A few of these automakers—together with Volvo, which can purchase from Stegra and rival SSAB—are advertising and marketing vehicles made with the inexperienced metal as “fossil-free.” And since vehicles and vehicles even have many elements which are rather more costly than the metal they use, metal that prices the automakers a bit extra provides solely slightly to the price of a automobile—maybe a few hundred {dollars} or much less, based on some estimates. Many firms have additionally set inside targets to scale back emissions, and shopping for inexperienced metal can get them nearer to these objectives.
Stegra’s enterprise mannequin is made potential partially by the distinctive financial situations inside the European Union. In December 2022, the European Parliament permitted a tariff on imported carbon-intensive merchandise similar to metal, often known as the Carbon Border Adjustment Mechanism (CBAM). As of 2024, this regulation 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 will probably be sufficient to make Stegra’s 30% premium worthwhile.
STEGRA
Although the regulation 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 should 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 scale 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 shall be used to extend or lower utilization of electrical energy based on its fluctuating worth on the grid.
Stegra realized there was no subtle software program for conserving 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 should quickly promote as a part of a brand new spinoff firm. One of these 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.”