In Sweden’s far north, two investors are rolling out a playbook that could break the financial bottleneck that has bedeviled emerging green industries. So far, they have hatched the world’s first large-scale steel mill powered by green hydrogen and a fast-growing battery maker that has raised more than $9 billion. Next up are heat pumps.
The strategy behind the two companies is the opposite of the build-it-and-they-will-come hope of many startups. Instead, H2 Green Steel and battery maker Northvolt lined up customers and used those commitments to raise money. Often, the customers are also investors.
H2’s factory is going up in the Swedish town of Boden, 50 miles or so from the Arctic Circle. Due to start operating in 2025, it will produce 2.5 million metric tons of steel a year while emitting 5% as much carbon dioxide per ton as a coal-powered blast furnace. It is roughly 100 miles down the road from Northvolt’s first low-carbon gigafactory.
Driving the strategy are Swedish financier Harald Mix and business executive Carl-Erik Lagercrantz, who launched H2 Green Steel through Vargas Holding, their investment firm. “It’s a fantastic formula for how we can actually enable the transition of energy-intensive industries," Mix said. Neither man set out to launch green companies.
Mix founded Altor Equity Partners, a European private-equity firm, where he remains a partner. They first collaborated on a plan to use batteries to reduce electricity costs at telecommunications providers, which were straining under growing demand for data. That early success was the trigger for their green ambitions.
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