Global Green Steel Market: Trends & Growth (2024-2030)

Market Outlook

The Green Steel market was valued at USD 738 million in 2023 and is projected to grow to USD 39,526 million by 2030, with a compound annual growth rate (CAGR) of 78.9% from 2024 to 2030. The Green Steel Market focuses on producing steel using environmentally sustainable technologies to reduce carbon emissions significantly. Traditional steel production is energy-intensive, relying heavily on coking coal, which leads to high levels of CO2 emissions.

Green steel production minimizes this impact through innovative processes such as using hydrogen instead of coal, using renewable energy in electric arc furnaces (EAFs), and maximizing the use of recycled steel in production. Market drivers include global decarbonization initiatives, where governments impose stringent emissions regulations to combat climate change. The construction sector's shift toward sustainable materials and the rise of green buildings further increase the demand for eco-friendly steel.

Corporate sustainability goals, coupled with rising consumer awareness of environmental issues, are pushing various industries like automotive and manufacturing to seek low-carbon alternatives, including green steel.

Opportunities abound in the adoption of hydrogen-based technologies, which promise near-zero carbon emissions in steelmaking. The circular economy model, focused on recycling steel, offers a pathway to cost-effective, low-emission production. Green finance, including ESG investments, is growing rapidly, providing financial incentives to companies adopting sustainable practices. This opens up opportunities for companies to scale operations or enter new sectors such as electric vehicles and renewable energy infrastructure, where demand for green steel is expected to rise.

Government policies and incentives aimed at fostering clean technology development also provide support for innovation in the sector, helping to make green steel more competitive and accessible across global markets.

Key Insights

Europe accounted for the largest share of the Green Steel market at 51.30% in 2023. Europe is at the forefront of the green steel market, driven by strict environmental regulations, ambitious carbon neutrality goals, and strong support for green technology. The European Union's Green Deal is a major initiative pushing for decarbonization across industries, including steel manufacturing.

In terms of Production Process, the Electric Arc Furnace (EAF) accounted for a major share of 68.91%in 2023. The EAF technology enables steel producers to significantly reduce their carbon emissions compared to traditional blast furnace methods. It uses scrap steel as a primary input and requires less energy, resulting in a decrease in greenhouse gas emissions.

Although Direct Reduced Iron (DRI) and hydrogen-based steelmaking are emerging technologies, they are still in the early stages of widespread adoption. Hydrogen-based steelmaking, in particular, is considered a future solution to fully decarbonize the steel industry. However, the infrastructure and supply chains required for green hydrogen are not yet fully developed.

Market Dynamics

Increasing consumer and corporate preference for eco-friendly products.

The rising demand for environmentally friendly products is driving the green steel market. As global awareness of climate change and environmental degradation grows, consumers and businesses are prioritizing sustainability in their purchasing decisions. This shift is not only due to environmental concerns but also a desire to align with corporate social responsibility (CSR) and Environmental, Social, and Governance (ESG) goals.

Consumers are now more informed about the environmental impact of the products they buy and many are willing to pay a premium for goods made using sustainable practices. In industries like automotive, construction, and electronics, the demand for eco-friendly alternatives is pressuring manufacturers to source materials, including steel, from sustainable sources. Green steel, produced using renewable energy and low-carbon technologies, offers a lower carbon footprint compared to conventional steel, which is produced with fossil fuels.

On the corporate side, businesses are increasingly incorporating sustainability into their core strategies. Many companies have adopted ESG frameworks, which require them to reduce their environmental impact, including the carbon footprint of their supply chains. As steel is a major component in various industrial processes, sourcing green steel is a critical step for businesses aiming to meet their sustainability targets.

Moreover, investors are now focusing on companies with strong ESG credentials, encouraging businesses to adopt greener materials and technologies. Failing to adapt to these expectations can lead to reputational damage, loss of consumer trust, and reduced access to capital.

In summary, the growing consumer and corporate preference for eco-friendly products is significantly influencing the demand for green steel. As sustainability becomes a central priority, this trend will likely continue to propel the green steel market forward.

The high capital required for green steel technologies discourages widespread adoption in the industry.

The high capital required for green steel technologies presents a significant barrier to widespread adoption in the steel industry. Traditional steel production methods, such as using blast furnaces fueled by coal, are well-established and cost-effective, making them difficult to replace with greener alternatives. However, transitioning to low-carbon steel production, which involves using technologies like hydrogen-based Direct Reduced Iron (DRI) and electric arc furnaces powered by renewable energy, requires substantial investment in new infrastructure, equipment, and research.

One of the key expenses is the development of green hydrogen, a critical component for many green steel processes. Producing green hydrogen through electrolysis requires significant energy input, and currently, this energy needs to come from renewable sources to maintain low emissions. Building the renewable energy infrastructure, including solar and wind farms, to support green steel production further adds to the capital burden.

Moreover, retrofitting existing steel plants to accommodate these new technologies is costly. The transition often involves not just upgrading current facilities but also constructing entirely new production lines or even greenfield sites, which require heavy financial outlays.

For smaller steel producers, this investment can be particularly prohibitive, as the return on investment (ROI) may take years to realize due to the relatively high cost of green steel in comparison to traditionally produced steel.

As a result, many companies are hesitant to make these capital-intensive investments without sufficient government incentives, subsidies, or assurance that market demand for green steel will remain strong enough to justify the expense.

Segmental Analysis

Based on Production Process, Green Steel market is segmented into Electric Arc Furnace (EAF), Direct Reduced Iron (DRI), Molten Oxide Electrolysis. 

The Electric Arc Furnace (EAF) is a highly efficient and flexible steel production process widely used in the global green steel market. Unlike traditional blast furnaces that rely on coal or coke, EAF uses electricity to melt scrap steel or direct reduced iron (DRI), significantly reducing carbon emissions. The process begins by charging the furnace with steel scrap or a combination of scrap and DRI. Large electrodes are then used to generate an electric arc, which heats the material to a high temperature, melting it into molten steel. Once melted, the impurities are removed, and alloying elements are added to achieve the desired steel composition.

EAF technology is a key driver in the transition to green steel because it can incorporate renewable energy sources such as wind or solar power to generate the required electricity. Additionally, the use of scrap metal in the process makes it highly sustainable by reducing the need for virgin raw materials, thus conserving resources and minimizing mining-related environmental impacts. Modern EAFs also integrate energy recovery systems to further enhance energy efficiency.

Compared to traditional steelmaking, EAF offers a significant reduction in carbon dioxide emissions, especially when powered by renewable energy. This makes it a crucial component in efforts to decarbonize the steel industry, which is responsible for a substantial portion of global greenhouse gas emissions. As countries and industries aim for carbon neutrality, EAF-based steel production is expected to grow, contributing to a more sustainable and environmentally friendly future for steel manufacturing.

Regional Landscape

In the context of regional analysis, the Green Steel market includes North America, Europe, Asia Pacific, South America, and the Middle East and Africa.

The market size of the Europe was valued at USD 378.48 million in 2023 and is expected to reach USD 19,865 million by 2030, with a CAGR of 78.4% during the forecast period. Europe is leading the way in the green steel market due to strict regulations, ambitious sustainability goals, and a commitment to reducing carbon emissions. The European Union's Green Deal aims for carbon neutrality by 2050, providing a strong policy framework that encourages investments in low-carbon technologies. This strategy has led European countries to adopt innovative practices in steel production and make significant progress in decarbonization efforts. 

Key players in the European market, such as ArcelorMittal, SSAB, and thyssenkrupp, are spearheading initiatives focused on hydrogen-based steelmaking and carbon capture and storage (CCS) technologies. For example, SSAB has partnered with Volvo to produce fossil-free steel using hydrogen, marking a significant step toward sustainable manufacturing practices.

Additionally, Europe benefits from a well-established infrastructure for renewable energy, allowing steel producers to transition from traditional coal-based methods to cleaner alternatives. The availability of green hydrogen is crucial in this shift, as it serves as a key reducing agent in iron ore processing.

The European market is characterized by collaboration among various stakeholders, including governments, research institutions, and private companies, fostering an ecosystem that prioritizes innovation and sustainability. Significant investments in research and development ensure the continuous advancement of green steel technologies.

Competitive Landscape

Some of the major companies operating within the Green Steel market are: Outokumpu Oyj, China Baowu Group, Salzgitter AG, Nippon Steel Corporation, Nucor Corporation, Swiss Steel Group, ArcelorMittal, SSAB, Emirates Steel Arkan Group, H2 Green Steel  and Others.

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