Google has agreed to purchase environmental attribute certificates linked to up to 91,000 metric tons of steel produced during the first year of operations at Stegra’s Boden plant in Sweden.
Google says the steel is being designed to meet the IEA’s definition of near zero emissions steel, while Stegra estimates that its production route can reduce CO₂ emissions by up to 95% compared with conventional blast furnace steelmaking.
The agreement illustrates both the opportunity and the limitations of emerging procurement models for low emissions industrial materials. Google can support demand for steel produced through a substantially different production route without requiring all of the physical material associated with the environmental attributes to enter its own supply chain.
Stegra’s Boden facility is being built around an integrated hydrogen based direct reduction process. Instead of using coke and coal in a blast furnace to remove oxygen from iron ore, the plant will use hydrogen produced through electrolysis powered by renewable electricity. The hydrogen reacts with the oxygen in the iron ore, producing water vapor rather than the carbon dioxide generated by a conventional carbon based reduction process.
The company says its Boden operation will use more than 100,000 tonnes of green hydrogen annually and is designed to produce up to 5 million tonnes of steel per year by 2030 as production ramps up. Stegra’s stated emissions intensity target is below 200 kilograms of CO₂ per tonne of steel, compared with around 2 tonnes per tonne for traditional blast furnace steelmaking.
The underlying technology is not the only challenge. Hydrogen based direct reduced iron requires large volumes of low carbon electricity, electrolyzer capacity and suitable iron ore feedstock, while the economics remain sensitive to electricity and hydrogen costs.
The IEA estimates that early commercial plants using 100% hydrogen blends in direct reduction can currently have production costs 50% to 140% higher than conventional blast furnace basic oxygen furnace production, depending on the region. That cost differential is one reason demand commitments from large industrial buyers are becoming an important component of the financing model for first generation projects.
The Google agreement addresses another constraint: the initial supply of near zero emissions steel is limited geographically and in volume.
Stegra’s Boden facility is under construction in northern Sweden and is designed as an integrated site containing green hydrogen production, direct reduced iron production and steelmaking. The company says it expects to begin delivering steel during 2026, with production ramping toward its longer term capacity.
That creates a mismatch between where low emissions steel is produced and where multinational companies need steel. Automotive manufacturers, construction companies and technology companies can have supply chains spanning multiple countries, while the initial generation of hydrogen based steel plants will be concentrated in regions with access to low cost renewable electricity, suitable infrastructure and raw materials.
Environmental attribute certificates provide one mechanism for addressing that mismatch.
Under a book and claim model, the environmental attribute associated with a unit of near zero emissions material can be separated from the physical steel. This allows a company to support production attributes even when obtaining the physical material from the same facility is impractical.
Stegra has been developing a dedicated framework for this market with Electra, Charm and the Roundtable on Sustainable Biomaterials, with support from the Rocky Mountain Institute. The initiative is intended to establish processes for issuing, tracking, verifying and transferring environmental attributes associated with near zero emissions iron and steel.
That infrastructure is important because the credibility of certificate based procurement depends on avoiding double counting. If both the physical buyer and the certificate buyer were able to claim the same emissions reduction, the environmental value of the system would become difficult to verify.
For Google, the agreement forms part of a broader effort to reduce emissions associated with the materials used to build its infrastructure. The company estimates that incorporating lower carbon construction materials could reduce embodied carbon emissions from data center infrastructure by up to 40%. Google also said that in 2025 it incorporated low carbon concrete, steel or a combination of both into more than 20 construction projects.
Steel is particularly relevant because data centers require substantial quantities of structural materials, while their construction can generate emissions before the facilities begin consuming electricity.
The certificate model allows Google to participate in the development of a new steel supply chain even while the physical availability of the product remains constrained. However, certificates do not change the physical emissions intensity of steel used elsewhere in Google’s construction projects. Their function is to transfer the environmental attribute associated with qualifying production, which makes robust accounting rules and transparent chain of custody particularly important.
The IEA has identified this issue as a broader requirement for industrial decarbonization. Its proposed principles for near zero emissions definitions include transparent emissions boundaries, clear accounting methodologies and physical technologies capable of achieving near zero emissions without relying on offsets or emissions reduction credits.
That distinction places environmental attribute certificates in a different category from offsets. Their value depends on demonstrating that the underlying steel was actually produced through a qualifying low emissions process and that the associated attribute has not already been claimed by another party.
Stegra is already developing a conventional customer base for physical steel, including agreements with companies such as ZF, Scania, Marcegaglia and Purmo Group. The company has also announced agreements with renewable power suppliers and raw material providers as it builds the Boden production system.
The Google agreement therefore represents a different layer of market development. Instead of being structured solely around physical steel delivery, it creates demand for the environmental characteristics of production.
That distinction could become increasingly important as early hydrogen steel projects enter operation. Physical offtake contracts can provide revenue visibility, but certificate markets can potentially widen the pool of companies able to financially support low emissions production beyond those capable of integrating the physical material into their own manufacturing chains.
The model will ultimately depend on measurement and verification. The IEA argues that internationally compatible definitions and emissions measurement methodologies are needed to make near zero materials comparable across markets. Its proposed steel threshold ranges from 50 to 400 kilograms of CO₂ equivalent per tonne, depending on the share of scrap used.
For Stegra and Google, the immediate issue is therefore larger than a single procurement agreement. The Boden project is testing whether renewable electricity, hydrogen based direct reduction and electric steelmaking can operate at industrial scale, while the certificate agreement is testing whether the resulting environmental attributes can be measured and traded in a way that gives buyers confidence and provides producers with an additional source of demand.
