Stegra
Assembly Line
The world’s first industrial-scale plant for green steel promises a cleaner future
A handful of groups and companies are now making serious progress toward low- or zero-emission steel. Among them, the Swedish company Stegra stands out. (Originally named H2 Green Steel, the company renamed itself Stegra—which means “to elevate” in Swedish—in September.) The startup, formed in 2020, has raised close to $7 billion and is building a plant in Boden, a town in northern Sweden. It will be the first industrial-scale plant in the world to make green steel. Stegra says it is on track to begin production in 2026, initially producing 2.5 million metric tons per year and eventually making 4.5 million metric tons.
This process of using hydrogen to make iron—and subsequently steel—has already been used at pilot plants by Midrex, an American company from which Stegra is purchasing the equipment. But Stegra will have to show that it will work in a far larger plant. Stegra’s process is very similar to the standard direct reduction technique, except that since it uses only hydrogen, it needs a higher temperature. It’s not the only possible way to make steel with a negligible carbon footprint, but it’s the only method on the verge of being used at an industrial scale.
Stegra’s business model is made possible in part by the unique economic conditions within the European Union. In December 2022, the European Parliament approved a tariff on imported carbon-intensive products such as steel, known as the Carbon Border Adjustment Mechanism (CBAM). As of 2024, this law requires those who import iron, steel, and other commodities to report the materials’ associated carbon emissions. Starting in 2026, companies will have to begin paying fees designed to be proportional to the materials’ carbon footprint. Some companies are already betting that it will be enough to make Stegra’s 30% premium worthwhile.