Important Project of Common European Interest' and the EU Innovation Fund granted the project € 108 million for the demonstration phase. Now, the Swedish Energy Agency supplies further support, to close the financing gap and increase the possibility of success.

The Industrial Leap is a programme initiated by the Swedish government to support Swedish industry in the green transition.

More about the Industrial Leap


IPCEI Hydrogen