1 What are the advantages of your process for producing fossil-free sponge iron?
- Our process has a lower carbon footprint, a lower production cost and is more energy efficient than competing methods. Both in comparison with traditional production and new processes based on hydrogen produced by electrolysis of water. Our manufacturing process requires around 90% less electricity than hydrogen-based manufacturing processes per tonne of sponge iron produced.
- The innovative FerroSilva process also allows for the creation of carbon sinks, negative carbon dioxide emissions, which makes it unique.
2 What is the difference between your process and competing methods?
- There are several important differences. We use forestry residues, biogenic coal, to produce synthesis gas consisting of carbon monoxide and hydrogen. The gas and iron pellets go through a so-called direct reduction reactor. The end result of the process is fossil-free sponge iron and liquid carbon dioxide. The liquid biogenic carbon dioxide can be used in other industrial processes and replace fossil sources.
- Early in the process, it also creates what is called biogenic BTX (benzene, toluene and xylene) which can be used to replace several fossil-based raw materials in the chemical sector. For example, methanol which currently comes from fossil-based sources.
3 What is the problem with producing sponge iron by competing methods, for example by using fossil-free hydrogen gas from sources other than forestry?
- There will be a market for any sponge iron produced in low-carbon ways. Any innovative manufacturing process that reduces emissions is welcome.
- The challenge of using competing methods that use fossil-free hydrogen from electrolysis as an input is that very large amounts of electricity are required to produce the gas.
4 You want to use forestry residues as your input. How will you secure access to this product?
- FerroSilva is working with Sveaskog who will supply us with forestry residues. The supply of forestry residues is much greater than our needs.
5 The price of forestry raw material, like other raw materials, tends to go up and down with the economy. In recent years, there have been dramatic fluctuations in
prices of wood products. Does this affect your operations and financial calculations?
- In our process, very little of the carbon-based raw material collected is consumed and the process therefore functions instead as a source of biogenic raw materials for other industries. The more the demand/price for this increases, the greater the industrial logic for FerroSilva.
- To a very small extent as our input is residual products from forestry – branches and tops (so-called “slash”) and stumps that are left over. We neither buy nor produce value-added goods from wood, and are therefore not exposed to the demand for value-added goods from wood.
6 Leaving leftover trees and branches from forestry operations in nature promotes biodiversity. Does your process harm biodiversity?
- There are also benefits to nature from harvesting residues. For example, the harvesting of sprouts often reduces nutrient leakage into waterways that contribute to eutrophication.
- The innovative FerroSilva process also offers the possibility of creating a carbon sink, negative emissions, which helps to reduce global emissions. Warming is a contributing cause of damage to biodiversity in Sweden and globally as a warmer climate provides conditions for the spread of invasive species and pests.
7 Depending on how forest management is carried out, it can affect everything from biodiversity, water quality, nutrient leakage to the resence of pests. How do you ensure that your suppliers practice low impact forestry?
- Our supplier Sveaskog follows the FSC standard, the only forest certification that has broad international support from the environmental movement. Sveaskog is also certified according to PEFC, a global certification system for sustainable forestry with a balance between production, environment and social interests.
8 How do your suppliers work specifically to ensure that biodiversity is not harmed?
- Sveaskog follows the research-based “best practice” methods for harvesting sprouts and stumps as expressed in the FSC standard. This includes saving parts of twig piles for insects and avoiding the harvesting of tree species other than spruce, pine and birch.
9 Is there enough residual biomass to expand your business?
- Yes, there is more than enough. In Sweden alone, from unutilised cut tops and branches in the forest, biomass decays and emits carbon dioxide equivalent to 55 TWh per year if it had been used for electricity generation. This is equivalent to more than a third of all electricity consumed in Sweden per year. Our first factory will use about 0.19 TWh of biomass per year, equivalent to 75 000 tonnes.
10 What does it take to get your first factory in place by 2026?
- Our manufacturing process has great potential but is still commercially untested. To reduce the commercial risk, the government plays an important role in the first phase by co-financing innovative new products and services. This is why we have applied for funding through Industriklivet. We have also applied for funding from the EU Innovation Fund. Within a year of our factory being in place, our assessment is to operate on a fully commercial basis.
11 Where will you build your factory?
- Our first factory is planned to be built in Hofors in Gävleborg. The plant will be located next to our partner Ovako’s steel production plant. At full capacity, we will produce 50 000 tonnes of sponge iron and 50 000 tonnes of liquid carbon dioxide.
12 Will you build more factories?
- The market for fossil-free sponge iron is growing rapidly. To meet even a small part of this demand, more production capacity will need to be put in place. At present, however, our focus is on starting our first factory.
13 Who owns FerroSilva
- FerroSilva is a Swedish company that is owned by us who sit in the management team.
14 Does your name, FerroSilva, mean or stand for something?
- Both parts of our name come from Latin. Ferro or Ferrum means iron and Silva means forest. Together they summarise what we do: iron from forest residues.
15 Is your manufacturing process secret?
- Our process is not patented but parts of our manufacturing process are a trade secret. Our business concept is mainly based on the fact that we are the first in the world to have commercialised this way of producing fossil-free sponge iron. By being the first on the market, we are well placed to offer a competitive product in a rapidly growing market.
16 If the benefits are so great, why has no one else produced fossil-free sponge iron in this way before you?
- The demand for fossil-free sponge iron is increasing year by year. A growing market makes it economically feasible to invest in new low-carbon manufacturing methods. Our production is based on several established and well-known chemical processes, which means there is low technical risk. However, this does not mean that they are easy to link together in a well-functioning production process. .
17 How big is the market for fossil-free sponge iron?
- Globally, about 2300 million tonnes of iron ore are produced per year, of which about 500 million tonnes are delivered as pellets. In the long term, all this production, which currently takes place in very emission-intensive ways, will have to switch to more low-carbon methods.
- At full production in our first factory, we will be able to meet about 0.1 per cent of global demand. With future production at a larger plant of about 500,000 tonnes, we could meet 0.5 percent of the needs of a rapidly growing market. We therefore see great opportunities for growth.
18 One by-product of your production is liquid carbon dioxide. Why would others want to buy carbon dioxide that contributes to climate change?
- Storing carbon dioxide means reducing emissions. Thanks to the EU Emissions Trading Scheme (EU ETS), there is a price on emissions. The more a company emits, the more they have to pay by buying emission allowances. Replacing fossil fuel emissions with carbon dioxide therefore has a direct economic value. In addition, there is a growing importance of utilising biogenic carbon dioxide in many industrial processes. This becomes particularly important when consumers demand fossil-free products.
- Finally, there is an emerging market for electrofuels, which is particularly important in combination with surplus energy primarily from wind power. Such fuels are relevant if they are based on biogenic and circular raw materials.
- It is also possible for companies to reduce their carbon footprint by buying carbon dioxide and storing it permanently in the ground. As the price of emission allowances increases, the economic incentive to buy and store carbon dioxide grows. Such carbon dioxide counts as ‘non-emitted’ in the Emissions Trading Scheme..
19 Your competitors are companies with hundreds or thousands of employees. How will FerroSilva, which is much smaller, compete against them?
- We have a more competitive product. This applies to both production costs and climate impact, and the product is carbonised for more efficient steel production. In addition, we supply biogenic products for industries that need them.
- FerroSilva is a young company, but we plan to grow rapidly to meet the high demand for sponge iron. FerroSilva also has close and important collaborations with several companies and partners that contribute to and facilitate our expansion. These include Ovako, which will be a key customer, as well as OX2 and Linde, which intend to buy some of the liquid biogenic carbon dioxide we will produce.
20 Are there any risks that your manufacturing process will not work when you scale it up in a first factory?
- No, we do not believe that there is a risk that the manufacturing process will not work on a larger scale. The only possible risk we can see is that running in and calibrating the manufacturing process will take more time than we currently anticipate.
- Most industrialmanufacturing processes need to go through a “run-in” period. However, we believe that our timetable, with a first factory in place in 2026, is very realistic.
21 Is FerroSilva dependent on public funding or is the company commercial?
- The feasibility study underlying FerroSilva’s manufacturing process was funded by the Swedish Energy Agency, Sveaskog, Lantmännen, Ovako, Uddeholm and Alleima, as well as KTH, Chalmers, M3advice and Kobolde.
- To build our first factory, we are relying on a combination of private and public funding. We believe that within one year of the factory being built, we will be able to stand firmly on a fully commercial basis.
22 How much of your funding currently comes from commercial actors and investors?
- We have applied for about half of the necessary amount for the construction of our first factory from the EU’s innovation fund and the Swedish Industriklivet programme. The rest of the funding will be sought from private and institutional investors who also recognise the potential of the iron and steel industry’s transformation..
23 Is FerroSilva listed on the stock exchange?
- We are not a listed company.
24 Can anyone invest in FerroSilva?
- Not at the moment. Right now we are mainly looking for investments from institutional investors.
25 Are you planning to become a listed company?
- There are currently no such plans.