Swedish Energy Agency grants SEK 390 million in support to Stegra
Stegra is building a large-scale production facility for low-carbon steel. The project has strong potential to accelerate the transition within the iron and steel industry. For this reason, the Swedish Energy Agency is now granting nearly SEK 390 million in funding to Stegra.
Industry transformation is crucial for Sweden to achieve its goal of becoming fossil-free by 2045. Stegra plans to construct an integrated steel plant where iron production will be powered by fossil-free hydrogen. The project, located in Boden, is expected to significantly speed up the shift towards a fossil-free Swedish iron and steel sector.
“Swedish industry is on a journey towards fossil-free operations. This transition will bring major benefits to Sweden, including increased competitiveness and reduced emissions. Companies are paving the way through innovation, new solutions and products. However, government support is essential for the industry to take the technological leaps required to succeed in this transformation,” says Caroline Asserup, Director General of the Swedish Energy Agency.
Approved by the European Commission
The funding of SEK 389,597,000 granted to Stegra falls under the Industrial Leap programme and has been approved by the European Commission. Stegra’s project previously received SEK 1.2 billion in support from the Industrial Leap. In an amendment application to the Swedish Energy Agency, Stegra requested an additional SEK 1.6 billion after being denied funding from the Climate Leap and therefore not receiving the full amount Sweden had notified and that had been approved by the European Commission. The Swedish Energy Agency assesses that the funding now granted is important to fulfil the state aid framework approved by the Commission as far as possible.
“The project’s objectives remain unchanged and continue to be vital for the transformation of the iron and steel industry. Stegra’s investment in innovative solutions represents a major technological leap. However, the budget within the Industrial Leap, based on the conditions set out in the appropriation directions, combined with Stegra’s previously granted support, means that just over SEK 389 million is the maximum additional funding that can now be approved,” says Klara Helstad, Deputy Head of Research, Innovation and Business Development at the Swedish Energy Agency.
As Stegra’s project has now progressed into the construction phase, the costs for completing the project have become more certain. The new funding from the Industrial Leap increases the likelihood that Stegra will secure the additional capital required, which is a prerequisite for completing the project. The support is conditional on the company demonstrating that it has secured sufficient capital to finalise the project by spring 2026.
About The Industrial Leap
The Industrial Leap supports research, innovation and investments in three areas to help achieve Sweden’s climate targets:
- Reducing greenhouse gas emissions from process industries.
- Negative emissions.
- Strategically important measures within industry that can help reduce emissions across society.
In 2022, the iron and steel industry accounted for just over one-third of Sweden’s total industrial emissions. Of these, approximately 81 per cent 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.
