Steel production accounts for around 8% of the world’s carbon emissions, with nearly 2 billion metric tons produced annually. Traditional steelmaking emits about two tons of carbon dioxide per ton of steel. However, Stegra, a Swedish startup, is pioneering green steel production. They’ve raised close to $7 billion to build the world’s first industrial-scale green steel plant in Boden, Sweden. This facility will use green hydrogen, produced from renewable energy, to process iron ore into steel, aiming to start production in 2026 with an initial output of 2.5 million metric tons per year, eventually scaling up to 4.5 million. The plant will consume 10 terawatt-hours of electricity annually, equivalent to a small country’s usage. Stegra has already secured contracts for 1.2 million metric tons of steel over the next five to seven years, with buyers including major automotive companies. Despite the higher initial cost, the European Union’s Carbon Border Adjustment Mechanism (CBAM) could make green steel economically viable. Stegra’s approach, while promising, faces challenges in scaling up and reducing costs to compete with conventional steel production.
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