Under the agreement, the steel will be processed into components for Microsoft’s data centre network, while the EACs separate the environmental benefit from the physical product.

This means Stegra can sell the physical steel as a conventional material to other buyers, while Microsoft claims the emissions savings through the certificates.

The model avoids double-counting and helps finance further near-zero-emission steel production.

“Through the EACs, the green value can be sold to Microsoft – a player of a unique size that can really help move the needle in the right direction,” explained Henrik Henriksson, Stegra CEO.

“Microsoft has chosen to team up with Stegra and together put something completely new on the steel market that will incentivise bigger volumes and more locations for steel production with close to zero emissions.”

Melanie Nakagawa, Microsoft’s Chief Sustainability Officer, said the company ultimately aims to use only low-carbon steel, but with supply still limited, certificates allow it to claim carbon savings now while signalling demand and financing future production.

After backing Stegra in 2023 through its Climate Innovation Fund, Microsoft is now targeting scope 3 emissions from data centre construction. Stegra’s hydrogen-based process reportedly cuts emissions by up to 95% compared with conventional steelmaking.

Stegra’s Boden plant is scheduled to start production in 2026, ramping up to five million tonnes of green steel annually by 2030.

To support this, Thyssenkrupp Nucera has begun supplying alkaline electrolyser modules for a 740MW hydrogen facility on site.