A few of these automakers, together with Volvo, which is shopping for Stegra and its rival SSAB— are advertising and marketing automobiles produced from inexperienced metal as “fossil-free.” And since automobiles and vehicles even have many elements which can be far more costly than the metal they use, metal that prices automakers a little bit extra provides solely a little bit to the price of a car: perhaps a few a whole lot of {dollars} or much less, by some estimates. Many corporations have additionally set inner targets to scale back emissions, and buying inexperienced metal can convey them nearer to these targets.
Stegra’s enterprise mannequin is made attainable partly by the distinctive financial situations throughout the European Union. In December 2022, the European Parliament accepted a tariff on imported high-carbon merchandise akin to metal, referred to as the Carbon Border Adjustment Mechanism (CBAM). Beginning in 2024, this regulation requires those that import iron, metal and different commodities to report the carbon emissions related to the supplies.
Beginning in 2026, corporations should begin paying charges designed to be proportional to the carbon footprint of supplies. Some corporations are already betting that it is going to be sufficient to make Stegra’s 30% premium value it.
STEGRA
Whereas the regulation may incentivize decarbonization throughout the EU and for these importing metal into Europe, inexperienced steelmakers will seemingly additionally want subsidies to cowl the prices of enlargement, says Charlotte Unger, a researcher on the Analysis Institute for Sustainability in Potsdam. , Germany. Within the case of Stegra, it’ll obtain 265 million euros from the European Fee to assist construct its plant; It additionally obtained 250 million euros from the European Union Innovation Fund.
In the meantime, Stegra is working to scale back prices and improve income. Olof Hernell, chief digital officer, says the corporate has invested closely in digital merchandise to enhance effectivity. For instance, a semi-automatic system will probably be used to extend or lower electrical energy utilization primarily based on its fluctuating value on the grid.
Stegra realized that there was no refined software program to trace the emissions the corporate produces at every step of the metal manufacturing course of. That is why it is creating its personal carbon accounting software program, which it’ll quickly promote as a part of a brand new spin-off firm. Any such accounting is essential to Stegra, Hernell says, since “we ask for a fairly important premium, and that premium is just met throughout the promise of a low carbon footprint.”
