A few of these automakers—together with Volvo, which can purchase from Stegra and rival SSAB—are advertising and marketing automobiles made with the inexperienced metal as “fossil-free.” And since automobiles and vehicles even have many components which might be way more costly than the metal they use, metal that prices the automakers a bit extra provides solely somewhat to the price of a car—maybe a few hundred {dollars} or much less, in response to 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 partly by the distinctive financial circumstances throughout the European Union. In December 2022, the European Parliament authorised a tariff on imported carbon-intensive merchandise reminiscent of metal, often called 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 should 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 regulation might incentivize decarbonization throughout the EU and for these importing metal into Europe, inexperienced steelmakers will in all probability 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 might be used to extend or lower utilization of electrical energy in response to its fluctuating value on the grid.
Stegra realized there was no refined software program for maintaining 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 reasonably important premium, and that premium lives solely throughout the promise of a low carbon footprint.”
