Vale and H2 Green Steel Sign MoU to Study Development of Green Industrial Hubs in Brazil and US

Vale, a Brazilian multinational corporation engaged in metals and mining, on Friday said that it has signed an agreement with Swedish industrial start-up H2 Green Steel to jointly study the feasibility of developing green industrial hubs in Brazil and North America, enabling sustainable steel production.

H2 Green Steel is exploring to produce low-carbon steel value chain products, such as green hydrogen and hot briquetted iron (HBI) in such centres, using iron ore briquettes produced by Vale as input material and renewable electricity as the energy source for its hydrogen production.

Through this agreement, Vale establishes a partnership in Brazil with a green iron and steel producer that is at the forefront of global decarbonisation, while fostering the low-carbon industry and stimulating the green hydrogen chain in the country.

Vale’s President Eduardo Bartolomeo said that through this partnership, Vale was taking its first steps into the green hydrogen market. “The initiative reinforces Vale’s role as a driver of Brazil’s new industrialisation, which will be based on low-carbon industry, fulfilling our vocation as anchors of regional development, as we have always done throughout our history,” he added.

Founded in 2020, H2 Green Steel has begun construction of its first large-scale steel mill in Boden, in Sweden, using green hydrogen.

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Kajsa Ryttberg-Wallgren, EVP Growth and Hydrogen Business of H2 Green Steel, said that his company was keen to explore other geographies where it can accelerate the decarbonisation of the steel value chain.

“Both Brazil and parts of North America have great potential due to the access of both renewable energy sources, high quality iron ore, and political willingness to support decarbonisation projects. It’s a great opportunity for us to explore our partnership with Vale beyond the pellet supply to our flagship plant in Boden,” she said.

Vale is expected to build and operate briquette plants in the green industrial hubs, which will feed direct reduction reactors for the production of HBI and other metallics. The number of industrial hubs that will be built, their location and production capacity will be defined following feasibility studies to be developed jointly by the two companies.

In July, Vale and H2 Green Steel also signed an agreement to supply direct reduction pellets to the Boden plant. Vale expects to reach a production capacity of 100 million tons of agglomerates (briquettes and pellets) after 2030.

Developed by Vale at its technology center in Brazil, briquette is produced from the low-temperature agglomeration of high-quality iron ore using a technological solution of binders, which gives the final product high mechanical strength. The first briquette plant – an investment of $256 million – is being commissioned in Vitória, in Brazil, and will begin production by the end of the year.

Vale has set a target of reducing its scope 3 emissions in the value chain by 15% by 2035, the equivalent to the emissions of a nation such as New Zealand. Vale has already signed more than 50 agreements with clients to offer decarbonisation solutions, which account for 35% of the company’s scope 3 emissions.

The company has set itself the goal of achieving 100% of electricity consumption from renewable sources in its Brazilian operations by 2025 and globally by 2030.

In July, Vale announced that it reached full capacity at the Sol do Cerrado solar complex, which was inaugurated in 2022 in the state of Minas Gerais, an investment of $600 million that will supply 16% of all the energy consumed by the company in Brazil.