Norwegian company Blastr Green Steel plans to invest €4bn in a Finnish steel mill with an integrated hydrogen production facility, the Bloomberg news agency reports.

Blastr signed a letter of intent with Finnish state-owned utility Fortum giving access to land on an existing industrial estate in the coastal town of Inkoo, about 30km west of Helsinki.

The company was founded in 2021 with backing from Nordic investment company Vanir Green Industries, which specialises in low carbon projects. As well as the Finnish scheme, it is planning a pellet plant on Norway’s Atlantic coast, with the aim of producing 2.5 million tons of hot and cold-rolled steel coils a year, beginning in 2026.

The plan, which has not yet secured finance, is to use local iron ore deposits and renewable energy based on wind power to reduce the plant’s carbon output to 5% of traditional plants.

Hans Fredrik Wittusen, Blastr’s chief executive, said Finland was an ideal location as it had “an ambitious low-carbon target, supportive and predictable operating conditions for the green industry, fossil-free energy and a highly qualified workforce”.

He added: “Inkoo was selected due to its high-quality infrastructure and access to clean power. In addition, the ice-free deep-sea harbour enables efficient, low-carbon logistics all year round and close access to the European market.”

The final investment decision is due in the beginning of 2025.