Google backs Swedish green-steel project to tackle rising emissions

Google is backing the buildout of a novel green-steel mill in Sweden as the tech giant grapples with rising greenhouse gas emissions from its AI expansion.

On Thursday, the company said it is partnering with Stegra to help bring the Swedish firm’s flagship facility online. Unlike traditional coal-fueled mills, Stegra’s project will use green hydrogen — made from renewable electricity and water — to produce what it calls ​“near-zero emission” steel.

The agreement helps address some of the thorny challenges facing green steel companies and data center developers.

Metal-makers need wealthy, early customers like Google to help stoke investor interest in their novel manufacturing plants. Meanwhile, tech companies need cleaner construction materials to curb their growing environmental impact. Google recently reported an 18% rise in its annual emissions from 2024 to 2025, owing to its increased use of steel, concrete, computing hardware, and other materials for data centers.

The Alphabet subsidiary is not slated to buy any metal from Stegra’s multibillion-dollar plant, which is under construction in Boden, just south of the Arctic Circle.

Instead, Google will procure ​“environmental attribute certificates,” which allow the company to count emissions reductions associated with a ton of Stegra’s steel toward Google’s own sustainability targets. In exchange, Google helps tdefray the extra costs involved with hydrogen-based steelmaking. Stegra then sells its metal into the European market as a standard product — without labeling it as lower-carbon steel.

“By supporting early-stage technologies like Stegra’s green steel, we are helping to create a market for materials that are essential to reducing emissions,” a spokesperson for Google said by email.

Thursday’s agreement is the second of its kind for Stockholm-based Stegra, formerly H2 Green Steel. Last year, the firm struck a two-part deal to sell the certificates to Microsoft and also physical steel to Microsoft’s equipment suppliers for European data centers. Neither Microsoft nor Google provided details about the financial value of their arrangements with Stegra.

The Swedish facility is one of a handful of projects advancing globally that aim to dramatically reduce emissions from iron and steel production, which accounts for roughly 9% of human-caused carbon dioxide emissions every year. The vast majority of that pollution comes from using coal in giant, dirty ironmaking furnaces.

Stegra says its operation will slash carbon emissions from steelmaking by up to 95%, compared with traditional methods. The facility taps the abundant hydropower and wind resources in northern Sweden to produce hydrogen gas — fuel that’s used to convert iron ore into iron. That iron is then transformed into steel using electric arc furnaces, also powered by renewables.

Under the new deal, Google will receive certificates from a portion — up to 91,000 metric tons — of the steel made in Stegra’s first year of production. It’s not clear exactly when operations will start. Stegra, which has weathered a series of financial woes over the last year, said its project timeline is still under review.

The facility is expected to produce 2.5 million metric tons of steel in its first phase, before ramping up to make 5 million metric tons at full tilt.

“Our procurement is directly contributing to Stegra achieving project financing for the second phase expansion of their production facility,” the Google spokesperson said. 

Environmental attribute certificates can play a crucial role in helping build out the world’s next generation of iron and steel facilities, experts say. Efforts to develop hydrogen-based steelmaking and other cutting-edge technologies have in recent years faced significant hurdles to scaling up, owing to their high costs and technical complexities — as well as the difficulty of competing with cheaper coal-based steel products.

The instruments are ​“a great mechanism to overcome different market barriers in industries where we need to see increased investment,” said Claire Dougherty, an industrial decarbonization program manager at RMI. The clean-energy think tank has spearheaded much of the industry’s emerging work around low-carbon iron and steel certificates.

“A hydrogen [steel] facility can cost billions of dollars, and that can be very difficult to get funding for, particularly without a guarantee that someone’s going to buy your decarbonized product at a premium,” she said. At the same time, the companies that are most willing to pay a premium — like data center developers — aren’t typically in the business of buying steel, or their operations aren’t close enough to green steel mills to justify sourcing the metal directly.

Certificates ​“can help to expand the demand pool and help those suppliers achieve bankable offtake,” Dougherty said.

Proponents are hoping to grow this model beyond pilot agreements like Google’s by creating a formal market, known as a ​“book and claim” system, for buying and selling iron and steel certificates.

Earlier this month, Stegra and the cleantech startups Electra and Charm Industrial, along with the nonprofit Roundtable on Sustainable Biomaterials, said they were working toward that goal by developing shared standards and metrics for how emissions reductions are counted, and for ensuring environmental claims are independently verified and traceable. The initiative builds on a comprehensive framework that RMI is set to unveil next week that lays out rules for operating a credible book-and-claim system for iron and steel.

“We view this as a really important next step, in terms of scaling the [certificate] market for low-carbon iron and steel producers,” said Maressa Brennan, Electra’s senior director of regulatory policy and markets.

Colorado-based Electra is developing a novel approach to ironmaking that avoids the need for a scorching furnace. Instead, the company produces iron with electrochemical devices, which are powered by renewables and can run at the same temperature as a fresh cup of coffee.

Last year, the startup announced a deal to provide environmental attribute certificates to Meta. Electra is set to start operations later this year at a demonstration plant in Jefferson County, Colorado, which will initially produce up to 500 metric tons of high-purity iron per year. The company is also assessing a few global sites for its first commercial facility, which could come online in the early 2030s, Brennan said.

“Our agreement with Meta was an early example to indicate that there’s a market interest in … these types of technologies,” she said. ​“The work we’re doing now [with the registry] is to more formally establish a marketplace that helps these approaches scale.”