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 elements which might be way more costly than the metal they use, metal that prices the automakers a bit extra provides solely a little bit to the price of a car—maybe a few hundred {dollars} or much less, in response to some estimates. Many corporations have additionally set inside targets to cut back emissions, and shopping for inexperienced metal can get them nearer to these objectives.
Stegra’s enterprise mannequin is made potential partly by the distinctive financial situations throughout the European Union. In December 2022, the European Parliament permitted a tariff on imported carbon-intensive merchandise similar 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.
Beginning in 2026, corporations must start paying charges designed to be proportional to the supplies’ carbon footprint. Some corporations are already betting that it is going to be sufficient to make Stegra’s 30% premium worthwhile.
STEGRA
Although 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 Analysis Institute for Sustainability in Potsdam, Germany. In Stegra’s case, it’s going to 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 will probably be used to extend or lower utilization of electrical energy in response to 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’s going to 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 reasonably vital premium, and that premium lives solely throughout the promise of a low carbon footprint.”
