Stegra’s financial struggles put Europe’s green steel ambitions to the test

The decarbonisation of steel is arguably one of the toughest frontiers in the energy transition: the sector accounts for roughly 7% of CO2 emissions worldwide, and while renewables have transformed the global power mix, heavy industry is still lagging behind. In 2020, Swedish start-up H2 Green Steel, which has since been renamed Stegra, was launched with an ambitious promise: to make carbon-free steel at scale using green hydrogen with its flagship plant in Boden, in Swedish Lapland. Backed by major investors, it embodied Europe’s industrial decarbonisation ambitions. But five years later, that vision is under strain. Stegra is facing a funding gap of up to €1.5 billion (£1.31bn $1.74bn), construction delays, and growing investor unease. As the company scrambles to raise new capital, the sector is watching closely. Whether investors step in or step back will send a powerful signal about the financial viability of green hydrogen-powered steel production.