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Iberdrola, H2 Green Steel plan mega green hydrogen plant, H2 Green Steel plan

Iberdrola, H2 Green Steel plan mega green hydrogen plant, H2 Green Steel plan

MADRID, December 2 (Reuters) - International wind power company Iberdrola and Swedish startup H2 Green Steel plan to build a vast renewable hydrogen factory on the Iberian peninsula to power the manufacture of iron used to manufacturing steel with significantly reduced carbon emissions.

The European Union is pressing the establishment of a supply chain for "green" hydrogen - created by splitting water molecules with renewable electricity - to replace the millions of tonnes of "grey" hydrogen - made with coal or natural gas - that its industry consumes every year.

Iberdrola and H2 Green Steel announced on Thursday that they were looking for a location in Spain or Portugal to construct an electrolysis facility and a direct reduction tower to treat iron mine that they want to build up by 2026.

The original facility's 1 gigawatt (GW) of electrolysis capacity would considerably outperform the 0.3 GW in operation globally. By 2030, the EU plans 40 GW.

According to Iberdrola's head of hydrogen Millan Garcia-Tolla, Reuters, said a 800 million euro ($907 million) on a new renewable capacity to power the electrolyser.

The total cost of the project will be about 2.3 billion euros, according to the European Union's 750 billion dollar pandemic recovery budget.

They might then add a specific steel facility, employing as a blueprint a similar plant that H2 Green Steel is developing in northern Sweden.

Henrik Henriksson stated that manufacturing steel with green hydrogen emits 95 percent less carbon than with coal, and customers are willing to pay 25 percent more for it.

Iberdrola wants to use green hydrogen for processes where electricity can't be used easily.

"I think we're going to make significant advancements if we first respond to... those actual uses of grey hydrogen and plans projects to 2025-2026 such as cement or green steel," Iberdrola's Garcia-Tolla stated.

Environmental campaigners fear that the harmful "grey" version will be prolonged due to environmental pollution, causing some to question the efficiency of using green hydrogen because it will take significant amounts of clean energy production and future cost reductions.

Henriksson, on the other hand, believes that the industry should work to combat climate change with emerging technology.

"You may always wait until tomorrow for the silver bullet, but then we will wait forever," he added.

($1 = 0.8827 euros)

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