Schaeffler invests EUR 65m in H2 Green Steel

German automotive supplier Schaeffler AG (ETR:SHA) is investing EUR 65 million (USD 69.7m) in Swedish startup H2 Green Steel as the two companies plan to intensify their existing partnership.

The investment is part of a recent equity funding round, in which H2 Green Steel attracted about EUR 1.5 billion to advance the construction of the world’s first large-scale green steel plant in Boden, Sweden.

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Schaeffler said on Monday that the latest investment takes its total involvement in the startup to EUR 100 million. “That’s the most equity Schaeffler has ever put into a minority stake in another company,” the German automotive supplier said.

Founded in 2020, the Swedish startup is focused on producing steel using electricity from fossil-free sources and green hydrogen instead of coal. As a result, the steel has up to 95% less embodied carbon dioxide emission than conventional steel manufactured via the blast furnace route.

Schaeffler first announced an agreement in 2021 to buy green steel from the Swedish firm with effect from 2025. Under the intensified partnership, the German automotive supplier will contribute its expertise to the development of new steel products, such as green e-steel for electromobility. Additionally, the companies will jointly develop new applications for the use of sustainable rolling bearing solutions in production.

The collaboration is in line with Schaeffler’s goal to become completely climate-neutral by 2040. To reach the target, the company is decarbonising the materials it uses most, including steel.

(EUR 1 = USD 1.072)