Stegra will seek additional funding for its hydrogen-based steel plant in Boden, Sweden, after a review uncovered the “significantly higher than assumed” cost of its completion, just months after completing a €1.4bn ($1.58bn) raise.
CEO Henrik Henriksson, who remained in place following the July close of the rescue package, which came alongside a leadership reshuffle, will step down to be replaced by Håkan Buskhe in November.
The bailout, raised by Swedish investment firm Wallenberg Investments, came after prior project funds were exhausted.
The company claimed the unforeseen additional expenses of undisclosed value stem mainly from a “substantial” ramp-up in operations as well as inflation, but said a “robust project plan” is in place for project completion.
It added that the project’s business case “remains strong” and the targeted annual capacity of five million tonnes of green steel per year by 2030 remains on track.
Details of the plan and sources of the new investment also remain to be revealed, while the firm floated “opportunities for outsourcing and partnerships.”
The Boden plant was due to enter operation this year, using a 740MW electrolyser plant to convert iron ore into direct reduced iron (DRI). However, it failed to reach completion using a $7.15bn development funding package, a second $1.07bn funding round, and $296m in European Commission grants.
It comes despite the firm landing physical and certificate supply deals with major companies including Microsoft, Porsche, Ikea, and many others.
High production costs have beset Europe’s green steel industry, with steel producers including ArcelorMittal and Thyssenkrupp shelving or postponing major projects.
One project seemingly making ground is Salzgitter’s 9,000 tonne per year Salcos project at its Flachstahl site, which is targeting start-up in 2027.
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