News Release

September 7, 2023

Inauguration of the fossil-free hydrogen plant in Ovako
Inauguration ceremony held in the presence of Swedish Prime Minister
On September 5, 2023, Ovako, our European special steel manufacturing affiliate, has inaugurated fossilfree hydrogen plant built at Hofors mill in Sweden, and held a ceremony in the presence of Swedish Prime
Minister Ulf Kristersson and many other prominent guests.
This plant will generate about 4,000m3 of fossil-free hydrogen per hour through electrolysis of water using
fossil-free electricity. By using fossil free hydrogen produced at this plant as fuel for production of specialsteel, Ovako will be able to significantly reduce CO2 emissions from the process of heating steel before
rolling at Hofors mill.
In line with the increasing importance to mitigate climate change in the world, Sanyo Special Steel Groupwill further promote reduction of CO2 emissions and attainment of carbon neutrality in its global businessactivities including Ovako in Europe and SSMI in India.

Ulf Kristersson, Swedish Prime
Minister(center),
Katsuhiro
Miyamoto, President of Sanyo (left),and Marcus Hedblom, Ovako CEO(right) at the inauguration ceremony.

Ulf Kristersson, Swedish
Prime Minister (right) andOvako officers starting up thehydrogen plant (from left:Marcus
HedblomCEO,
Rickard Qvarfort Head ofBusiness
UnitHofors
Hellefors,andKatsuhiro
Miyamoto President of Sanyo)

In his speech at the ceremony, Prime
Minister Kristersson praised Ovako's
initiative, saying, "What Ovako isaccomplishing here today is a crucial
step – this is green transition in action,
not just words''.

Ovako plays an important role in recycling steel resources in the European region through its specialty steelmanufacturing business, which mainly uses steel scrap. They have also promoted world-leading initiatives tominimize CO2 emissions and have reduced its own steel production-generated emissions by 58% since 2015.
In April 2020, at its Horfors mill, Ovako became the first steelmaker in the world to succeed in heating steel prior torolling using hydrogen as fuel, and in June 2021, they began to construct a plant that produce fossil-free hydrogenfor practical application. Furthermore, In January 2022, Ovako has started its carbon neutral production by offsetting
the remaining CO2 emissions with the carbon offset program in use and has begun providing green steel.
The new fossil-free hydrogen plant is one of the largest facilities inEurope, realized with support of the Swedish Energy Agency andcollaboration with local key players such as the Volvo Group,Hitachi Energy, H2 Green Steel, and Nel Hydrogen. By convertingfrom the LPG currently used as heating furnace fuel to fossil-freehydrogen, Ovako will be able to reduce CO2 emissions in steel
production by approximately 50% (about 20 thousand tons
annually) at Hofors mill. In addition, this technical solution will be
the first step in development of hydrogen infrastructure that can beutilized in the transport sector; for example, development of fossilfree freight transportation using fuel cell-powered trucks. The
solution is also expected to contribute to improving stability of thepower grid. Moreover, the residual heat can be utilized in local area
heating networks.

Electrolyzer of Hydrogen plant of Ovako

Based on the knowledge gained from the operation of this fossil-free hydrogen plant, Ovako will consider to actively
implement local hydrogen production in all units toward 2030 and will promote initiatives to mitigate climate change.

END
For inquiries: Sanyo Special Steel Co., Ltd., (Phone: +81 79-235-6002)