Some of those automakers—together with Volvo, which can purchase from Stegra and rival SSAB—are advertising automobiles made with the inexperienced metal as “fossil-free.” And since automobiles and vans even have many components which are way more costly than the metal they use, metal that prices the automakers a bit extra provides solely a bit of to the price of a automobile—maybe a few hundred {dollars} or much less, in keeping with some estimates. Many firms have additionally set inside targets to cut back emissions, and shopping for inexperienced metal can get them nearer to these targets.
Stegra’s enterprise mannequin is made attainable partly by the distinctive financial circumstances throughout the European Union. In December 2022, the European Parliament authorised a tariff on imported carbon-intensive merchandise akin to metal, referred to 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.
Starting in 2026, firms should start paying charges designed to be proportional to the supplies’ carbon footprint. Some firms are already betting that it will likely be sufficient to make Stegra’s 30% premium worthwhile.
STEGRA
Though the legislation may incentivize decarbonization throughout 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 Research Institute for Sustainability in Potsdam, Germany. In Stegra’s case, it can obtain €265 million from the European Commission to assist construct its plant; it was additionally granted €250 million from the European Union’s Innovation Fund.
Meanwhile, 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 will probably be used to extend or lower utilization of electrical energy in keeping with its fluctuating value on the grid.
Stegra realized there was no subtle software program for holding observe 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 sort of accounting is ultra-important to Stegra, Hernell says, since “we ask for a pretty significant premium, and that premium lives only within the promise of a low carbon footprint.”