Kingspan agrees partnership with H2 Green Steel
In 2020 Kingspan reduced emissions from operations by 5.2%.
In a pioneering deal, Kingspan, the global leader in advanced insulation and building envelope solutions, has announced investment in H2 Green Steel (‘H2GS’), a company leading the way in new green production methods for steel manufacturing using hydrogen.
Kingspan is set to invest in a Series A equity fundraising round due to close later this month.
Earlier announced investors in the same fundraising round include Scania, the IMAS Foundation, part of the INGKA Group which operates the majority of IKEA stores globally, and Vargas.
Kingspan expects to ultimately be a single-digit minority shareholder within H2 alongside a similarly minded forward-thinking group of investors.
Kingspan’s investment also reflects the company's intention to enter into a long-term supply agreement with H2GS, to supply a substantial share of Kingspan’s future steel requirements.
The move feeds into Kingspan's 'Planet Passionate' plan, and for which the Cavan headquartered firm only recently published a review of progress made in the first of their 10 year strategy to reduce the business' overall environmental impact by 2030.
Kingspan is targeting a reduction in manufacturing carbon (CO2e) emissions to as close to zero as technically possible, together with halving carbon intensity in its primary supply chain.
In 2020 Kingspan reduced emissions from operations by 5.2%.
Also part of the plan, and featuring heavily in their decision to invest in H2, is how Kingspan has been at the forefront of green finance, issuing the largest ever corporate Green Private Placement to raise €750m in September 2020. The company also raised a further €50m Green Loan to fund specific Planet Passionate initiatives.
The building and infrastructure sectors are the biggest users of steel, accounting for 52% of global demand, compared to 12% from the car industry. Steel accounts for 7% of emissions emitted globally. H2GS’s production process replaces coke and coal with green hydrogen to achieve an almost a totally CO2-free steel product. The green hydrogen gas is produced by electrolysis using electricity generated from hydropower and wind power in the Boden-Luleå region in northern Sweden where H2GS is constructing the world’s first large-scale green steel production site.
The total financing for the first phase amounts to approximately €2.5 billion, the majority of which will be financed through green project financing. Production will commence in 2024, and by 2030 the plant will be producing 5m tonnes of green steel annually.
Gene Murtagh, CEO of Kingspan Group welcomed the deal, saying: “We have set ourselves the challenging target of reducing emissions from the primary raw materials we use in manufacturing by 50% by 2030, and H2 Green Steel offers a compelling route to achieving this goal.”
He added: “We recognise that for companies to make a meaningful contribution to address the climate crisis they need to be prepared for radical thinking and actions, and our determination to transform our supply chain reflects this.”