Stegra (H2 Green Steel) is granted SEK 1.2 billion in state aid
The iron and steel industry is important for the Swedish economy, but is also emission-intensive. The Swedish Energy Agency is now granting Stegra, previously H2 Green Steel, state aid to build the world's first large-scale facility for low-carbon steel production.
Sweden aims to be fossil-free by 2045 and thereafter achieve negative emissions. As the industrial sector accounts for one-third of Sweden's fossil emissions, it is crucial that Swedish companies take active part in the green transition. The Swedish Energy Agency is now granting Stegra state aid to build the world's first fully integrated steel plant where iron is manufactured using fossil-free hydrogen made from water and fossil-free electricity. The state aid is provided through the Swedish government-initiated Industrial Leap programme and is approved by the European Commission.
“Swedish industrial companies have the potential to become world leaders while contributing to the green transition of society as a whole. Initiatives within the Industrial Leap are of great importance for both the climate and the competitiveness of our industry,” says Caroline Asserup, interim Director General at the Swedish Energy Agency.
93 per cent lower carbon dioxide impact
The steel plant will produce 2.1 million tonnes of sponge iron and 2.5 million tonnes of steel per year in the first phase. The plant will be the first of its kind and is central to full-scale industrial production of low-carbon steel.
“The Swedish support programmes are essential for the establishment of new large-scale industry in Sweden. The funds from the Industrial Leap signal that there is national backing for one of Sweden’s largest industrial projects. It also contributes to some levelling of the playing field, in relation to steel companies in Europe that have received large support packages. This creates the prerequisites for us to build up a long term sustainable and competitive industry in Sweden,” says Henrik Henriksson, CEO Stegra.
The plant is expected to manufacture steel with around 93 per cent lower carbon dioxide impact than traditional ore-based blast furnace production.
“The fact that this project is going up to full scale is important for a successful green transition of the Swedish steel industry. Achieving Sweden's climate goals requires technological leaps, which includes innovative and promising technologies,” says Klara Helstad, head of the Sustainable industry unit at the Swedish Energy Agency.
The new Stegra plant
The plant will be the world's first fully integrated steel mill with an about 700 MW electrolyser, continuous casting and rolling technology combined with hot charging for improved energy efficiency, and hydrogen storage. Fossil-free hydrogen produced on-site will replace the need for coking coal in the production process. The manufacturing process of iron will use fossil-free hydrogen, which in turn is produced from water and renewable electricity.
The Industrial Leap
The Industrial Leap is a government initiative run by the Swedish Energy Agency. The programme supports research, innovation and investment in three areas to help achieve climate objectives:
- reducing greenhouse gas emissions from the process industry
- negative emissions
- strategically important actions in industry that can help reduce greenhouse gas emissions in society.
In 2022, the iron and steel industry accounted for just over a third of total industrial emissions. Of these, approximately 81% were process related.
Since 2021, the Industrial Leap has been part of the EU's Recovery and Resilience Facility (RRF), which is a component of Next Generation EU.
