Swedish blue-collar pension provider AMF announced this morning it is investing €35m in a local company aiming to make steel without fossil fuels, as part of a €190m funding round conducted by the steelmaker.

Stockholm-based H2 Green Steel said it was securing a total of €190m in the first close of its series B equity financing from a selected group of investors.

The firm said the funding round was being co-led by new investors AMF, GIC and Schaeffler, alongside existing investor Altor Fund V.

Swedbank Robur Alternative Equity is also participating in the equity raise as a new investor, it said, and existing shareholder IMAS Foundation was another participant.

AMF, which managed around SEK737bn (€69.2bn) at the end of June, said H2 Green Steel – privately-owned and founded in 2021 – was currently building its first steel mill to produce fossil-free steel.

Anders Oscarsson, head of equities and ownership at the occupational pensions firm, said: “We appreciate the opportunity to participate and invest in a world-leading industrial project with the potential to be both a good deal for our savers and an important piece of the puzzle in the transition towards a more sustainable society.”

He said H2 Green Steel had a very ambitious strategy for establishment and growth, and that the chances of making a quick start and producing the fossil-free steel that was in such high demand looked very good.

According to its website, H2 Green Steel produces “green” steel by using electricity from fossil-free sources and green hydrogen instead of coal.

AMF said H2 Green Steel aimed to produce 5m tonnes of green steel at its plant in Boden, northern Sweden, annually from 2030 at the latest.

The steel industry currently accounted for around between 7% and 9% of global CO2 emissions, it said, adding that H2 Green Steel’s production reduced emissions by around 95% compared to traditional steel production.

Read the digital edition of IPE’s latest magazine