Swedish steel company Stegra has been granted an additional €35 million in state funding from the Swedish Energy Agency. This despite Turkish workers raising alarms about unpaid wages for nine months.
Stegra was founded in 2020 by billionaire Harald Mix through investment company Vargas and was originally called H2 Green Steel. Mix was also involved in starting the battery factory Northvolt, which has now collapsed.
However, the billionaire left the steel company in October, along with his investment company, which was replaced by Just Climate, a subsidiary of notorious climate activist Al Gore's environmental investment firm.
The goal of the new steel plant in Boden, northern Sweden, is to produce steel using hydrogen gas. This is claimed to be "climate-friendly" by reducing carbon dioxide emissions by up to 95 percent.
But the "climate-smart steel" project has not been particularly successful – the plan was for steel production to start in 2024 and also create significant job opportunities for residents in the region.
Instead, the production start has been postponed to the turn of 2026/2027, while both costs and debts have skyrocketed.
No wages for nine months
In November this year, Turkish workers raised alarms that they had not received wages for nine months, and that they were planning to go on hunger strike until the wages were paid into their accounts.
Before this, the guest workers had been promised $13 per hour, which was then reduced to $9 before wages stopped completely.
At the same time, Stegra complained that the money had run out and that they needed an additional €900 million to complete the project, something that tax-funded Swedish public broadcaster SVT reported on.
Green light for additional taxpayer money
Despite the problems with employee wage payments, the Swedish Energy Agency has now decided to grant Stegra €35 million in state funding.
The justification is that the project has "good opportunities to accelerate the transition within the iron and steel industry".
— Swedish industry is on its journey toward fossil freedom. That journey will give Sweden major advantages in the form of increased competitiveness and reduced emissions. Companies are paving the way forward through innovation, new solutions and products. But state support is necessary for industry to be able to make the technological leaps required to succeed with the transition, says Caroline Asserup, Director General of the Swedish Energy Agency, in a press release.
Stegra has already received a significant amount in state funding, with the Swedish Energy Agency previously granting a total of €108 million, of which €76 million has already been paid out. €23 million is planned to be paid out in November.
Furthermore, the company has also received €250 million from the EU's Innovation Fund.