Stegra, the first major bet on green steel in Europe avoids bankruptcy

CopenhagenSweden's prestige as a driver of the green industry in Europe suffered a severe blow with the bankruptcy of Northvolt in 2025. The electric battery manufacturer failed to live up to expectations and became the biggest industrial failure in the Nordic country's modern history. A year later, another emblematic company of the green industrial revolution driven from northern Sweden has avoided a similar fate.

In this case, it is Stegra, the company that aims to reduce carbon dioxide (CO²) emissions by 95% in steel production, an industry responsible for emitting four billion tons of CO² globally each year, according to the World Steel Association. To achieve this, the company, created in 2020 as a start-up under the name H2 Green Steel, is building Europe's first decarbonized steel mill, an immense project covering an area equivalent to 450 football fields.

From the outset, the company has had to face a disproportionate increase in the construction costs of the plant, with no date yet set for the start of steel production. This situation has triggered severe financial difficulties, which have intensified since the autumn of 2025, when the company was on the brink of bankruptcy.

But after months of intense negotiations, Stegra breathes a sigh of relief again after announcing an agreement with a consortium of investors willing to provide it with 1.4 billion euros, including the Wallenberg family, Sweden's wealthiest and most influential business dynasty. With this sum of millions, the company's executives are confident they can complete the construction of the plant, which includes a hydrogen factory with a 145-meter-high tower (which will become the tallest building in Sweden), a direct reduced iron plant, the steel mill itself—for which railway tracks had to be built—and an adjacent water treatment plant, which have added millions in extra costs to the project. "It has been incredibly hard work over the last six months, but we will finish the steel mill within 18 to 24 months," stated the company's CEO, Henrik Henriksson.

In the city of Boden, with 28,000 inhabitants and located more than 1,000 kilometers north of Stockholm, where Stegra is building the steel plant, the news has been received with relief. More than 4,000 workers are employed in the construction work, which began in 2022, and 6.5 billion euros have already been invested. The factory represents the only steel plant built in Europe in the last 50 years, and Sweden has used it as a true showcase for the industrial energy transition it wants to promote.

Save Sweden's industrial image

But beyond the funds Stegra has been able to raise, what has most caught the Swedish press's attention is the identity of its investors and the message they have wanted to send: through the Wallenberg Investments fund, this business lineage becomes Stegra's main shareholder after investing 240 million euros in it. The consortium of investors also includes Singapore's state fund Temasek, along with the IKEA IMAS Foundation, owner of most IKEA stores worldwide. For their part, the Wallenberg family controls several of the main jewels of Swedish industry, including the telecommunications group Ericsson, the home appliance manufacturer Electrolux, and the aeronautics and defense company Saab.

The entry of Wallenberg capital into Stegra has been interpreted not only as a financial contribution, but also as a validation of a project that bets on the ecological transformation of industry. This has happened at a time when, from conservative and far-right Swedish sectors reluctant about ecological industrial transformation, the idea of a "green bubble" has been spread, which, they warn, will sooner or later burst.

To give even more credibility to the investors' commitment, they have appointed a true industry veteran as chairman of the board of directors of Stegra, Leif Johansson, known for having been CEO of AB Volvo between 1997 and 2011. After being nominated, Johansson justified the involvement of the Wallenberg fund "due to the great importance the project holds for Sweden's status as a business nation." In fact, the country's main newspaper, Dagens Nyheter, valued that "the concern to preserve Sweden's image as a pioneering nation in green industry has probably been a significant factor in the Wallenberg family's decision to commit to Stegra".

However, experts also warn that, even though the construction of the green steel plant in Boden has been saved, the company still faces bigger challenges ahead, such as the rising price of energy, which is needed in large quantities for the production of green steel, while the prices of conventional steel continue to fall. Another problem was pointed out by Klara Helstad, deputy director of research at the Swedish Energy Agency, admitting to the British newspaper Financial Times"It is difficult for Sweden to support emerging green industries on a scale we see in China." From the Stockholm Environment Institute, Aaron Maltais warned that "we see things slowing down in Europe with other similar projects in Stegra that are having trouble reaching their business estimates and end up postponed or completely halted".