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Facing a cash crunch of more than $1 billion, Europe’s flagship green-steel project began publicly seeking a financial lifeline earlier this month. This week, the French hydrogen investor Hy24 swooped in to help fund Stegra, the Swedish firm behind the effort.
Construction is 60% complete on the facility, which is located in northern Sweden just below the Arctic Circle. If finished, the plant would be the world’s first large-scale steel mill fueled by clean hydrogen, giving Europe a leg up on both the United States and China in an emerging low-carbon technology.
“There is no reason to question the project, whose fundamentals are very good,” Pierre-Etienne Franc, co-founder and CEO of Hy24, told Bloomberg. “If anything, demand for green steel has risen since its launch.”
Franc did not disclose how much money Hy24 invested in Stegra (formerly known as H2 Green Steel), and the company did not respond to Canary Media’s multiple emails requesting comment.
In a press release announcing the start of the new fundraising round on October 13, Stegra CEO Henrik Henriksson said that the investments the company was seeking would represent “approximately 15%” of overall project funding, “comprising a mix of new equity, debt, outsourcing, and selected strategic partnerships.”
“Stegra has a unique position in the green steel landscape with a strong order book, a competitive cost position, and proven execution capabilities,” Henriksson said.
A previous investor from Stegra’s 2023 financing round had also stepped up before Hy24 made its announcement. Just Climate, the British low-carbon venture fund linked to former Vice President Al Gore’s investment company, told the Swedish broadcaster SVT earlier this month that it planned to increase its stake in Stegra. In a statement, Stegra told Canary Media that “several investors have conveyed their commitment to this round,” including the venture funds Altor, FAM, and Kallskär.
But Hy24 is the first new investor to come forward since the latest fundraising began. The investment firm represents “one of the most advanced funding bases for hydrogen in the world,” said Rinaldo Brutoco, the founder of the World Business Academy think tank and a hydrogen investor who has advised European governments on the hydrogen industry.
“They’re the best thing in the hydrogen space in France,” he said. “They invest at the level of ‘let’s build a full-scale plant’ and they operate at the level of ‘let’s build entire industries.’”
That Hy24 is funding Stegra, he said, is a sign the firm is “confident it’s a safe investment.”
“Will Stegra be successful? Absolutely,” Brutoco said. “Have they run into cost overruns? Sure, what new technology hasn’t? But it’s a minor hiccup.”
Still, some big investors are growing skittish. Unnamed sources told the Financial Times this month that Citigroup, one of the project’s core funders, has indicated it wants to stop lending to Stegra because of concerns about the company’s future.
Haunting the project is the ghost of its former sister company, the European battery manufacturer Northvolt, which declared bankruptcy last fall. Both firms were founded with money from Vargas Holding, a Swedish private equity investor focused on climate impacts.
“They’ve got their work cut out,” one lender said of Stegra, according to the FT. “But there is a solid case there, a basis to conduct fundraising, that there wasn’t for Northvolt.”
Amid multiple emergency board meetings, Harald Mix, chair and co-founder of Stegra, agreed to step aside.
Stegra isn’t alone in its troubles. In the U.S., the Trump administration has hampered the nascent green-steel industry by slashing funding to the two regional hubs meant to ramp up production of green hydrogen and changing the terms of grants through the Department of Energy to encourage steelmakers such as Cleveland-Cliffs to double down on coal. In Europe, meanwhile, the Luxembourg-based steel giant ArcelorMittal abandoned plans in June to produce clean steel with green hydrogen and direct reduced iron at two German sites in Bremen and Eisenhüttenstadt.
“[T]here has been slower than expected progress on all aspects of the energy transition, including green hydrogen not yet being a viable fuel source and natural gas-based DRI production not being competitive as an interim solution,” ArcelorMittal said in a statement.
That makes the latest investments in Stegra a cause for optimism, said Anne-Sophie Corbeau, a hydrogen analyst at Columbia University’s Center on Global Energy Policy.
“Some European steel producers have been going backward recently, like Arcelor, so it’s good to see this project moving forward,” she said.
America has some green shoots, too. Hyundai this month confirmed its plans to build a clean steel facility in Louisiana by the end of the decade, with plans to generate green hydrogen by 2034.
“In a time of strong headwinds for industrial decarbonization, continued investor confidence in projects like this is encouraging,” said Ariana Criste, a spokesperson at Industrious Labs, a research group that tracks steel industry decarbonization. “It shows that despite near-term challenges, the fundamentals for clean steel are solid, and each new project or demand signal helps build the technical foundation and market momentum needed to accelerate the transition.”
An update was made on November 2, 2025 to add a statement from Stegra
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