Can the Steel Industry Turn Green? A Comparative Case Study on the Respective Roles of the Incumbent SSAB and the New Entrant H2 Green Steel in Accelerating the Sustainability Transition of the Swedish Steel Industry.

Abstract

The Swedish steel industry is responsible for ten percent of the country’s total greenhouse gas (GHG) emissions. For Sweden to meet its climate targets, there is an urgent need to decarbonize the highly emitting steel industry. This has pressured steel producers to investigate and develop alternative production methods, where the Hydrogen-Based Steel (HBS) production technology currently holds the highest potential to decarbonize the industry. The two leading initiatives in Sweden developing the HBS production technology are the incumbent SSAB, through the HYBRIT initiative, and the new entrant H2 Green Steel. This thesis adopts qualitative methods through 15 semi-structured interviews with employees from SSAB and H2GS as well as other external actors, to conduct a comparative case study of SSAB and H2 Green Steel. By applying the Multi-Level-Perspective (MLP) and the Dynamic Capabilities (DCs) framework, this thesis seeks to determine how the potential sustainability transition of the Swedish steel industry will develop and what the respective roles of the incumbent SSAB and the new entrant H2GS are in accelerating the transition. To provide an answer to the research question, the study first analyzes how SSAB and H2GS adopt DCs to lead the sustainability transition of the Swedish steel industry. Secondly, it analyzes the current state of the sustainability transition of the Swedish steel industry from an MLP. The findings suggest that both SSAB and H2GS have adopted the DCs of Learning, Financing, and Organizational Restructuring, but to different extents. While SSAB used its DCs to introduce the HBS niche technology, H2GS used its DCs to accelerate the development of it. Moreover, the findings revealed that several landscape developments have created pressure on the steel industry regime to change, leading to the creation of several trajectories. At the landscape level, the main alterations creating pressure on the regime level are 1) Sustainability Movement, 2) Climate Targets & Regulations, 3) Economic Downturn, 4) Renewable Energy Revolution, and 5) Energy Crisis. These landscape developments have in turn affected the following dimension of the regime level: 1) Regulation & Standards, 2) Customer Demand, 3) Public Funding, 4) Knowledge & Competency, and 5) Infrastructure Developments. Moreover, the findings suggest that some of the current trajectories in the Swedish steel industry are aligned with the HBS development, while others are misaligned. Conflicting pressures from the landscape level onto a regime dimension result in the creation of transition tensions. In the Swedish steel industry, three transition tensions were observed: 1) Knowledge & Competency, 2) Public Funding, and 3) Infrastructure Development. To successfully pursue a transition, it will be critical for the industry to overcome these tensions. Conclusively, the findings suggest that both SSAB and H2GS play a critical role in circumventing and resolving these tensions by efficiently adopting their DCs. By doing this, SSAB and H2GS can in turn accelerate the sustainability transition of the Swedish steel industry.