Ingka Group, the largest IKEA retailer, announces it has signed an agreement with H2 Green Steel for the delivery of green steel, to be used in IKEA warehouse racking. The agreement forms part of Ingka Group’s ongoing action to reduce its climate footprint and will account for 50 percent of warehouse racking purchased globally.

Steel is one of the biggest contributors to global GHG emissions (7 percent) and is responsible for 25 percent of Europe’s industrial CO₂ emissions^[1]. For Ingka Group, warehouse racking – used to store everyday home furnishing items – is an important and critical part of its store warehouse operations, of which half will begin to be replaced by green steel.

“The innovation of companies like H2 Green Steel holds great potential for a positive business and climate impact. We are delighted to announce this agreement, as we also want to inspire other businesses to follow. Significant steel volumes from our warehouse racking business will contain green steel. Such improvements will allow us to transition from traditional steel to less carbon-intensive and can support us in reducing carbon emissions in this category by up to 95 percent^[2]“, says Karen Pflug, Chief Sustainability Officer, Ingka Group.

“We don’t have to wait till all the solutions are ready – we want to take steps now that will contribute to transforming the industry. If more companies who use steel move to source green steel, it would have a significant impact on global greenhouse gas emissions. We want to contribute to driving this change, with the intention to increase the volumes in the future,” she says.

The commitment to secure high-quality green steel that has dramatically reduced carbon emissions aligns with the IKEA ambition to become climate positive by 2030*. Across Ingka Group’s retail operations each country has annual energy action plans for every building to improve energy efficiency, including upgrading building management systems, improving insulation and using energy recovery from renewable heating and cooling.

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“Working together with customers like Ingka Group is the foundation for how we build our company. Progressive first mover customers drive the demand for green steel and help us show others that it’s possible to transform the steel industry on an accelerated timeline. The traditional heavy polluting blast furnaces which use coal and coke are replaced by direct reduction processes that use green hydrogen instead. That means that instead of carbon emissions, the main biproduct in our process is clean steam”, says Henrik Henriksson, CEO of H2 Green Steel.

IKEA is taking action to transform its business and has committed to the Paris Agreement and doing its part to limit the global temperature rise to 1.5°C above pre-industrial levels*. IKEA is already taking responsibility for its emissions, reducing its climate footprint in line with science, committing to becoming a circular business, and enabling customers to live more healthy and sustainable lives. In February Ingka Group announced a reduction in its total climate footprint (scope 1, 2 and 3), achieving a decrease of 13.6 percent from baseline year FY16.

The signed agreement between Ingka Procurement AB and H2 Green Steel will come into effect from 2026. The green steel will be produced at H2 Green Steel’s new plant in Boden, northern Sweden, where it will start production end of 2025 and will be implemented in IKEA stores from 2026.

*IKEA climate positive means to reduce more greenhouse gas (GHG) emissions than the IKEA value chain emits by 2030, while growing the IKEA business. IKEA is committed to the Paris Agreement and to contribute to limiting the global temperature rise to 1.5°C above pre-industrial levels. This includes a commitment to halve the absolute net GHG emissions from the total IKEA value chain by 2030. We will achieve this by drastically reducing GHG emissions through science-based targets and by removing carbon from the atmosphere through natural processes and storing it in land, plants and products through better forest and agriculture management within the IKEA value chain. We will contribute to further greenhouse emission reductions in society by going beyond IKEA, such as enabling customers to generate renewable energy at home.

^[1] EU climate targets: How to decarbonise the steel industry – A report by the European Commission’s Joint Research Centre

^[2] H2 Green Steel – The comparison considers direct Scope 1 and indirect Scope 2 emissions as per the GHG protocol. Due to plant-specific variations, Scope 3 emissions are excluded from this comparison. https://www.h2greensteel.com/