Published: Aug 07, 2026 | By: Aldrich Ma

Hydnum Steel, a Spanish green steel developer, has secured a €150 million ($173 million) investment commitment from the Spanish state-owned co-investment fund (FOCO), managed by COFIDES, to build the Iberian Peninsula’s first large-scale green steel plant. The facility will be located in Puertollano, Spain, and will be powered by green hydrogen, marking a significant step forward in the country’s industrial decarbonization strategy.

The €150 million commitment forms part of a broader financing plan that aims to mobilise more than €1.5 billion in total investment. Of this amount, approximately €600 million will be equity capital and nearly €1 billion will be debt financing. The project is expected to generate more than 5,000 jobs, providing a substantial boost to the local economy in the Puertollano region.

Once operational, the plant will have an annual production capacity of 2.7 million tonnes of green steel, produced using hydrogen-based direct reduction technology (DRI) instead of traditional coal-fired blast furnaces. This approach drastically reduces carbon emissions, aligning with the European Union’s ambitious climate targets and the global push toward sustainable steelmaking.

This investment is part of a broader trend among European steelmakers transitioning to low-carbon production. Across the continent, companies are investing heavily in hydrogen-based steelmaking, electric arc furnaces, and renewable energy to meet tightening environmental regulations and growing customer demand for green materials.

For steel traders and suppliers, this development signals a structural shift in the industry. As green steel production scales up, demand for high-quality raw materials – such as iron ore pellets suitable for DRI, scrap steel for EAFs, and specialized steel pipes and structural sections for hydrogen infrastructure – is expected to rise. Suppliers that can demonstrate sustainable sourcing and traceability will be well-positioned to capture this emerging market.

Hydnum Steel’s Puertollano project represents more than just a single investment; it is a clear signal that the green steel transition is accelerating in Southern Europe. With Spain positioning itself as a leader in hydrogen-based industrial production, this project could serve as a blueprint for similar initiatives across the region.