Insulation and building materials manufacturer Kingspan has announced an investment in H2 Green Steel, a company which is pioneering new green production methods for steel manufacturing using hydrogen.
The building and infrastructure sectors are the biggest users of steel, accounting for 52% of global demand, compared to 12% from the car industry.
Steel accounts for 7% of emissions emitted globally.
Kingspan is investing in a Series A equity fundraising round due to close later this month.
Earlier announced investors in the fundraising include Scania, Vargas and the IMAS Foundation - a sister foundation to the INGKA Foundation, the owner of INGKA Group, who owns and operates the majority of IKEA stores around the world.
Kingspan said its investment reflects an intention to enter into a long-term supply agreement with H2 Green Steel to supply a substantial share of Kingspan's future steel requirements.
Co Cavan-based Kingspan is the first building materials company globally to make a commitment to procure H2 Green Steel at scale.
It said the new deal is an important element in its Planet Passionate sustainability strategy, its decarbonisation programme which aims to halve carbon intensity in Kingspan's primary supply chain.
The strategy also aims to reduce its manufacturing carbon emissions to as close to zero as technically possible.
H2 Green Steel's production process replaces coke and coal with green hydrogen to achieve an almost a totally CO2-free steel product.
The process abates about 95% of the CO2 emissions associated with traditional blast furnaces steel makers - one tonne of H2GS steel will emit less than 0.1 tonne of CO2 compared to more than two tonnes of CO2 emitted producing a traditional tonne of steel.
The green hydrogen gas is produced by electrolysis using electricity generated from hydropower and wind power which is plentiful in the Boden-Luleå region in Sweden where the company is building the world's first large-scale green steel production site.
Production will start in 2024, and by 2030 the plant will be producing 5 million tonnes of green steel annually.
Kingspan said that moving to use of only low emissions steel would see it reduce embodied carbon in its insulated panel products by approximately over 45%.
It would also make a substantial contribution towards Kingspan's 2030 goal of cutting scope three emissions from its supply chain by 50%.
Gene Murtagh, CEO of Kingspan Group, said that the building industry is a major user of steel, and steel production is a major source of carbon emissions.
Mr Murtagh said it is clear that Kingspan's Planet Passionate commitment to reduce emissions in its primary supply chain must include a new model of steel production.
"We have set ourselves the challenging target of reducing emissions from the primary raw materials we use in manufacturing by 50% by 2030, and H2 Green Steel offers a compelling route to achieving this goal," the CEO said.
"We recognise that for companies to make a meaningful contribution to address the climate crisis they need to be prepared for radical thinking and actions, and our determination to transform our supply chain reflects this," he added.
