Green Steel: Can Hydrogen Replace the Blast Furnace?
Steel is responsible for somewhere between seven and ten per cent of the world's energy-related CO2 emissions, by the International Energy Agency's count, and seven to eight per cent of all human-caused greenhouse gas emissions by broader industry tracking. Almost all of it is still made the way it has been made for more than a century: iron ore reduced with coke in a blast furnace, in a reaction that puts carbon dioxide into the air as an unavoidable part of the chemistry itself, not as a side effect of the fuel.
This video explains that chemistry in full - why coke is both the furnace's fuel and its reducing agent, why scrap and the electric arc furnace can only ever be part of the answer, and how hydrogen direct reduction does the same job coke does, leaving water instead of carbon dioxide behind.
And then the money. Stegra agreed a 1.4 billion euro financing round on 14 April 2026, led by a consortium organised by the Wallenberg family's investment arm, closing on 24 June 2026 - bringing its total financing close to 8 billion euros. SSAB's own new electric arc furnace at Oxelosund was separately delayed in May 2026 by a permitting appeal over its power connection. Then, on 30 September 2026, Stegra's own board announced that a 100-day review had found building costs running higher than assumed, that further capital would be needed, and that chief executive Henrik Henriksson was being replaced by Hakan Buskhe. Every delay in this story has come from permits, power lines and financing - not from the reaction failing to work.
Finally, the cost: green steel selling at a premium of roughly 100 to 170 euros a tonne over conventional steel through the first half of 2026, against a European Union carbon border tax that, since 1 January 2026, has started putting a carbon cost on imported conventional steel too.
The question the video leaves open, deliberately: is this a real industrial shift, or a subsidy-dependent experiment that has not yet proven it can stand on its own.
Educational documentary. Not financial or investment advice.
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Photo credits (Wikimedia Commons)
- Kiruna, the largest underground iron mine (astronaut photo): NASA International Space Station Program, Public domain - https://commons.wikimedia.org/wiki/File%3AKiruna_iron_mine_ISS.jpg
- Kiruna iron mine area seen from the town, 2022: Leonhard Lenz, CC0 - https://commons.wikimedia.org/wiki/File%3AKiruna_mine_2022-08-22_01.jpg
- Lithgow blast furnace tapping, opening day 1907: Unknown photographer. Published in 'The Sydney Mail and News South Wales Advertiser' of 22 May 1907, Page 1312., Public domain - https://commons.wikimedia.org/wiki/File%3ALithgow_blast_furnace_-_guests_watch_tapping_at_opening_%28Sydney_Mail_22-5-1907%2C_p1312%29.jpg
- Pittsburgh steel mills at night, early 20th century: AnonymousUnknown author, Public domain - https://commons.wikimedia.org/wiki/File%3ANight_Scene_on_the_Monongahela_River_Near_Pittsburgh%2C_Pa.%2C_Showing_a_Portion_of_the_Plants_of_the_Pittsburgh_Steel_Co.jpg
- Kiirunavaara open pit iron mine: unknown, Public domain - https://commons.wikimedia.org/wiki/File%3AKiirunavaara_dagbrott.jpg
- Iron ore train on the Malmbanan: Unknown authorUnknown author, CC0 - https://commons.wikimedia.org/wiki/File%3AJvmKDAE08586.jpg
- Malmbanan iron ore line in the mountains, 2022: Leonhard Lenz, CC0 - https://commons.wikimedia.org/wiki/File%3AMalmbanan_at_L%C3%A5ktatj%C3%A5kka_2022-09-01_01.jpg
- Porjus hydroelectric dam, Lule river: Swedish National Heritage Board, No restrictions - https://commons.wikimedia.org/wiki/File%3AThe_dam_of_Porjus_water_power_plant%2C_Jokkmokk%2C_Lappland%2C_Sweden_%289664010748%29.jpg
- Porjus power station exterior: Unknown authorUnknown author, Public domain - https://commons.wikimedia.org/wiki/File%3AKraftverk_Exteri%C3%B6r._ArkDes_ARKM.1962-101-1404.jpg
- Boden town centre, Norrbotten: Unknown authorUnknown author, Public domain - https://commons.wikimedia.org/wiki/File%3ABoden_centrum.jpg
- Gällivare mining district, historic photograph c.1900: Ring, Herman A (1859-1927), Public domain - https://commons.wikimedia.org/wiki/File%3AG%C3%A4llivare_Malmf%C3%A4lt_-_Sveriges_industri_-_dess_storm%C3%A4n_och_befr%C3%A4mjare.jpg
Primary sources
- IEA, 'Iron and Steel Technology Roadmap', 2020, using 2019 data - the 7% (energy-system CO2) and 10% (including indirect emissions) figures, and the general blast-furnace/coke/EAF process descriptions.
- worldsteel, 'World Steel in Figures 2024' and 'Sustainability Indicators' - 1,886 Mt crude steel produced in 2024, average intensity 2.18 t CO2e/t steel, and the 7-8% of global GHG emissions figure also reported by the World Economic Forum's Net Zero Industry Tracker 2024.
- Vattenfall/SSAB/LKAB (HYBRIT) press materials, 2020-2024 - pilot plant commissioned 31 August 2020, first hydrogen-reduced sponge iron reported 21 June 2021 ('around 100 tonnes'), and LKAB's 27 August 2024 statement that 'more than 5,000 tonnes of hydrogen-reduced iron have been produced at HYBRIT's pilot plant in Lulea'.
- Norran, 'Green shift stalls: LKAB's fossil-free iron project pushed back', 13 November 2025 - the Gallivare power-line permitting delay and LKAB's continued 2029 production target.
- Stegra press release via Cision, 'Stegra has agreed in principle on a EUR 1.4 billion financing round...', 14 April 2026 - the financing amount, the Wallenberg Investments-led consortium, and Stegra's own 'timeline under review' statement.
- Canary Media, 'Stegra lands funding to complete world's first major green-steel mill', 14 April 2026 - Stegra's approximately EUR 6.5bn in prior funding, which this round brings close to EUR 8bn in total.
- Sweden Herald, 'Stegra reaches supply agreement with thyssenkrupp for at least 100,000 tons starting in 2027', 12 January 2026 - the thyssenkrupp offtake agreement and the 2.5 million tonnes/year first-phase capacity.
- SSAB press release, 'Commissioning of the electric arc furnace in Oxelosund delayed due to permitting process', 11 May 2026, 19:45 CEST - the permitting appeal, the delay to Q2 2027, and the verbatim quote from CEO Johnny Sjostrom.
- Stegra press release via Cision, 'Stegra implements changes following 100-day review under new owners - Hakan Buskhe appointed CEO', 30 September 2026, 10:00 CET - the need for further capital beyond the June 2026 round, and the CEO change from Henrik Henriksson to Hakan Buskhe from 1 November 2026.
- ESG Today, 'Stegra Seeks More Capital - Again - for Green Steel Megaplant on "Significantly Higher than Assumed" Costs', 1 October 2026 - the verbatim quote from Stegra chair Leif Johansson.
- Fastmarkets green-steel premium assessments, Northern Europe flat-rolled, January-May 2026 - the EUR 100-170/tonne premium range.
- EU CBAM definitive-phase trade-compliance reporting, 2026 - the 1 January 2026 start of financial obligations on imported steel's embedded carbon, and the first certificate surrender deadline of 30 September 2027.
Not regulated financial advice.