Green steel has spent a decade as a pitch. In Boden, Sweden, it’s now a building site with a 100-meter tower. Stegra, the company once known as H2 Green Steel, just locked in about EUR1.4 billion in fresh financing to finish its hydrogen-based plant, and it’s targeting first output this year.
For an industry that treats most decarbonization claims with a raised eyebrow, this one is getting close enough to test.
How the green steel process actually works
The plant’s trick is swapping coal for renewable hydrogen in the direct-reduction step that turns iron ore into sponge iron. A 690 MW electrolyzer, built with thyssenkrupp nucera technology, splits water using renewable power. The hydrogen then strips oxygen from the ore in a Midrex direct-reduction tower, and the resulting sponge iron gets melted in an electric arc furnace running on clean electricity. Stegra puts the carbon cut at about 95% against a conventional blast furnace.
That’s the engineering. The construction story is the part that’s moved fastest. The final electrolyzer module is in, and the DRI tower has passed the 100-meter mark, the kind of physical progress that’s hard to fake on an investor call.
Why builders should care about green steel
Steel is one of the heaviest sources of embodied carbon in any structure, so a 95% reduction at the mill changes the math on whole-building emissions. The demand signal is already here. Microsoft has agreed to take Stegra steel for its data centers, which links low-carbon steel straight to the most aggressive construction segment going. As hyperscale data-center campuses multiply, their owners are exactly the buyers with the budgets and the climate targets to pay a premium for clean material.
Stegra plans to scale toward 2.5 million tonnes by 2028 and 5 million by 2030, the second phase still to be funded. That’s meaningful volume, though small against global output measured in the billions of tonnes.
The reality check
A green premium only sticks if buyers keep paying it, and the economics aren’t universal yet. Tariff-distorted markets don’t help either, with U.S. steel tariffs at 50% scrambling price signals across the Atlantic. Still, the gap between “green steel is coming” and “green steel is shipping” just got a lot narrower. Watch whether 2026 output actually lands on schedule. First heat from the electric arc furnace is the milestone that turns this from a promising project into a working supply chain.