As of 2023, almost 2 billion metric tons of it have been being produced yearly, sufficient to cowl Manhattan in a layer greater than 13 ft thick.
Making this steel produces an enormous quantity of carbon dioxide. General, steelmaking accounts for round 8% of the world’s carbon emissions—one of many largest industrial emitters and way over such sources as aviation. The most typical manufacturing course of yields about two tons of carbon dioxide for each ton of metal.
A handful of teams and firms at the moment are making severe progress towards low- or zero-emission metal. Amongst them, the Swedish firm Stegra stands out. (Initially named H2 Inexperienced Metal, the corporate renamed itself Stegra—which suggests “to raise” in Swedish—in September.) The startup, fashioned in 2020, has raised near $7 billion and is constructing a plant in Boden, a city in northern Sweden. It is going to be the primary industrial-scale plant on the earth to make inexperienced metal. Stegra says it’s on monitor to start manufacturing in 2026, initially producing 2.5 million metric tons per 12 months and ultimately making 4.5 million metric tons.
The corporate makes use of so-called inexperienced hydrogen, which is produced utilizing renewable power, to course of iron ore into metal. Positioned in part of Sweden with ample hydropower, Stegra’s plant will use hydro and wind energy to drive a large electrolyzer that splits water to make the hydrogen. The hydrogen gasoline will then be used to tug the oxygen out of iron ore to make metallic iron—a key step in steelmaking.
This means of utilizing hydrogen to make iron—and subsequently metal—has already been used at pilot crops by Midrex, an American firm from which Stegra is buying the gear. However Stegra must present that it’s going to work in a far bigger plant.
The world produces about 60,000 metric tons of metal each quarter-hour.
“Now we have a number of steps that haven’t actually been confirmed at scale earlier than,” says Maria Persson Gulda, Stegra’s chief expertise officer. These steps embody constructing one of many world’s largest electrolyzers.
Past the unknowns of scaling up a brand new expertise, Stegra additionally faces severe enterprise challenges. The metal trade is a low-margin, intensely aggressive sector through which firms win prospects largely on worth.
STEGRA
As soon as operations start, Stegra calculates, it could possibly come near producing metal on the identical value as the traditional product, largely because of its entry to low-cost electrical energy. Nevertheless it plans to cost 20% to 30% extra to cowl the €4.5 billion it can take to construct the plant. Gulda says the corporate has already bought contracts for 1.2 million metric tons to be produced within the subsequent 5 to seven years. And its most up-to-date prospects—resembling automobile producers looking for to cut back their carbon emissions and market their merchandise as inexperienced—have agreed to pay the 30% premium.
Now the query is: Can Stegra ship?
The key of hydrogen
To make metal—an alloy of iron and carbon, with a couple of different components thrown in as wanted—you first must get the oxygen out of the iron ore dug from the bottom. That leaves you with the purified steel.
The most typical steelmaking course of begins in blast furnaces, the place the ore is combined with a carbon-wealthy coal spinoff referred to as coke and heated. The carbon reacts with the oxygen within the ore to supply carbon dioxide; the steel left behind then enters one other kind of furnace, the place extra oxygen is pressured into it below excessive warmth and strain. The gasoline reacts with remaining impurities to supply numerous oxides, that are then eliminated—leaving metal behind.
The second standard methodology, which is used to make a a lot smaller share of the world’s metal, is a course of referred to as direct discount. This normally employs pure gasoline, which is separated into hydrogen and carbon monoxide. Each gases react with the oxygen to tug it out of the iron ore, creating carbon dioxide and water as by-products.
The iron that continues to be is melted in an electrical arc furnace and additional processed to take away impurities and create metal. General, this methodology is about 40% decrease in emissions than the blast furnace approach, however it nonetheless produces over a ton of carbon dioxide for each ton of metal.
However why not simply use hydrogen as an alternative of beginning with pure gasoline? The one by-product can be water. And if, as Stegra plans to do, you utilize inexperienced hydrogen made utilizing clear energy, the result’s a brand new and promising method of constructing metal that may theoretically produce near zero emissions.
Stegra’s course of is similar to the usual direct discount approach, besides that because it makes use of solely hydrogen, it wants a better temperature. It’s not the one attainable option to make metal with a negligible carbon footprint, however it’s the one methodology on the verge of getting used at an industrial scale.
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Stegra has laid the foundations for its plant and is placing the roof and partitions on its metal mill. The primary gear has been put in within the constructing the place electrical arc furnaces will soften the iron and churn out metal, and work is underway on the ability that may home a 700-megawatt electrolyzer, the most important in Europe.
To make hydrogen, purify iron, and produce 2.5 million metric tons of inexperienced metal yearly, the plant will devour 10 terawatt-hours of electrical energy. This can be a large quantity, on par with the annual utilization of a small nation resembling Estonia. Although the prices of electrical energy in Stegra’s agreements are confidential, publicly obtainable knowledge counsel charges round €30 ($32) per megawatt-hour or extra. (At that charge, 10 terawatt-hours would value $320 million.)
STEGRA
Lots of the consumers of the premium inexperienced metal are within the automotive trade; they embody Mercedes-Benz, Porsche, BMW, Volvo Group, and Scania, a Swedish firm that makes vans and buses. Six firms that make furnishings, home equipment, and building materials—together with Ikea—have additionally signed up, as have 5 firms that purchase metal and distribute it to many alternative producers.
A few of these automakers—together with Volvo, which is able to purchase from Stegra and rival SSAB—are advertising and marketing vehicles made with the inexperienced metal as “fossil-free.” And since vehicles and vans even have many components which might be far more costly than the metal they use, metal that prices the automakers a bit extra provides solely a little bit to the price of a automobile—maybe a few hundred {dollars} or much less, in keeping with some estimates. Many firms have additionally set inner targets to cut back emissions, and shopping for inexperienced metal can get them nearer to these targets.
Stegra’s enterprise mannequin is made attainable partially by the distinctive financial situations inside the European Union. In December 2022, the European Parliament authorised a tariff on imported carbon-intensive merchandise resembling metal, often known as the Carbon Border Adjustment Mechanism (CBAM). As of 2024, this legislation requires those that import iron, metal, and different commodities to report the supplies’ related carbon emissions.
Beginning in 2026, firms must start paying charges designed to be proportional to the supplies’ carbon footprint. Some firms are already betting that it is going to be sufficient to make Stegra’s 30% premium worthwhile.
STEGRA
Although the legislation may incentivize decarbonization inside the EU and for these importing metal into Europe, inexperienced steelmakers will most likely additionally want subsidies to defray the prices of scaling up, says Charlotte Unger, a researcher on the Analysis Institute for Sustainability in Potsdam, Germany. In Stegra’s case, it can obtain €265 million from the European Fee to assist construct its plant; it was additionally granted €250 million from the European Union’s Innovation Fund.
In the meantime, Stegra is working to cut back prices and beef up revenues. Olof Hernell, the chief digital officer, says the corporate has invested closely in digital merchandise to enhance effectivity. For instance, a semi-automated system can be used to extend or lower utilization of electrical energy in keeping with its fluctuating worth on the grid.
Stegra realized there was no refined software program for retaining monitor of the emissions that the corporate is producing at each step of the steelmaking course of. So it’s making its personal carbon accounting software program, which it can quickly promote as a part of a brand new spinoff firm. This kind of accounting is ultra-important to Stegra, Hernell says, since “we ask for a fairly vital premium, and that premium lives solely inside the promise of a low carbon footprint.”
Not for everybody
So long as CBAM stays in place, Stegra believes, there can be greater than sufficient demand for its inexperienced metal, particularly if different carbon pricing initiatives come into power. The corporate’s optimism is boosted by the truth that it expects to be the primary to market and anticipates prices coming down over time. However for inexperienced metal to have an effect on the market extra broadly, or keep viable as soon as a number of firms start making vital portions of it, its manufacturing prices will ultimately need to be aggressive with these of standard metal.
Stegra has bought contracts for 1.2 million metric tons of metal to be produced within the subsequent 5 to seven years.
Even when Stegra has a promising outlook in Europe, its hydrogen-based steelmaking scheme is unlikely to make financial sense in lots of different locations on the earth—no less than within the close to future. There are only a few areas with such a lot of clear electrical energy and easy accessibility to the grid. What’s extra, northern Sweden can be wealthy in high-quality ore that’s straightforward to course of utilizing the hydrogen direct discount methodology, says Chris Pistorius, a metallurgical engineer and co-director of the Heart for Iron and Steelmaking Analysis at Carnegie Mellon College.
Inexperienced metal could be comprised of lower-grade ore, says Pistorius, “however it does have the unfavorable results of upper electrical energy consumption, therefore slower processing.”
Given the EU incentives, different hydrogen-based metal crops are within the works in Sweden and elsewhere in Europe. Hybrit, a inexperienced metal expertise developed by SSAB, the mining firm LKAB, and the power producer Vattenfall, makes use of a course of just like Stegra’s. LKAB hopes to complete an illustration plant by 2028 in Gällivare, additionally in northern Sweden. Nonetheless, progress has been delayed by challenges in getting the mandatory environmental allow.
In the meantime, an organization referred to as Boston Steel is working to commercialize a distinct approach to interrupt the bonds in iron oxide by operating a present by way of a combination of iron ore and an electrolyte, creating extraordinarily excessive warmth. This electrochemical course of yields a purified iron steel that may be became metal. The expertise hasn’t been proved at scale but, however Boston Steel hopes to license its inexperienced metal course of in 2026.
Understandably, these new applied sciences will value extra at first, and shoppers or governments must foot the invoice, says Jessica Allen, an knowledgeable on inexperienced metal manufacturing on the College of Newcastle in Australia.
In Stegra’s case, each appear keen to take action. However it is going to be harder exterior the EU. What’s extra, producing sufficient inexperienced metal to make a big dent within the sector’s emissions will doubtless require a portfolio of various methods to succeed.
Nonetheless, as the primary to market, Stegra is taking part in a significant position, Allen says, and its efficiency will colour perceptions of inexperienced metal for years to come back. “Being keen to take a danger and really construct … that’s precisely what we want,” she provides. “We want extra firms like this.”
For now, Stegra’s plant—rising from the boreal forests of northern Sweden—represents the trade’s main effort. When it begins operations in 2026, that plant would be the first demonstration that metal could be made at an industrial scale with out releasing massive quantities of carbon dioxide—and, simply as vital, that prospects are keen to pay for it.
Douglas Foremost is a journalist and former senior editor and author at Nationwide Geographic.
