Dutch pension fund PFZW, which manages around €237.8bn of assets, has issued a €30m loan to a Swedish firm for the construction of a hydrogen-powered steel plant.
The firm H2 Green Steel offers the first wide-scale application of green hydrogen in steel manufacturing, it has so far raised almost €6.5bn.
This comes as ABP, the pension fund which manages around €456bn on behalf of public sector workers in the Netherlands, issued a €27m loan to the Swedish firm last week.
According to PFZW, the plant will produce 2.5m tonnes of steel annually and will contribute to the global energy transition, reducing greenhouse gases within a sector where major sustainability efforts have been difficult.
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.
By using locally produced green hydrogen instead of coal, H2 Green Steel aims to reduce the carbon footprint of steel manufacturing by 95%, PFZW explained.
