In a landmark decision, the Swedish Energy Agency has awarded Stegra approximately €100 million from the Industrial Leap fund to support the establishment of a near-zero emission steel production facility in Boden. This funding forms part of a broader initiative to transform Sweden’s steel industry into a global leader in sustainable production. The Industrial Leap fund was introduced as part of the Swedish climate law passed in 2018, which mandates government responsibility in meeting climate targets through innovative policy and financial support for industrial innovation.
Earlier this year, the European Commission approved a €265 million Swedish measure under the EU State aid rules, partially financed by the Recovery and Resilience Facility, to help Stegra (formerly H2GS AB) establish its large-scale green steel plant. The European Commission emphasized that projects like Stegra are crucial for achieving the EU’s climate targets. The Swedish Energy Agency’s funding today represents a portion of the total support package aimed at fostering Sweden’s green industrial transformation.
Building a Sustainable and Competitive Industry
Henrik Henriksson, CEO of Stegra, highlighted the significance of the Swedish government’s support: “The funds from the Industrial Leap are a strong signal of national backing for one of Sweden’s largest industrial projects. This also helps level the playing field with other European steel companies that have received substantial support packages. It enables us to build a long-term, sustainable, and competitive industry here in Sweden.”
Historically, the transition to sustainable solutions in the steel industry has been slow, with heavy subsidies favoring high-emission incumbents. However, this is changing with revisions to the Emission Trading System, the gradual phasing out of free allocations, and the introduction of the Carbon Border Adjustment Mechanism. State aid plays a crucial role in accelerating the shift to greener technologies while ensuring fair competition between traditional players and innovative cleantech companies.
State Support Paving the Way for Global Leadership
Caroline Asserup, Interim Director General of the Swedish Energy Agency, underlined the importance of initiatives like the Industrial Leap: “Swedish industrial companies have the potential to become global leaders while contributing to the green transition of society. The Industrial Leap is critical not only for the climate but also for the long-term competitiveness of our industry.”
Stegra’s Boden plant has the highest emission-avoidance efficiency per invested Swedish krona of any industrial project in Sweden. According to the company, the plant will achieve an average reduction of 28 kilograms of CO2 emissions per support-krona invested. These climate calculations are based on the methodology of CINEA (the European Climate, Environment and Infrastructure Executive Agency) and have been independently verified by DNV and audited by PwC.
With this substantial financial backing, Stegra is set to play a pivotal role in transforming the steel industry and supporting Sweden’s leadership in the global green transition.
