Swedish green iron and steel producer Stegra, formerly known as H2 Green Steel, has signed a landmark power purchase agreement (PPA) with German low-carbon energy provider Uniper. This six-year PPA, between 2027 and 2032, will lock in the annual delivery of electricity, amounting to six terawatt hours, which will be a fundamental component of Stegra’s vision to transform the steel industry with sustainable and low-carbon solutions.
Established in 2020, Stegra has quickly grown to be a leader in the production of green steel. The company is currently developing a flagship plant in Boden, Sweden that will integrate a giga-scale green hydrogen production facility directly into its steel manufacturing process. The innovation of the approach uses hydrogen from renewable energy to remove oxygen from iron oxide – a process that has always released substantial amounts of carbon dioxide. Stegra aims to power its operations exclusively with renewable energy, cutting industrial emissions significantly and redefining sustainability in steel production.
The Boden plant construction has started in 2022, with the operation target to commence in 2026. This facility is hoped to achieve five million annual tons of green steel by the year 2030, considered as the corner stone and foundation for the green industrial revolution of Europe. More specifically, this process will go through an electrolysis-based 700 MW plant intended to create green hydrogen reducing iron ore into green sponge iron which is a steel production crucial input.
This power obtained through the tie-up with Uniper will fuel the electrolysis plant and would cover the heavy energy requirement in the manufacturing process. Collaboration such as this, on the other hand, marks another critical milestone towards renewable energy facilitating industrial decarbonization. According to Arne Österlind, Head of Energy Portfolio at Stegra: “This agreement with Uniper bases the strategic partnership with a player that is able to give us access to electricity, in the long term, for our Boden site, which is to become a production plant for large-scale green hydrogen, green iron and steel.”. This electricity delivery forms the heart of our strategy and a crucial step in accelerating the reductions of industrial emissions in Europe.
PPA is also central for Stegra but fits in with the ambitious sustainability goals of Uniper. Based in Düsseldorf, Uniper aims to reach carbon neutrality by 2040. The company plans to have more than 80% of its power-generating capacity zero-carbon in the early 2030s, further underlining its commitment to enabling the global energy transition. Johan Svenningsson, Country Chairman of Uniper Sweden, said: “We are proud to support the ongoing transition of the energy system by being a reliable and innovative partner to industrial off-takers.”
The Boden project is a giant leap forward in addressing the carbon footprint of steelmaking, which has been a high-emitting sector. Stegra’s reliance on renewable energy and green hydrogen positions it as a leader in this shift, and the company’s innovations are expected to set benchmarks for the industry worldwide. This means that the partnership with Uniper not only ensures a steady supply of renewable energy but also highlights the growing collaboration between energy producers and industrial innovators in the fight against climate change.
The global demand for sustainable solutions is growing; and the collaboration between Stegra and Uniper exemplifies that synergy required to attain very ambitious decarbonization targets. The partnership will be positioned to make a huge difference on industrial emissions reduction in Europe by combining cutting-edge technology with long-term renewable energy commitments.
Stegra’s Boden will be one of the showcase projects for green steel. The plant is expected to symbolize the future of hydrogen technology and renewable energy integration, with construction already in good progress and the first operational phase scheduled to start in less than two years. Most probably, it will act as a model for regions looking to transition toward more greener industrial practices.
This agreement not only secures the energy requirements for the Boden plant but also fixes the role that renewable energy plays in shaping the future of heavy industries. It is indeed an innovative approach adopted by Stegra and supported by Uniper towards making the industrial ecosystem more sustainable and resilient in Europe and further beyond.