PressconferenceApril4,2016

CO2-emissionfreeironmaking

Ourworldisbuiltusingsteelandwithincreasingdemandforsteel,moresustainablesoluAonsareneeded.OurcustomersneedsoluAonsthatdeliverhigherperformanceintermsofenergyefficiency,resourceefficiencyandbeFerprocessandproductperformance.

TheworldneedssustainablesoluAons

Togetherwithourcustomers,wewillgofurtherthananyoneelseinrealizingthefullpotenAaloflighter,strongerandmoredurablesteelproducts.

Ourvision:Astronger,lighterandmoresustainableworld

CO2-efficientsteelproducAon

► Wehaveoneoftheworld’smostCO2-efficientironmakingprocesses

► Weusenearlytheminimumamountofcarbonrawmaterialspossibleusingcurrenttechnology

0

20

40

60

80

100

120

140

160

SSAB

EUaverage

NAF

TA

Russia

China

India

Source:Stahl-Zentrum.*Theindexedcarbonefficiencyinironmakingbasedoncoalconsumed2012

Blastfurnacecarbondioxideefficiency*

WEWANTTODOMORE

CO2-emissionfreeironmaking►  SSAB,LKABandVaFenfalltodayannounce

thelaunchofaprojectthatcansolvethesteelindustry’scarbondioxidechallenge,HYBRIT(HydrogenBreakthroughIronmakingTechnology).

►  TheaimistoreducecarbondioxideemissionsfromironmakingtozerobyeliminaAngtheneedtousefossilfuelforironorereducAon.TheideaistoreplacetheblastfurnaceswithanalternaAveprocess,usinghydrogenproducedfrom“clean”electricity.

►  Thismeansthattheby-productfromironmakingwouldbewaternotcarbondioxide.

WhySSAB?► WehaveoneofthemostCO2-efficient

ironmakingprocessesintheworldtoday,butaresAllthelargestsourceofCO2emissionsinSweden

►  Sustainabilityandperformanceareintegratedintoourbusinessmodel

►  TechnicaladvancesinproducAonarepartofourDNAandhistory

► WehaveacAvelybeeninvolvedinEuropeanprojectsaimedatreducingCO2emissions.

► WearenowlaunchingaSwedishnaAonalprojectthataimstodevelopaCO2-emissionfreeironmakingprocessthatcansolvetherootcauseofCO2emissionsinthesteelindustry.

WhyLKAB?

2016-04-048

►  LKABisalreadytodayaworld-leadingproducerofworldclassdirectreducAonpellets

►  BenefitsofusingLKABironorepellets:−  DirectreducAonpelletsareverylowgangue

andrichiniron,givinghighenergyefficiencyinthedirectreducAonprocessaswellasinthefollowingelectricarcfurnaceprocess.ThepelletsalsocreatebeFercondiAonsforproducAonofcleanersteel

►  MorethanhalfoftheenergyrequiredbythepelleAzaAonprocessissuppliedbythechemicaloxidaAonofmagneAtetohemaAte

►  LKABisdedicatedtofollowourclientsintheireffortstoreduceCO2emissionsintheirprocesses

►  DevelopingmethodstofurtherreduceCO2emissionsinourpelleAzingprocesses

0

50

100

150

200

250

300

Sinter HemaAtebasedpellets

LKABpellets

CO2emissionsfromsinteringandpelle<zing(kgCO2/tonne)

-

WhyVaFenfall?►  SwedenhastheambiAontobecome

fossilfree–oneofthebiggestchallengesisindustryandthisishowwecanhelpachievingit.

►  Sweden’selectricitygeneraAonhasamongthelowestCO2emissionsintheworld.

►  ThereareexcellentopportuniAestoincreasesupplyofcarbonfreeelectricity,givenuntappedresourcepotenAal,parAcularlyinwindbutalsoinbiomass.

►  VaFenfallhasextensiveknowledgeabouttheSwedish,NordicandEuropeanenergysystemsandmarketsandiswellpreparedtoinvesAgatetheimpactofacarbonfreeironmakingprocessinSweden.

►  VaFenfallwantstoleadthetransiAontoasustainableenergysystem.CooperaAngwithSwedishindustryinordertoswitchfromfossilfuelstocarbonfreeelectricityisakeyelementofthetransiAoninSweden.

Twomainwaystomakesteeltoday

CO2-emissionfreeironmaking

Theproject►  Pre-feasibilitystudy 2016-2017►  Feasibilitystudy-pilotplanttrials 2018-2024►  DemonstraAonplanttrials 2025-2035

PoliAcalinvolvementisneededtosucceed►  Longtermengagementfromthestateisneededindevelopmentwork,

bothinthepre-feasibilitystudyphasestarAngnowandinasubsequentpilotplanttrial,aswellasinanylong-termdemonstraAonplanttrial

►  ThefollowingarerequiredfromapoliAcalperspecAve:−  CondiAonsforagreenindustrialresearchprogramtoenabletestfaciliAesfor

hydrogengas-basedironmaking−  IntegraAonofworkonzeroemissions2045withlaborpolicy−  Linkenergypolicywithindustrialandenvironmentalissues.Moregreen

electricitycanreplacefossilfuelinbaseindustry.

OurcommitmentFromoursidewearecommi?edto:►  ContribuAngAmeandresourcestofindsoluAonsforCO2-emissionfree

ironmakingonanindustrialscale.►  Takingleadershipinanindustryprojectinlinewiththevisionofanew

industrializaAonofSweden.► MakingagreatcontribuAontoenableSweden’sCO2-emissiontargetsfor

2045.► MeanwhileweconAnuetodecreaseCO2-emissionsbyopAmizingour

exisAngproducAonprocesses.

Swedenhasauniqueopportunity► WehavealreadyreceivedveryposiAvefeedbackforthisiniAaAvefromthe

relevantpoliAciansandauthoriAes.►  Swedenhasauniqueopportunity:

−  Modernminingandsteelindustry−  GoodavailabilityofCO2emissionfreeelectricity−  OutstandingresearchanddevelopmentcapabiliAes

►  ThisprojectwillhelpustotakeimportantstepstoreduceSweden'sCO2emissionsandmakethenecessarychangestobecomeamoresustainablesociety.

QUESTIONS?

Näringsdepartementet

TheSwedisheconomyisingoodshape

Näringsdepartementet

Priceonrawmaterialssteelispressed

Pricesofhot-rolledsteel,spotprice[EUR/ton]

Källa:Jernkontoret

Näringsdepartementet

Atechnologyleapisrequiredtoreduceemissionsofthesteelindustry

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

[tCO2]

Källa:Naturvårdsverket*Inomdenhandladesektorn,ETS

752plantsintotal

EmissionsCO2perplant*

Näringsdepartementet

StrategyfornewindustrialisaAon