Swedish startup Stegra to supply green steel to German giant Thyssenkrupp

Swedish green steel startup Stegra announced on Monday that German giant Thyssenkrupp Materials Processing will be its new customer. The deal covers non-prime steel, which Stegra plans to start producing next year at its hydrogen-based plant.

Stegra, formerly known as H2 Green Steel, is one of the projects expected to drive Sweden’s ambition to become a leader in industrial transformation. This ambition is underpinned by access to cheap electricity generated without CO₂ emissions.

However, Sweden’s ambitions have faced several setbacks in recent years. One of the biggest was the collapse of Northvolt, once seen as Europe’s battery hope. Stegra itself also said last year that it would seek around $1.1 billion in additional financing to complete its plant. It has not yet announced whether it secured the funding, but a company spokesperson said financing talks were expected to conclude in the first quarter of this year.

German giant

Thyssenkrupp Materials Processing is part of German conglomerate Thyssenkrupp, one of Europe’s leading players in the steel market. Under the agreement, Thyssenkrupp Materials Services, a subsidiary of the group, will buy a significant share of the steel and distribute it to customers across Europe from 2027.

Non-prime steel does not meet the standards for the highest grade of steel, but can still be used in industry in various ways. Starting with its production is a common strategy in the steel industry.

“A non-prime steel partner is important to us as we launch our steelworks, and we see this agreement as the beginning of a long-term partnership,” Stegra Chief Commercial Officer Stephan Flapper said in a statement.

Stegra and green steel

Green steel is produced in steelworks using hydrogen or electricity from renewable sources. This naturally affects the final price and adds some technical complications.

Several projects in Europe are seeking to produce green steel, but they are often delayed: the technologies are relatively new and the investment costs are very high. In addition to Stegra, advanced green steel projects include ArcelorMittal in Spain and Tata Steel in the Netherlands.

Stegra plans to start up its steelworks in Boden in northern Sweden, which is set to be the world’s first major newly built green steel plant. The entire complex is expected to have three parts: green hydrogen production through electrolysis, green iron production, and green steel production using an electric arc furnace. The entire plant is expected to reach full operation in 2028.