Why we invested: Stegra

At Burda Principal Investments (BPI), we are committed to backing purpose-driven founders who are solving some of the world’s biggest challenges with technology. Today, we are thrilled to share our excitement about our recent investment in Stegra, a groundbreaking company poised to revolutionise the steel industry with its commitment to sustainability and innovation.

The Urgency of Sustainable Steel Production – The steel industry is a cornerstone of modern civilisation, providing the backbone for infrastructure, transportation, and countless other essential sectors. In 2023 alone, 1.8bn metric tonnes of steel were processed globally across industries, putting traditional steel production among the largest sources of carbon emissions globally, accounting for about 8% of global CO2 emissions. As the world strives to transition to a low-carbon economy, addressing the carbon footprint of steel production is paramount.

A Sustainable Solution: Green Hydrogen and Renewable Energy – Stegra is at the forefront of this vital transformation building on the bold vision to accelerate the decarbonisation of the steel industry by establishing a plant that will producing steel at scale with emissions that are up to 95% lower than traditional blast furnace-based steelmaking. Central to Stegra’s innovative approach is building a vertically integrated production plant that builds on the utilisation of green hydrogen produced from renewable energy sources. By harnessing renewable electricity and using it to split water in a process called electrolysis, Stegra creates hydrogen without generating any carbon emissions. This green hydrogen is then used as a clean alternative to traditional fossil fuels in the steelmaking process, reducing the carbon footprint of steel production to close to zero.

The World’s First Large-Scale Green Steel Plant – Located in Boden, Northern Sweden, Stegra’s ambitious project will be the world’s first large-scale green steel plant. This state-of-the-art facility will utilise cutting-edge technology to produce high-quality steel while emitting up to 95% less CO2 compared to traditional steel production methods.

Historically, steel plants were built in the vicinity of coal and iron ore mines. With European coal mines empty since years, producers now find themselves in a situation where the most energy intensive parts of the steel value chain, namely the production of green hydrogen and the green sponge iron, have more favourable conditions in other locations than where the existing steel plats are based. Places like the Iberian Peninsula (where solar energy is abundant) and northern Scandinavia (where hydro energy is well established) are therefore increasingly relevant in the global landscape for the steel value chain, opening up opportunities for these regions.

By demonstrating the viability of green steel on a commercial scale, Stegra is leading the charge towards a more sustainable future for the steel industry from Sweden.

Our Investment Thesis: Supporting Sustainable Innovation In Alternative Materials

At Burda Principal Investments, we’ve invested in Stegra because we believe that the company has a unique opportunity to create a new standard for the steel industry, and to accelerate the transition to a low-carbon economy. Stegra’s technology has the potential to significantly reduce the cost and environmental impact of steel production, while maintaining high quality and performance. The company also has a strong team of experienced entrepreneurs, engineers, and industrial partners, who share a bold vision and a commitment to innovation.

Moreover, our decision to invest in Stegra aligns perfectly with our values and investment thesis for the alternative materials sector, as we aim to support innovative companies that offer alternative products to widely adopted materials, with similar specifications but in a more sustainable form. We believe that Stegra’s innovative approach to decarbonising steel production has the potential to set a precedent in the industry and make a significant impact not only on the steel industry itself, but also on global efforts to combat climate change. We are excited that with our investment, we can contribute to building a more sustainable and resilient world for future generations.