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10-10-2024 08:48

Swedish billion kronor investment in climate-neutral steel and pulp input

Lime is a component in steelmaking and the production of paper pulp. It’s also used in everything from paint to water purification. Unfortunately, lime is also a real climate culprit. SMA Mineral in Värmland will change this with new technology, 10 billion kronor and Nordea as a partner.
Svante Fielding, vd SMA Mineral.
Svante Fielding, CEO of SMA Mineral.

In Sweden, we have been burning lime for more than a thousand years. Today we produce hundreds of thousands of tonnes of burnt lime every year. Just over half goes to the steel industry and another 15 per cent to the pulp industry. And the fact is that without lime, neither steel nor paper can be produced.

“It’s hard to overestimate how important lime is for Swedish society and industry, and few people know about this. Burnt lime is used in a wide range of processes linked to important Swedish industries, food supply and water purification. So lime is needed, but we can no longer justify its impact on the climate,” explains Svante Fielding, CEO of SMA Mineral.

Our goal is to halve our CO2 emissions by 2027, and we will do this by producing the world’s first carbon-neutral lime.

Svante Fielding, CEO of SMA Mineral.

SMA Mineral is a family business with more than 200 employees and operations in over 20 locations in the Nordic countries, Estonia and Bulgaria. Today, SMA Mineral supplies 70 percent of the burnt lime needed for production in the Swedish steel industry. They also supply around half of all the lime needed by the pulp industry. But for every tonne of burnt lime, one tonne of carbon dioxide is emitted. 300 kilograms of the emissions come from the oil, coal or gas required in traditional lime production, and 700 kilograms come from carbon dioxide being released from the lime during the calcination process itself. 

“This is clearly unsustainable,” says Svante Fielding. “That’s why we have decided to solve this problem once and for all. Our goal is to halve our CO2 emissions by 2027, and we will do this by producing the world’s first carbon-neutral lime.”

SMA Mineral – success factors for the transition journey

  1. Set challenging goals, anchored in the board and among owners, and plan and execute accordingly. Don’t wait until all the pieces of the puzzle have fallen into place. 
  2. Use the systems, regulations and policies available and find ways to make an impact, for example through opinion formation. 
  3. Collaborate with multiple players who together can enable change with even greater power and speed – be it in terms of technical expertise or infrastructure.
  4. Make sure that you have the right financial partners on board.
  5. Make sure that the work of transformation runs alongside daily operations without slowing down in either area. 
  6. Analyse, evaluate, and act proactively on issues arising along the way – without unnecessary delay.

 

From emission to aviation fuel

The solution lies in electrification. SMA Mineral has bought into SaltX Technology, and the two companies are now working together on an electrification process for lime production. With green electricity, they can reduce emissions by 30 percent, but the process also makes something astonishing possible – collecting all the carbon dioxide released from the lime and using it for aviation fuel.

“We’re collaborating with the US fuel company Infinium, which is the first in the world to commercially produce aviation fuel from carbon dioxide and hydrogen gas. This means that the carbon dioxide from our production will in practice be carbon neutral because the airlines can reduce their dependence on oil,” explains Svante Fielding.

However, net emissions will actually be even lower. Firstly, oil has a larger climate footprint before even reaching the aircraft engines. And secondly, burnt lime absorbs carbon dioxide again when used in society.

This is an incredible innovation journey that we’re now embarking on, and one that our customers need to be able to achieve their ambitious climate goals.

Svante Fielding, CEO of SMA Mineral.

“Without being too technical, this is an incredible innovation journey that we’re now embarking on, and one that our customers – not least in the steel industry – need to be able to achieve their ambitious climate goals,” he adds.

To achieve the goal of halving carbon dioxide emissions, SMA Mineral plans to build a completely new plant in Norway with a production capacity of 300,000 tonnes of climate-neutral lime. In addition, the plant will deliver 2,000 barrels of the new aviation fuel – every day. In other words, this is an innovation journey that is also driving business development. 

An investment equivalent to seven years’ annual turnover – backed by the bank

This investment amounts to a total of 10 billion kronor – much more than SMA Mineral’s current turnover of 1.4 billion kronor.

“This is a necessary investment for both us and the planet, but of course we need help with the financing. That’s why we’re grateful for our collaboration with Nordea, which has been part of this journey from the beginning. Today we and the Swedish top management team are working together to get to the finishing line,” says Svante Fielding.

SMA Mineral has banked with Nordea for a long time and presented its plans two years ago. Since then, they have worked together with the bank and its advisers to resolve financing and planning issues. Because, says Svante Fielding, this is about much more than just applying for a loan. 

“This is in every respect a partnership where we team up to find the best solution to make both the plant and climate-neutral lime a reality. Nordea is highly committed – both in terms of the individual employees and Nordea’s wish to finance solutions that will lead to carbon dioxide reductions. And here we’re talking about more than 500,000 tonnes of reduced climate impact per year in the long term,” he says.

For SMA Mineral, this project is important for several reasons. With stricter EU requirements, customers within all sectors need to reduce their emissions throughout the value chain. This means that climate-neutral lime is business critical in the long term. But it is also about something much more fundamental than that.

“We produce a product that is key to Sweden, and we are proud of that. But we don’t want our emissions to change the planet’s climate – that’s the main reason why we act now and set near-term goals. We don’t have time to wait, it’s as simple as that,” says Svante Fielding.

 

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