An employee cutting a sample off a semi-finished metal product at the SSAB mill in Raahe, Finland, in November 2021. Raahe was one of two options considered by the steel manufacturer as the location of a fossil-free steel mill. On 2 April, though, the company said it has decided to build the mill in Luleå, Sweden. (Timo Heikkala – Str / Lehtikuva)

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THE DECISION by SSAB to choose Sweden over Finland as the location of its fossil-free steel mill has kindled discussion in Finland.

SSAB announced last week it will invest about 4.5 billion euros in building a fossil-free steel mill in Luleå, Sweden, rather than in Raahe, Finland. Its completion will signal the shutdown of the current blast furnace-based production system, shaving seven per cent off the carbon dioxide emissions of Sweden.

The mill is to be inaugurated at the end of 2028 and reach full capacity in 2029.

The company revealed that it continues to plan a similar transformation in Raahe, a town of roughly 24,000 people in North Ostrobothnia, but that the timing will depend on its financing and execution capacity, as well as lessons from the project in Luleå.

The decision may have come as a bit of a surprise to some in Finland, according to Helsingin Sanomat.

Martin Lindqvist, the chief executive of SSAB, stated to Kauppalehti last autumn that Raahe was ahead in the race to clinch the investment. The environmental permit process had been fast tracked, electricity links had been secured and other preparations were well underway in Raahe, a roughly 24,000-resident town in North Ostrobothnia.

Minister of Finance Riikka Purra (PS) last Tuesday linked the decision to the political strikes in Finland, pointing to a survey by Technology Finland. The survey found that 40 per cent of companies would be investing less in the country as a result of the strikes, albeit 60 per cent of them with the caveat that the impact on investment decisions would be fairly limited.

“With the situation not being easy also in other regards, SSAB is one of those that are targeted by the strikes,” she wrote on X on 2 April.

A similar conclusion was drawn by, for example, Mikael Pentikäinen, the managing director of the Federation of Finnish Enterprises.

SSAB, though, denied the suggestion that its decision was swayed by the strikes. “This project had been in the works for a long while before the political strikes started. The decision is made based on our operational plans,” Olavi Huhtala, the head of SSAB Europe, commented to YLE on 2 April.

The Finnish Climate Change Panel reminded that the Raahe mill has accounted for around 10 per cent of carbon dioxide emissions in Finland. Chairperson Jyri Seppälä said to the public broadcasting company that the decision to at least delay the mill’s decarbonisation could complicate the national effort to achieve carbon neutrality by 2035, especially if no other investments are made to nudge the mill in a low-carbon direction.

“[The delay] doesn’t create a completely impossible situation for our goals because we’re making good progress elsewhere in emissions. We do have to turn our land-use sector into a net sink by 2035 to achieve carbon neutrality,” he said to YLE on Wednesday.

The Raahe mill, he added, is so large that investments in low-carbon processes are all but necessary.

“The mill has to compete with some other merits than simply by producing traditional steel well. This low-carbon aspect is definitely one competitive measure that’d enable the continuation of production in future,” Seppälä stated to YLE.

Aleksi Teivainen – HT

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