Can Europe decarbonise its heavy industry?

Swedish steel is considered the world’s toughest. It may soon become its greenest. In Boden, a town near the Arctic Circle, a startup called h2 Green Steel (h2gs) is erecting a €4bn ($4bn) new mill, Europe’s first in nearly half a century. It will be powered not by the usual coal or natural gas but by green hydrogen, produced on site by the region’s abundant wind and hydropower. When fully built in a few years, it will employ up to 1,800 people and churn out 5m tonnes of steel annually.

The project matters far beyond sparsely populated northern Sweden. The consequences could be momentous for the continent’s producers of steel and other basic materials, such as cement and chemicals, which between them directly contribute around 1% of the eu’s gdp. It would ripple through the supply chains of firms, from carmakers to builders, which account for another 14% of eu output, according to Material Economics, a think-tank. It would boost Europe’s energy independence, the importance of which has been laid bare by Russia’s energy blackmail in response to Western sanctions against its war in Ukraine. And it would be a boon for the climate, since basic-materials industries spew out about a fifth of Europe’s greenhouse-gas emissions. It could in short, thinks Ann Mettler of Breakthrough Energy, a venture-capital fund backed by Bill Gates, mark the rebirth of Europe’s heavy industry for the post-fossil-fuel era.