Google is attempting to cut emissions from its building projects, including its data centers. The tech giant made a deal with Stegra, a steel company based in Boden, Sweden, to do that.
Google is buying Environmental Attribute Certificates (EACs) linked to Stegra’s steel production. The agreement covers up to 91,000 tons of steel for the first year, and they plan to add more volume as the deal continues.
Producing Near-Zero Emission Steel
While it’s all great in theory, near-zero emission steel is only currently available in small amounts and a few places.
Stegra uses a system to separate the physical steel from its environmental benefits called “book and claim.” Buyers like Google can buy the certificates to address their own emissions, even if they can’t buy the physical steel because it is too far away or hard to move through the supply chain.
Stegra applies these certificates to its “non-prime” steel. Whenever a new steel mill starts up, it naturally makes a larger share of imperfect steel. Stegra still makes this steel using green hydrogen and renewable electricity. To make sure the environmental benefits aren’t counted twice, the buyer of the physical steel has to agree not to make any green claims.
Buying these certificates gives Stegra cash flow during its early years and helps fund the scale-up of its clean tech production.
A Win-Win
“Decarbonizing the most challenging sectors requires every tool in our toolbox. Alongside physical procurement, certificates are another vital mechanism,” Adam Elman, Director of Sustainability for Google in Europe, the Middle East and Africa, explained. “Having proven this model with clean electricity and expanded it to other areas like sustainable aviation fuel, we see green steel EACs as another promising lever to address industrial emissions and scale the clean technologies of the future.”
For Stegra, the agreement is about getting the financial support to grow a new sustainable industry.
“There are some players globally that can help move markets towards decarbonized products in an impactful way,” Henrik Henriksson, CEO of Stegra, added. “Google is naturally one such player. Beyond the call to action to increase the supply of sustainably produced steel, we are also grateful that the team at Google chose to work with Stegra and support our first years of operations in this way.”
