Sweden is in the midst of a profound transformation of one of the country’s most emission-intensive industries: steel production. Traditionally the Swedish steel industry has relied on coking coal and blast furnaces but is now at the forefront of developing fossil-free alternatives—driven by a combination of deep industrial expertise, access to renewable electricity and public-private collaboration. Three technological routes have been developed and they are complementary. One is hydrogen-based direct reduction, HYBRIT, developed by SSAB, LKAB and Vattenfall. Another is green hydrogen for reheating furnaces, as demonstrated by Ovako. The third is renewable liquid gas for forging, developed by Björneborg Steel.
These five manufacturers are at the forefront of this green transition. These range from industry giants producing millions of tonnes of fossil-free steel to mid-sized specialty producers achieving verified climate neutrality. And together, they show that decarbonization is not an aim for the future but a reality today, with commercial deliveries commencing and volume production planned for 2026.
Top 5 Swedish Steel Manufacturers Embracing Green Production
- SSAB
- Stegra (formerly H2 Green Steel)
- Ovako
- Björneborg Steel
- LKAB (as HYBRIT partner)
A Closer Look at the Top 5 Swedish Steel Manufacturers Embracing Green Production
1. SSAB
SSAB is the largest steelmaker in the Nordic region and the leader of the HYBRIT project, a joint venture with state-owned utility Vattenfall and miner LKAB. HYBRIT uses fossil-free hydrogen and renewable electricity instead of coking coal and strives for full removal of carbon dioxide emissions from the ironmaking process. SSAB accounts for approximately 10% of Sweden‘s total CO₂ emissions, making its transition nationally significant. The company has committed to delivering fossil-free steel to the market commercially in 2026, with all product ranges eventually available in fossil-free versions.
Key Points
- HYBRIT technology replaces coal-based direct reduction with green hydrogen, producing sponge iron with water as the only by-product.
- Timeline: Pilot plant operational since 2020; demonstration facility in Gällivare (1.3 million tonnes per year) planned for 2025-2026; commercial deliveries begin in 2026.
- Customer commitments: Volvo (first prototype cars), Meneta (brake components for automotive) and Parmaco (first fossil-free building concept).
- Funding: €20 million (215 million SEK) from Business Finland for the R&D program; €128 million in EU-approved state aid for electric arc furnaces in Luleå.
Achievements
- World’s first customer delivery of hydrogen-based fossil-free steel (to Volvo).
- First iron-ore-based steelmaker with climate targets approved by the Science Based Targets initiative (SBTi).
- Environmental Product Declarations (EPDs) on all product ranges to show parity with recycled scrap steel in CO₂ terms.
Feedback
Industry watchers say that while SSAB has secured early customer contracts and drawn substantial public funding, the HYBRIT demonstration plant has run into permitting delays. In April 2024, LKAB’s CEO warned that the start date could be pushed back to late 2027 or 2028. But critics, including economic researchers, have doubted the project’s commercial viability, citing electricity constraints in northern Sweden and uncertain hydrogen economics. SSAB is still the most advanced incumbent steelmaker in the green transition.
Contact Information
Website: https://www.ssab.com
2. Stegra (formerly H2 Green Steel)
Stegra (previously H2 Green Steel, renamed in 2024) is a greenfield project that started in 2020 with the clear ambition to build a fully integrated fossil-free steel plant from the ground up. Unlike incumbent steelmakers retrofitting existing facilities, Stegra is building a new plant in Boden, northern Sweden, from scratch around green hydrogen and renewable electricity. The company has secured €6.5 billion in funding, with mass production expected to begin in 2026.
Key Points
- Production capacity: Targeting 2.5 million tonnes of green steel per year.
- Technology: An integrated plant for green hydrogen production, direct reduced iron and electric arc steelmaking.
- Customers Purmo (European radiator producer) signed a contract for 2024–2031 for 20,000 tonnes a year, or about 10–15% of Purmo’s total steel purchases.
- Leadership: Founded by former Scania and Northvolt executives; first CEO Henrik Henriksson (ex-CEO of Scania).
Achievements
- Secured €6.5 billion for the project, one of Europe’s largest industrial decarbonization investments.
- Joined the Leadership Group for Industry Transition (LeadIT) in September 2024.
- Announced joint venture with Iberdrola for hydrogen production in Iberia, bringing green steel beyond Sweden.
Feedback
Stegra’s lack of legacy assets could allow it to operate faster and at lower costs than traditional steelmakers. The Boden plant, however, is not yet in operation and the company faces the same infrastructure challenges (electricity grid capacity, hydrogen storage) as HYBRIT. Green steel production costs remain about 25% higher than conventional steel, but carbon pricing could improve competitiveness.
Contact Information
Website: https://www.stegra.com
3. Ovako
Ovako is a Nordic leader in the production of special steels, including engineering steels, bearing steels and forged products. Ovako is smaller in volume than SSAB, but in September 2023 it achieved a world first: the world’s first industrial installation using fossil-free hydrogen to heat steel before rolling, replacing fossil-based propane at its Hofors site. This innovation tackles the “hard‑to‑abate” emissions that remain after electrification . It removes about two‑thirds of the residual CO2 footprint from their steel production .
Key Points
- Hydrogen reheating: Developed in-house at Hofors, using green hydrogen produced on site with support from the Swedish Energy Agency’s Industrial Leap programme.
- Multi-benefit integration: The facility provides power grid support, oxygen byproduct, hydrogen to outside actors and district heating – a model of sector coupling.
- Scrap-based production: Ovako already uses electric arc furnaces with recycled scrap, so hydrogen reheating is the last step towards near-zero emissions.
Achievements
- First in the world to reheat steel before rolling with fossil free hydrogen .
- The Hofors facility is Sweden’s first industrial green hydrogen project.
- We opened the new hydrogen facility on September 5, 2023.
Feedback
What is interesting about Ovako’s approach is that it is working with legacy facilities, not building all new plants. The company’s incremental, retrofit-friendly strategy is more repeatable worldwide than greenfield mega-projects. However, cost and availability of hydrogen remain constraints. The Hofors project was enabled by substantial public support through the Industrial Leap programme, without which, as Ovako’s technical specialist commented, “we probably wouldn’t have been first”.
Contact Information
Website: https://www.ovako.com
4. Björneborg Steel
Björneborg Steel is a smaller specialty manufacturer of open-die forged and machined products like shafts, bars, plates and blocks. What makes Björneborg stand out is the clear and verifiable commitment to climate neutrality on Scope 1 and Scope 2 emissions by 2026—not some distant 2050 target. This is being done via its Greenforge® production concept, where the company, in partnership with Flogas Sverige AB, is moving away from traditional LPG to renewable liquid gas (rDME and bioLPG).
Key Points
- Greenforge® concept: All on-site activities and energy supply (Scope 1+2) are to be completely fossil-free from 2026.
- Circular economy: 100% recycled raw material, 100% fossil-free electricity, 100% recycling of byproducts and products that are 100% recyclable after use.
- Transition to Renewable Fuel: Replaces LPG with rDME and bioLPG and maintains operational performance with no fossil carbon.
Achievements
- The World Liquid Gas Association (WLGA) publishes a case study as a model for the industry’s decarbonization.
- “From 2026 we will offer customers fossil-free production, in line with the Greenforge® “concept”—Peder Thunander, Greenforge & Senior Project Manager
- Shows that full decarbonization is not just possible for industry giants but also for mid-sized manufacturers.
Feedback
Björneborg’s approach is very pragmatic and transparent, aiming at real Scope 1+2 elimination, not offsetting or fuzzy “green steel” claims. Replacing hydrogen with renewable liquid gas might be more immediately scalable for forging applications without electrification or hydrogen infrastructure. However, rDME and bioLPG feedstocks must be sustainably sourced to ensure genuine emissions reductions.
Contact Information
Website: https://www.bjorneborgsteel.se
5. LKAB (as HYBRIT Partner)
LKAB is a Swedish state-owned mining company that operates the Kiruna and Malmberget iron ore mines and is the third partner in the HYBRIT initiative together with SSAB and Vattenfall. LKAB does not make finished steel but is the vital upstream link: the company makes iron ore pellets, which are then reduced into sponge iron with hydrogen. LKAB is building what it says is the world’s first industrial-scale, fossil-free sponge iron plant in Gällivare. The plant will have an initial capacity of 1.3 million tons a year.
Key Points
- HYBRIT demo plant: 500 MW electrolysis capacity, direct-reduced iron feedstock for 1.2 million tons of crude steel per year
- The start date has shifted from late 2026 to Q3 2027 (as of April 2024) with further risk of delay to 2028 due to slow permitting for renewables and the facility itself.
- Funding: The Gällivare demonstration project is funded by €143 million from the European Commission’s Innovation Fund.
- Strategic pivot risk. Research shows that if hydrogen economics do not work, LKAB may eventually stop producing sponge iron altogether and shift to high-grade iron ore and critical minerals.
Achievements
- The world’s first fossil-free sponge iron plant at industrial scale.
- Enables SSAB to deliver commercial fossil steel in 2026 (pending permitting).
- Key infrastructure for HYBRIT and possibly Stegra’s Boden plant.
Feedback
LKAB has the most complex engineering challenge of any player in the green steel value chain: converting raw iron ore into pellets ready for reduction with hydrogen at scale and then building the hydrogen reduction capacity from scratch. Observers say that electricity constraints in northern Sweden, where existing industrial demand already strains grid capacity, could limit the project’s feasibility. The company has been more cautious in its public timelines than SSAB, admitting real risks of delays.
Contact Information
Website: https://www.lkab.com
FAQ
What is the difference between “fossil‑free” and “carbon‑neutral” steel?
“Fossil-free” means that no fossil fuels are used in the production process—typically substituting hydrogen and renewable electricity for coal. It may also include offsets or carbon capture. “Carbon-neutral” SSAB and Stegra are looking for fossil-free steel. Björneborg Steel targets climate neutrality in scopes 1 and 2. All terms refer to operational emissions, not the entire value chain, unless otherwise stated.
When will fossil‑free steel be commercially available in volume?
Stegra and SSAB anticipate commercial production to begin in 2026. SSAB expects to start delivering its first commercial volumes in all product families in 2026. Stegra’s Boden plant is also expected to be operational in 2026. But if delays occur, that could mean that HYBRIT is not producing at full capacity until 2027–2028.
Which customers have already committed to buying green Swedish steel?
Volvo (prototype vehicles and components), Meneta (brake components for automotive), Parmaco (modular buildings) and Purmo (radiators) have signed contracts. The first fossil-free steel delivery to Volvo occurred as a trial run in 2021.
Is green steel pricier than conventional steel?
Yes. Today green steel costs around 25% more to produce than conventional coal-based steel. But the EU Emissions Trading System (EU ETS) and corporate Scope 3 reduction targets are closing the gap in carbon pricing. And increasingly, customers are willing to pay a premium for verified low-carbon material.
What are the main obstacles to scaling up green steel production in Sweden?
Three key constraints:
(1) Electricity grid capacity in northern Sweden, where current industrial demand already challenges the system;
(2) Slow permitting processes for hydrogen facilities, renewable energy projects and transmission lines;
(3) The unproven economics of large-scale hydrogen production and storage. LKAB’s CEO has warned publicly that “time-consuming and unforeseeable permitting processes” are delaying the transition.
Can existing steel plants be retrofitted for hydrogen, or must new plants be built?
There is room for both. Ovako demonstrates how existing facilities can be retrofitted. Its Hofors plant now uses hydrogen to reheat furnaces. SSAB upgrades its Luleå and Oxelösund works with electric arc furnaces. Stegra is the greenfield alternative, getting it right the first time without legacy constraints. The best path depends on site-specific conditions, remaining asset life and grid access.
How can I verify a steel product‘s emissions credentials?
Look for independently verified Environmental Product Declarations (EPDs). SSAB publishes EPDs for all its product ranges through the International EPD System. Genuine fossil‑free steel will have its specific EPD with substantially lower A1‑A3 values (production emissions) than conventional steel. Avoid vague “green steel” claims without third‑party certification.
What role does the Swedish government play in the green steel transition?
Ovako’s hydrogen project is funded by the Swedish Energy Agency through the Industrial Leap (Industriklivet) program. Government also facilitates EU state aid approval, as with the €128 million for SSAB’s Luleå furnaces. Both LKAB and Vattenfall are partners in HYBRIT and state-owned, meaning the government has a direct stake in the flagship project.
