STOCKHOLM (BLOOMBERG) - A startup called H2 Green Steel will build a large fossil-free steel plant in northern Sweden as the industry seeks new ways of curbing carbon emissions.

The plant will start production by 2024 and will have a capacity of 5 million tons by the end of this decade, the company said on Tuesday (Feb 23) in a statement.

The project includes a green hydrogen plant as an integrated part of the steel factory. The company is backed by Vargas Holding AB, one of the first shareholders in battery maker Northvolt AB.

Total financing for the first phase of the project is about 2.5 billion euros (S$4.01 billion), which will be raised through a combination of equity and green project financing. Morgan Stanley, Societe Generale SA and KfW IPEX-Bank are acting as financial advisers to H2GS.