Despite the financial crisis and uncertain technology, Stegra is getting another stamp of approval from Brussels. The EU classifies the project as strategic - while criticism is growing against continued public support.
The Swedish Agency for Economic and Regional Growth has given Stegra's plant in Boden the status of Strategic Net-Zero Project, a label for projects that the EU considers important for climate goals.
The message comes at a time when the company has been struggling with billion-dollar deficits, delayed financing and questions about the viability of its business model. It also comes just weeks after the Wallenberg sphere stepped in as a new major power factor in the company, with billions in capital and a leading ownership position.
Quality stamp in the middle of the crisis
Stegra has already received €250 million in support from the EU Innovation Fund. Now comes another official boost, despite the fact that large-scale production has not yet been proven to work.
”Recognition as a strategic net zero project confirms Stegra's importance for Europe's industrial resilience.”, the message says.
The Swedish Agency for Economic and Regional Growth points to reduced emissions, reduced import dependence and strengthened competitiveness as reasons. At the same time Jacob Wallenberg recently defended the investment, arguing that there is long-term demand for green steel, despite questions about technology, electricity needs and profitability. The fact that the EU recognition comes at the same time as Wallenberg is making a major investment is likely to reinforce the view that the project now has both financial and political protection.
Politics before economics?
But the appointment raises questions. Stegra is still chasing new billions and has recently needed to be rescued through a new round of funding.
Critics may see the announcement as yet another example of how political prestige projects are kept under wraps, despite growing financial risks. The fact that Wallenberg is taking greater control and Harald Mix is being pushed aside reinforces the image of a project that is not only being rescued financially - but also fundamentally reshaped.
The question is whether the appointment reflects real strength, or how far the EU is prepared to go to defend its green industrial line.
Continuing to pump money into the green bubble is evidence of mental illness.