Ingka Group, the operator of Ikea stores, has entered into a procurement agreement with the Swedish startup H2 Green Steel to acquire environmentally friendly steel for its warehouse racking systems.
As the world’s largest owner of Ikea furniture outlets, this arrangement will fulfil 50% of the company’s steel requirements for its warehousing infrastructure. The specific financial terms of the agreement have not been disclosed.
This development follows closely on the heels of H2 Green Steel’s recent announcement of securing €1.5 billion in funding from various investors to establish a steel plant and electrolyser in northern Sweden. This facility is expected to produce steel with significantly reduced emissions compared to traditional facilities.
Karen Pflug, chief sustainability officer at Ingka Group, said the innovation delivered by companies such as H2 Green Steel was playing a major role in corporate decarbonisation efforts.
“Significant steel volumes from our warehouse racking business will contain green steel,” she said. “Such improvements will allow us to transition from traditional steel to less carbon-intensive and can support us in reducing carbon emissions in this category by up to 95 per cent.”
Under the terms of agreement between the two firms, green steel made at the Swedish plant should start to be deployed in Ikea stores from 2026.
H2 Green Steel is aiming to start production at its green steel plant, which will replace coal with renewable hydrogen, by the end of 2025.
Henrik Henriksson, CEO of H2 Green Steel, praised Ingka Group for demonstrating its confidence in the nascent green steel market: “Progressive first-mover customers drive the demand for green steel and help us show others that it’s possible to transform the steel industry on an accelerated timeline,” he said. “The traditional heavy polluting blast furnaces which use coal and coke are replaced by direct reduction processes that use green hydrogen instead. That means that instead of carbon emissions, the main by-product in our process is clean steam.”