Microsoft signed a contract with the green steelmaker Stegra, agreeing to use steel from a hydrogen-powered plant for many of its data centers.
According to Canary Media, the brands announced the deal in September in a press release, saying, "The end game is to source physical materials with the lowest possible CO2 footprint."
The Responsible Minerals Initiative organization helped facilitate the complex contract. The two-part deal involves using Stegra steel for coils in data centers and claiming environmental attribute credits that offset the cost of the clean hydrogen production.
Essentially, Stegra sells its green steel for the price of normal steel, and then Microsoft pays the difference via green credits. This allows the tech brand to support hydrogen steel production, even if they're not actually using Stegra steel on projects outside of Europe.
The steel will come from Stegra's state-of-the-art hydrogen-fueled manufacturing plant in Sweden. Plant construction began in 2022 and is scheduled to finish in 2026. Stegra said the plant could reduce pollution by 95% compared to coal-powered steel production.
It's estimated to produce over 2.7 million tons of steel by 2028 and 5.5 million tons by 2030. Most of this steel is promised to major companies, including Porsche, Ikea, and Mercedes-Benz.
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The new plant will help reduce the harmful carbon pollution created during steel manufacturing, making for cleaner air, water, and soil. This helps all humans, keeping the air we breathe, the water we drink, and food crops safer.
Hydrogen-made steel is more expensive than traditional steel. But wide adoption by companies like Microsoft helps boost the industry so it can become cost-competitive. Without the cost of fossil fuels, producing hydrogen-made steel could become cheaper than regular steel.
Cheaper steel would help the economy, making it easier to build homes, open businesses, buy cars, and produce goods. At the same time, this hydrogen-produced steel would be better for the planet.
This substantial deal is a step toward a cleaner, cooler future where premium steel is affordable and accessible.
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Heck yes 👍 Claire Dougherty, a senior associate at RMI, highlighted how this contract "serves as a proof-of-concept for the role that [certificates] can play in getting first-of-a-kind, near-zero steel projects off the ground," per Canary Media.
In the press release, Melanie Nakagawa, Microsoft's chief sustainability officer, explained that with the green certificates, "we aim to signal demand, enable project financing, and accelerate global production."
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