When the Green Industrial Dreams Begin to Rust!

Stegra – The Dream of Green Steel

When H2 Green Steel launched, the mood was euphoric.
“Fossil-free steel!” “Tens of thousands of jobs!” “Sweden’s next export success!”
Boden’s politicians saw the future flicker like an aurora over the industrial landscape.
The state, pension funds, and corporate giants joined in.
It was prestige. It was climate. It was the future.

But now that future is wobbling. Costs have soared, electricity prices have spiked, financing falters, and the construction demands billions more just to stay alive.

Stegra is currently seeking another 10 billion SEK in new capital. At the same time, state guarantees worth over 10 billion SEK hang in the balance — ready to crash down on taxpayers if the project fails. Swedish pension funds have invested via AMF and the AP-funds — about 3–4 billion SEK in direct and indirect exposure.

This isn’t just venture capital at risk.
It’s our money — yours, mine, and our children’s future pensions.

Northvolt – The Silent Warning

We’ve seen this before.
Northvolt was the first symbol of Sweden’s green pride.
A massive battery project, funded by a blend of state loans, European programs, and private investors. Once hailed as “Europe’s Tesla,” it’s now being whispered about as “Europe’s Solyndra.”

Northvolt has already been forced to slow down, lay off staff, and restructure.
Production costs have ballooned. Profitability has vanished.
The green sheen has peeled away.

Suddenly, it became clear that neither the technology nor the market was ready for such grand promises.

It should have been a wake-up call.
But Sweden has a strange talent for not learning from its mistakes.

Politics Loves an Industrial Fairy Tale

It’s almost ritualistic.
The moment someone says “green,” “sustainable,” or “future industry,” the state treasury opens.

Governments of all colors pour money into projects that promise much and deliver… mainly press releases.

When venture capitalists wink at the climate sky, politicians see an opportunity to look brave.
And when cranes rise in the north, everyone wants to be in the photo.
The “green transition” has become an election slogan, a PR campaign, a moral shield where economic logic no longer applies.

But behind the lofty visions lies an uncomfortable truth: the risks are socialized, the profits privatized.
When it succeeds, the companies are celebrated.
When it fails, the state — meaning the taxpayers — picks up the bill.

Sweden’s Game of Guarantees

The National Debt Office has issued loan guarantees exceeding 10 billion SEK to Stegra.
That means if the project collapses, the state — you and I — will cover the banks’ losses.
That’s money that could have gone to healthcare, education, or elder care.

On top of that, the Swedish Energy Agency has already paid out over 1.2 billion SEK in direct support. Another 2 billion has been requested but not yet granted.

Add it up:
Sweden now faces a public risk exposure of 12–15 billion SEK — for Stegra alone.
Add Northvolt, and we’re talking 20 billion SEK or more in taxpayer risk floating in the “green” haze.

Pension Capital in the Firing Line

And then we have the pension funds — our supposed bastions of stability.

The AP-funds and AMF have invested heavily, both directly and through “green” venture vehicles like Altor and Just Climate.
Altogether, it’s 3–5 billion SEK in exposure to Stegra and similar projects.

How green is it, really, to gamble retirees’ savings on untested industrial schemes?
When projects fail, the value evaporates — while those at the top cash out their stock options long before the collapse is public knowledge.

If you defraud the state, you go to prison.
If a billion-krona project does it, the executives get a new funding round and a glossy sustainability report.

From Vision to Financial Fiasco

Yes, innovation requires risk.
But at some point, risk must be proportional to proof.
There’s a difference between investing — and gambling with public money.

Many of these projects secured billion-krona guarantees before technology was proven, before business models were realistic, and before the market even existed.

Stegra’s process relies on green hydrogen.
But hydrogen production is energy-intensive and expensive — especially with volatile electricity prices.
It demands massive renewable output, which in turn requires new grid capacity, storage, and logistics.
It’s a chain of uncertainties.

And yet politicians keep talking as if everything is under control.

When Symbolism Replaces Economics

This isn’t about steel, batteries, or climate anymore.
It’s about symbols.

Stegra and Northvolt have become emblems of Sweden as a “future-ready nation” — a political export brand sold to Brussels, Berlin, and Washington.
A way to show we’re “leading the transition.”

But symbols don’t pay the bills.
And when they collapse, we lose more than money — we lose credibility.

When the Truth Creeps Out

Construction costs in Boden have exploded.
Investors hesitate.
And union representatives report that the once-euphoric optimism on site has turned into anxiety.

Meanwhile, politicians still talk about “future jobs.”
But what happens when those jobs never come?
When factories don’t produce, when suppliers go unpaid, and municipalities are left with empty infrastructure?

Then we’ll see the same politicians back in front of the same cameras — this time explaining why the money is gone.

The Political Accountability Gap

Who takes responsibility when green industrial dreams turn into financial nightmares?

Is it the government that approved the guarantees?
The agencies that handed out the subsidies?
The fund managers who gambled with pension money?
Or no one at all?

Right now, it seems to be the latter. Everyone points elsewhere.

But someone must answer — not only for the decisions made, but for the culture of industrial nationalism that’s taken root: where any project with a green label becomes sacred, and criticism is treated as betrayal of the future.

A New Kind of Risk Culture

There’s something paradoxical about calling yourself “climate-smart” while throwing billions at untested ventures.

A truly sustainable policy must be grounded in realism, not PR-driven hype.

Stegra and Northvolt are not isolated projects — they’re symptoms of a new risk culture:

• Where the state acts as insurer for private investors.

• Where political prestige outweighs sound economics.

• And where real-world feasibility comes second to slogans.

The Way Forward

Investing in innovation isn’t wrong.
But doing so without learning from failure is.

We need a new model for green industrial policy, one based on three simple principles:

1. Proof before payment.
   Vision is fine — but prototypes matter more.

2. Shared risk, shared reward.
   If the state guarantees a loan, owners must take the same downside risk.

3. Full transparency.
   No hidden funds, no opaque guarantees. If public money is used, the public deserves to see every krona.

When the Dream Rusts

Sweden needs optimism.
But optimism built on denial isn’t progress — it’s delusion.

Stegra might still succeed. That would be great.
But it will take honesty, accountability, and a long-overdue end to the green euphoria.
There’s nothing sustainable about building the future on credit, guarantees, and wishful thinking.

If the project collapses, one truth will remain:
It wasn’t the steel that was green — it was the politics.
And when the paint flakes off, what’s left is rust, debt, and silence.

Epilogue

It’s easy to call yourself the “land of the future.”
It’s harder to foot the bill when that future never arrives.

If Stegra falls, it won’t just be a factory in Boden collapsing — it’ll be a political illusion crashing down.
An illusion that mistook courage for recklessness, and climate ambition for financial negligence.

The question is no longer whether we can afford to invest in green industry.
The question is whether we can afford to keep doing it like this.

Sources and Further Reading

• Swedish National Debt Office – Green Credit Guarantee for H2 Green Steel

• Stegra – Debt Financing for Large-Scale Green Steel Plant

• Reuters – Stegra Seeks Additional €975 Million Financing

• Swedish Energy Agency – Industriklivet Support for H2 Green Steel

• OECD – H2 Green Steel Case Study 2024

• ScienceDirect – “Green Steel Investments in the EU: Pie in the Sky?”

• Financial Times – Swedish PM Rules Out Government Rescue of Troubled Northvolt

• The Guardian – “EV Battery Startup Northvolt Files for Bankruptcy in Sweden”

• GTR Review – “Export Credit Agencies Exposed to Northvolt Risk”

• IPE – “Swedish Government Review of AP Funds’ Unlisted Methods”

• GIS Reports Online – “Sweden Fumbles Its Green Transition”