BODEN, SWEDEN – In a coordinated operation on Wednesday, November 5, 2025, Swedish authorities, including the police, the Swedish Work Environment Authority, and the Swedish Tax Agency, conducted a surprise inspection at the construction site of Stegra, a high-profile green steel startup in the northern town of Boden. The raid at one of Europe's largest industrial projects has cast a spotlight on the intense financial and operational pressures facing pioneers of industrial decarbonisation.

Police spokeswoman Maria Fredriksson confirmed to international media that the unannounced visit was a "joint workplace inspection" aimed at preventing work-related crime. While she stated it was not linked to a specific criminal suspicion against the company, Fredriksson noted the inherent risks of illicit activities when vast sums of money are involved in large-scale projects. Reports from Swedish newspaper Aftonbladet mentioned up to 60 police officers were mobilised from across the country for the inspection, which involved checking the documents of some of the site's approximately 3,500 workers.

Karin Hallstan, Stegra's head of communications, confirmed the inspection, stating that such checks are not unusual for a project of this magnitude and that the company cooperates with authorities.

The Global Race for Green Steel

Stegra, formerly known as H2 Green Steel, was founded in 2020 with the ambitious goal of revolutionising one of the world's most polluting industries. Traditional steelmaking, which relies on coal and blast furnaces, accounts for approximately 7-8% of global carbon dioxide emissions. Stegra's pioneering model aims to cut emissions by up to 95% by using green hydrogen—produced on-site with renewable electricity—to reduce iron ore, emitting water instead of CO2.

The project has attracted massive investment, securing nearly €6.5 billion in a mix of equity and debt from major international investors and industrial partners like Mercedes-Benz, Volvo Group, and Microsoft. The Boden plant, slated to begin production in 2026, is designed to be the world's first large-scale facility of its kind, eventually producing five million tonnes of green steel annually—more than Sweden's entire current output.

However, the venture has faced significant headwinds, including project delays and soaring costs. In October 2025, Stegra announced it was seeking an additional 10 billion kronor (approximately $1 billion) in financing to cover higher project costs and investments in critical infrastructure like railway lines and port facilities. This financial pressure has drawn comparisons to the recent bankruptcy of Northvolt, another major Swedish green-tech venture co-founded by the same investment firm, Vargas Holding.

Implications for Kenya and East Africa

While there are no discernible direct links between Kenyan entities and the Stegra project, the developments in Sweden carry significant long-term relevance for Kenya and the wider East African region. The global shift towards green steel, driven by European climate policy and market demand, will inevitably reshape global supply chains and commodity prices.

Kenya is a net importer of steel, which is a critical input for its Vision 2030 infrastructure projects and manufacturing sector. In 2024, Sweden's iron and steel exports to Kenya amounted to US$743,680, according to UN COMTRADE data, forming part of a broader trade relationship. As carbon taxes and border adjustment mechanisms like the EU's CBAM take full effect, the cost of traditionally produced steel is expected to rise, making green steel a more competitive, and potentially necessary, alternative.

A May 2023 report by the Commonwealth Secretariat identified a significant opportunity for the East African Community (EAC) to develop its own billion-dollar "green steel ecosystem." The report highlights the region's advantages, including a growing steel market, expanding renewable energy capacity (geothermal and hydro), and the absence of legacy high-carbon steel plants, which simplifies decarbonisation. With steel demand in Kenya and Tanzania exceeding 4 million tonnes in 2019, the strategic development of a regional green steel industry could reduce import dependency, create high-value jobs, and position the EAC as a leader in sustainable industrialisation in Africa.

The challenges faced by Stegra in Sweden—from financing hurdles to regulatory scrutiny—offer crucial lessons for any future green industrial projects in East Africa. As the world transitions, the ability to attract massive investment, manage complex construction, and ensure transparent governance will be paramount. The outcome of today's inspection in Boden will be closely watched, not just in Europe, but by nations like Kenya that stand to be impacted by the dawning era of green steel.