Ingka Group (IKEA) and H2 Green Steel sign agreement for the supply of green steel across its warehouse operations

14 September 2023

Ingka Group, the world's largest IKEA retailer, has entered into an agreement with H2 Green Steel for the supply of green steel, which will be used in IKEA warehouse racking systems. This initiative is part of Ingka Group's ongoing efforts to reduce its carbon footprint and will account for 50 percent of the warehouse racking purchased globally.

Steel production is a major contributor to global greenhouse gas emissions, responsible for approximately 7 percent of these emissions. It also accounts for 25 percent of Europe's industrial carbon dioxide (CO2) emissions. By partnering with H2 Green Steel, Ingka Group aims to replace traditional steel with green steel in half of its warehouse racking systems, thereby significantly reducing its carbon emissions.

Karen Pflug, Chief Sustainability Officer at Ingka Group, highlighted the potential positive impact of innovative companies like H2 Green Steel on both business and climate goals. She expressed the company's commitment to inspire other businesses to follow suit in sourcing green steel for their operations. By incorporating green steel into its warehouse racking systems, Ingka Group aims to reduce carbon emissions in this category by up to 95 percent.

Pflug emphasized the urgency of taking action now to drive change within the industry and reduce global greenhouse gas emissions. Encouraging more companies that rely on steel to source green steel could have a significant and positive impact on emissions reduction.

The commitment to using high-quality green steel with significantly reduced carbon emissions aligns with IKEA's broader ambition to become climate positive by 2030. Ingka Group is actively pursuing various measures to improve energy efficiency and reduce emissions in its retail operations, including upgrading building management systems, enhancing insulation, and utilizing renewable heating and cooling systems.

Henrik Henriksson, CEO of H2 Green Steel, underscored the importance of collaboration with forward-thinking customers like Ingka Group in driving the demand for green steel. He explained that H2 Green Steel's production process relies on green hydrogen instead of carbon-intensive sources like coal and coke, resulting in clean steam as the main byproduct.

IKEA has committed to aligning with the Paris Agreement and is actively working to limit global temperature increases to 1.5°C above pre-industrial levels. The company is reducing its carbon footprint, adopting circular business practices, and encouraging customers to live more sustainably. Earlier, Ingka Group announced a 13.6 percent reduction in its total climate footprint (covering scope 1, 2, and 3 emissions) from its baseline year in FY16.

The agreement between Ingka Procurement AB and H2 Green Steel will become effective in 2026. Green steel production will take place at H2 Green Steel's new plant in Boden, northern Sweden, with production starting at the end of 2025. Implementation of green steel in IKEA stores will commence in 2026.