Sweden's hydrogen steel plant wins Google deal, then needs more cash

What happened

Stegra was founded in 2020 and began building its plant in Boden, in northern Sweden, in 2022. According to ESG Today, the company aims to produce 5 million tonnes of green steel a year. Instead of using coal to turn iron ore into iron, the plant will use hydrogen made with renewable electricity. Stegra estimates this can cut emissions by up to 95 percent compared with a traditional blast furnace. That figure is the company's own estimate.

On 17 September, Google announced that it would receive environmental attribute certificates linked to up to 91,000 tonnes of steel from Stegra's first year of production. Google said the deal is meant to create demand for low-emission materials and help finance early-stage technologies. The company estimates that its approach can reduce the embodied carbon of its data centre buildings by up to 40 percent. In 2025 it used low-carbon concrete, steel or both in more than 20 construction projects.

On 30 September, Stegra reported the results of a 100-day review carried out by its new board and outside advisers. A new group of owners had taken control in June 2026 after a 1.4 billion euro funding round led by Wallenberg Investments. The review found that the production timeline was unchanged and the business case was still strong. But it also found that the cost of completing the plant was well above the June estimate, and that more capital was needed.

Stegra blamed two main causes. One was the cost of ramping work back up after it had been scaled back for a long period earlier in 2026. The other was inflation. The company did not give figures. It said its largest shareholders had a positive view on helping to raise the money, and that talks with financiers and partners were continuing. Håkan Buskhe, a former head of the defence company Saab, becomes chief executive on 1 November 2026, replacing Henrik Henriksson.

The engineering behind it

Iron ore is mostly iron oxide, iron chemically joined with oxygen. To make steel, the oxygen must be removed. In a conventional blast furnace, coke made from coal does this job. The carbon in the coke combines with the oxygen and leaves as carbon dioxide. This is why traditional steelmaking produces large emissions. The chemistry cannot be fixed by using cleaner fuel for heating, because the carbon is part of the reaction itself.

Hydrogen can remove the oxygen instead. When hydrogen reacts with iron oxide, the by-product is water rather than carbon dioxide. Google describes Stegra's process this way: renewable electricity makes hydrogen, and the hydrogen reacts with iron ore to make iron. In general, hydrogen for this purpose is made by electrolysis, which splits water into hydrogen and oxygen using electricity. The solid iron produced is then usually melted, often in an electric arc furnace, and refined into steel.

Each step needs a lot of electricity. That is why plants of this type are sited where clean power is plentiful and cheap. The method also needs high-grade iron ore, large electrolysers and new equipment that is less proven at full scale than the blast furnace. These are general features of hydrogen steelmaking. The press releases for this story do not describe the plant's equipment in detail.

The word green also needs a definition. Google says Stegra's steel is designed to meet the International Energy Agency's definition of near-zero emissions steel production. Definitions like this matter because buyers need a common test for claims. Google's deal also uses certificates rather than physical delivery. In general, this kind of arrangement lets a buyer pay for the lower-emission qualities of a product, and claim them, even when the steel itself goes to another customer. It helps a new plant find paying demand early.

What it means in Nepal

The sources say nothing about Nepal, so this section is about the skills involved. Steel and concrete are the two materials civil engineers specify most often. Both carry large amounts of embodied carbon, which is the carbon released in making and delivering a material before the building is used. Large clients, such as Google in this case, now set targets for that embodied carbon and look for ways to reduce it in their buildings.

This means engineers are increasingly asked to measure and report embodied carbon as well as cost and strength. A designer may compare a steel frame with a concrete one, or a lighter section with a heavier one, partly on carbon. Using less material through efficient design is often the simplest way to cut emissions, whatever the steel is made from. Reusing steel members and choosing recycled steel are other options that an engineer can weigh at the design stage.

The Stegra story also shows that a sound technical idea does not guarantee a smooth project. A plant can have a clear process and committed customers and still face higher costs from delays and inflation. Engineers who understand cost estimating, cash flow and the effect of stopping and restarting work are valuable on any large project, from a steel plant to a hydropower scheme or a highway.