Green hydrogen-based steel producer Stegra has secured a €100m ($111.7m) grant from the Swedish Energy Agency to drive forward the development of its inaugural plant in Boden, Sweden.
Expected to start green steel production in 2026, the Boden facility will boast 690MW of electrolysis capacity, a direct reduced iron (DRI) plant, two electric arc furnaces and cold rolling and finishing facilities, to deliver five million tonnes of steel per year by 2030.
By using green hydrogen in the DRI process, Stegra says it can reduce the carbon dioxide (CO2) emissions of steel production by around 95% compared to traditional blast furnace-based production.
Read more: Will DRI be key to producing sustainable steel?
With the funding coming from the Industrial Leap fund, set up through the Swedish climate law, Stegra producer says the project will avoid 28kg of carbon dioxide (CO2) per Swedish Krona of support.
“No other Swedish project achieves as big positive climate impact per invested support krona as Strega,” the company, previously known as H2 Green Steel, claimed.
CEO, Henrik Henriksson, said the latest funding contributes to a levelling of the playing field with “steel companies in Europe that have received large support packages.”
The European Commission in June approved €265m ($296m) of funding for the Boden plant.
“This creates a prerequisite for us to build up a long-term sustainable and competitive industry in Sweden,” Henriksson added.
In January this year, Stegra signed €4.2bn ($4.61bn) of debt financing agreements for the plant, having pre-sold its green steel output to buyers including Volvo Group, Porshe, ZF and more – taking its financial close package to €6.5bn ($7.26bn).
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