Low-carbon steel that utilizes green hydrogen in the production process will be used in Microsoft data centers under an agreement announced this week with Swedish steelmaker Stegra. Microsoft also agreed to purchase the environmental attribute certificates (EACs) tied to the steel’s production.
Stegra said the use of green hydrogen in the steelmaking process will reduce the steel’s greenhouse gas (GHG) emissions by up to 95%. Production at the steel plant, which is under construction in Sweden, is expected to begin in 2026 and produce 5 million MT/year of low-carbon steel by 2030. The plant will include a 700-MW green hydrogen plant, which would make it bigger than nearly all the North American green hydrogen projects we track in our weekly Hydrogen Billboard report. The plant’s first electrolyzer (see photo below) was installed in June.
Microsoft will purchase the EACs from Stegra, which will then sell the steel at market prices (without a green premium) to Microsoft suppliers to use in its data centers. The announcement did not disclose how much steel would be produced under the agreement.
Plans to use hydrogen in low-carbon steelmaking have run into headwinds elsewhere this year. ArcelorMittal said in an April report that efforts to reduce GHG emissions in steelmaking via carbon-capture technology and a switch to green hydrogen were unlikely to be economically viable before 2030. Cleveland-Cliffs said in May that a decarbonization project at its plant in Middletown, OH, that would have relied heavily on hydrogen was being “substantially altered,” citing the changing energy priorities under the Trump administration.
