EU and Swedish funding to help reduce Sweden's CO2 emissions by 7% through modernization of Luleå plant
Swedish steel company SSAB is receiving SEK 1.45 billion (€126 million) in funding from the Just Transition Fund, established by the European Union to support the environmental transformation of industry. The funding also includes national assistance from the Swedish Agency for Economic and Regional Growth, the company said in a press release.
The purpose of the financing is to accelerate the transition to zero-carbon steel production, including the modernization of the company’s production facilities in Luleå. The company plans to replace traditional blast furnaces (BFs) with modern electric arc furnaces (EAFs) and rolling mills, which will significantly reduce CO2 emissions.
This technological transformation is expected to reduce Sweden’s overall emissions by 7%, with another 3% to be achieved through the modernization of the Ökseläsund plant. The new production facilities in Luleå will be launched at the end of 2028, and the plant will reach full capacity in 2029. In Åkselehusund, the new EDP is expected to start up in late 2026.
“The funding from the EU and the Swedish Agency for Economic and Regional Growth enables us to maintain a high pace in the transition to fossil-free steel production. It is a clear signal from both the EU and Sweden about the importance of our transformation. It will strengthen not only our competitiveness,” said Johnny Sjöström, CEO of SSAB.
The Just Transition Fund focuses on supporting regions with high carbon emissions by helping them adapt to new environmental standards. In Sweden, the steel, metal, and cement industries are among its targets. Norrbotten’s steel industry has been prioritized for this funding.
“It is important for Norrbotten and for Sweden that the steel industry now accelerates its climate transition while maintaining competitiveness. It is also important for reaching Sweden’s climate targets,” said Elisabeth Backteman, CEO of the Swedish Agency for Economic and Regional Growth.
Earlier, SSAB received almost SEK 38.6 million from the same fund for SSAB Academy, a pilot program to develop employee competencies in Luleå.
In the spring 2024, SSAB decided to build a modern, environmentally friendly mini-steel plant in Luleå. The project involves shutting down the current blast furnace-based production system. This will reduce the country’s CO2 emissions by 7%, in addition to the 3% reduction achieved through the conversion of the Oxelosund plant.
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