Swedish Prime Minister Prime Minister Stefan Lofven, Bengt Kjell, Chairman of the Board SSAB, Marten Gornerup, CEO Hybrit, Jan Mostrom, CEO LKAB, Magnus Hall, CEO Vattenfall, Martin Lindqvist, CEO SSAB, Réni Kolessar, Research Director of Energy Agency and Isabella Lovin Minister for International Development Cooperation and Climate, and Deputy Prime Minister, from left, take part in a ceremony marking the construction of pilot plant for fossil-free steel production, a collaboration between LKAB, Vattenfall and SSAB, in the SSAB industrial area in Lulea, Sweden Wednesday June 20, 2018. Sweden has started construction on a factory in the northeastern town of Lulea that will test whether it’s feasible to make steel without burning fossil fuels. (Gustav Sjöholm/TT via AP)

Swedish Prime Minister Prime Minister Stefan Lofven, Bengt Kjell, Chairman of the Board SSAB, Marten Gornerup, CEO Hybrit, Jan Mostrom, CEO LKAB, Magnus Hall, CEO Vattenfall, Martin Lindqvist, CEO SSAB, Réni Kolessar, Research Director of Energy Agency and Isabella Lovin Minister for International Development Cooperation and Climate, and Deputy Prime Minister, from left, take part in a ceremony marking the construction of pilot plant for fossil-free steel production, a collaboration between LKAB, Vattenfall and SSAB, in the SSAB industrial area in Lulea, Sweden Wednesday June 20, 2018. Sweden has started construction on a factory in the northeastern town of Lulea that will test whether it’s feasible to make steel without burning fossil fuels. (Gustav Sjöholm/TT via AP)

BERLIN (AP) — Sweden has started construction on a factory that will test whether it’s feasible to make steel without burning fossil fuels.

Utility firm Vattenfall said Tuesday it has teamed up with steel company SSAB and mining firm LKAB to build the 1.4-billion Swedish krona ($158 million) pilot plant.

Existing plants produce large amounts of carbon dioxide, a greenhouse gas, when coal is used to turn iron into hardened steel.

The new factory being built in the northeastern town of Lulea by 2020 will use hydrogen instead of coal and coke. The companies’ joint venture, called HYBRIT, aims to have an industrial process in place by 2035.

Vattenfall said the technology could potentially cut Sweden’s total carbon dioxide emissions by ten percent, helping meet the country’s goals under the Paris climate accord.