Market Definition

The green steel manufacturing process is the hydrogen-based direct reduction of iron ore. The process involves chemically reducing solid iron ore using green hydrogen to produce an intermediate product known as sponge iron. Various countries are expected to use green steel to reduce carbon footprints and achieve sustainable development goals in the future. It is made using green hydrogen derived from renewable sources without fossil fuels. The consumer & producers' propensity toward sustainable products & increasing government initiatives globally have contributed significantly toward bolstering the growth of the Global Green Steel market.

Market Insights & Analysis: Global Green Steel Market (2026-32):

The Global Green Steel Market size was valued at around 28.77 billion tons in 2025 and is projected to reach 54.5 billion tons by 2032. Along with this, the market is estimated to grow at a CAGR of around 14.8% during the forecast period, i.e., 2026-32.

This is in line with the rising shift towards sustainable steel production by steel manufacturers to achieve net-zero emissions. Moreover, the surging demand for low-carbon steel from various end-user industries, such as automotive, building & construction, etc., is also expected to rise with their targets to use sustainable products. The global market is likely to be driven primarily by the mounting inclination of governments in the US, Canada, Germany, France, the UK, etc., toward lowering carbon emissions & adopting sustainable products & manufacturing practices in verticals, such as construction, electronics, industrial equipment, etc.

According to the World Steel Association, global steel production in 2025 is projected to reach approximately 1,749 million tons (Mt), with the average CO2 emissions per ton of steel produced now estimated at 2.18–2.33 tons of CO2e (including Scope 1, 2, and 3 emissions). This means the steel industry is responsible for about 4.1 billion tons of CO2e annually, representing roughly 7–8% of global greenhouse gas emissions. Growing industrial emissions from steel products have compelled organizations to launch strategies & partnerships with private steel-making entities to boost the production of green steel globally. Moreover, the progressive approach of companies in the automobile sector, such as General Motors, BMW, etc., to use recycled & low-carbon steel for production is one of the major shifts observed that would influence the demand for green steel in coming years. For instance:

By 2025, BMW Group is aiming to procure steel manufactured with up to 95% less greenhouse emission without using fossil resources such as coal by 2025. To achieve this, the automaker has partnered with swedish startup H2 Green Steel which uses hydrogen and only green power from renewable energies for steel production.

Moreover, the burgeoning research & development in Fuel Cell Electric Vehicles (FCEVs) & hydrogen-powered cars would have a positive impact on the technological advancement in green steel as it is produced entirely from renewable sources such as green hydrogen. Further, some countries in the Asia-Pacific region, such as China, South Korea, New Zealand, and others, are already using FCEVs, with companies such as Toyota, Hyundai, and others. They are also planning to use green hydrogen in their automobiles in the forthcoming years, further stimulating the Global Green Steel market growth.

Global Green Steel Market Scope:

Global Green Steel Market Driver:

Carbon Neutrality Targets of Countries to Strengthen Green Steel Market – Green Steel is anticipated to play a significant role across the globe in helping nations achieve their sustainable development goals & minimize their carbon footprints. Green Steel plays a critical role in decreasing the dependence of the countries on energy imports, safeguarding the environment, and satisfying the growing energy needs globally.

Additionally, there is a significant amount of CO2 emission while producing steel. Thus, governments around the world are developing decarbonizing strategies and promoting green steel, especially in sectors such as automotive & construction.

Global Green Steel Market Opportunity:

Decarbonization Mandates and Climate Regulations in Key Industries – The strongest opportunity driving the expansion of the green steel market in the coming years is the rapid establishment and enforcement of global decarbonization mandates and climate regulations targeting steel-intensive industries. Between 2024 and 2025, several key regulatory frameworks have been launched to accelerate the shift toward low-carbon steel production. For instance, the European Union’s Carbon Border Adjustment Mechanism (CBAM), effective from 2024, imposes carbon tariffs on steel imports, incentivizing steelmakers worldwide to adopt cleaner production practices to remain competitive. Similarly, countries like the US and China have tightened emissions standards and introduced subsidy programs encouraging green hydrogen and renewable energy use in steel manufacturing. These mandates compel high-demand sectors such as automotive and construction to source green steel to comply with sustainability targets. Leading automakers like BMW and General Motors have proactively integrated low-carbon and net-zero steel within their supply chains in response to these policies, exemplifying market validation. This convergence of regulatory pressure and industry commitment creates a robust, credible growth engine for widespread adoption and investment in green steel technologies globally.

Global Green Steel Market Challenge:

Complex Carbon Accounting Calculation to Hinder the Market – The primary issue in the Global Green Steel market has been a lack of knowledge of carbon accounting calculations, as estimating the levels of carbon offset during a production process is extremely complex. This, in turn, is delaying the process of recognizing green steel, even when there is a small fraction of the companies in 2022 in northern Europe producing fossil fuel-free steel.

However, a few digital tools have been developed by companies such as SMS Group & others. Nonetheless, quantifying the number of carbon emissions from multiple processes of a complete manufacturing unit has proven difficult for companies in recent years. As a result, when original equipment manufacturers are unable to demonstrate the emission-free product they are offering, the market's complete development is hampered.

Global Green Steel Market Trend:

Emerging Innovations Transforming Steel Production – Technological advancements are revolutionizing steel production, fundamentally enabling the green steel market's rapid growth. Foremost is the emergence of hydrogen-based direct reduced iron (DRI) technology, which replaces coal with green hydrogen, produced via renewable electricity, to reduce iron ore, emitting only water vapor instead of CO2. The world’s first large-scale green hydrogen steel plant in Boden, Sweden, operated by H2 Green Steel, exemplifies this breakthrough, setting a global benchmark for emission reductions up to 95%. Complementing this is the growth of electric arc furnace (EAF) production using recycled scrap steel powered by renewable energy, offering a flexible, lower-emission alternative to traditional blast furnaces. Innovations like Polymer Injection Technology, which replaces fossil carbon with recycled polymers in slag-making, also contribute to emission reductions. Integrated digital automation and power management solutions are further optimizing energy use and process efficiency in these new production lines. These cutting-edge technologies are collectively enabling a scalable, economically viable transition to sustainable steelmaking, underscored by strategic investments and pilot-to-commercial scale-up projects worldwide.

Global Green Steel Market (2026-32): Segmentation Analysis

The Global Green Steel Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2026–2032 at the global, regional, and national levels. Based on the analysis, the market has been further classified as:

Based on Production Technology:

• Electric Arc Furnace
• Molten Oxide Electrolysis

Here, Electric Arc Furnaces are expected to acquire a larger share in the Global Green Steel market over the forecast years. This can be explained by the fact the electric arc furnace efficiently reduces the energy required to make green steel, making it widely accepted for producing carbon-free steel. SSAB announced its plan to replace blast furnaces at its Oxelösund steel plant in Sweden with an electric arc furnace (EAF), marking a significant step in its green steel transition. This move aims to produce SSAB Zero™, steel made using recycled scrap and fossil-free electricity, resulting in virtually zero carbon emissions. Thus, implying the considerable hold of EAF in the overall market in the coming years and projecting a notable growth rate.

Furthermore, another crucial reason behind the majority share of EAF technology is its well-established base for the production of green steel. In addition, the surge in the price of CO2 emission certificates for steel manufacturers has been further facilitating the usage of technology for the manufacturing of green steel. For instance:

• The cost of carbon emission permits per ton of CO2 increased from nearly USD 70 to USD90 per ton in 2025, as per the EU Emissions Trading System (EU ETS).

Additionally, governments' push to reduce carbon emissions during steel manufacturing across Europe shall also display an increasing deployment of electric arc furnaces for green steel production from 2025 onwards.

Based on Energy Source:

• Solar
• Wind
• Others (Hydropower, Biomass energy, etc.)

Among them, other Renewable Energy Sources, including hydropower, biomass energy, and similar segments, emerged as the dominant energy source for green steel production in 2025, holding the largest share of 61%. The established infrastructure, reliability, and scalability of hydropower and biomass, alongside governmental support for diversified clean energy portfolios, have positioned Other Renewable Energy Sources as the leading segment for green steel manufacturing. This dominance is expected to continue in the coming years as industries prioritize stable, large-scale renewable inputs for steelmaking, supported by growing investments and favorable emission policies

Based on End User:

• Buildings & Construction
• Automotive & Transportation
• Electronics
• Industrial Equipment
• Others (FMCG, Defence, etc.)

Of them, the Automotive & Transportation sector is projected to acquire a considerable share of the Global Green Steel market during 2026-32. It owes primarily to the growing awareness among automakers of their significantly increased carbon footprints in recent years, which has driven their inclination toward using sustainable products, including green steel, for manufacturing automobiles & spare parts.

Several companies like Daimler AG, Mercedes-Benz AG, and Volvo AB, among others, are showing greater interest in the green steel application. The changes in terms of raw material acquisition for automotive manufacturers are expected to initiate the demand for green steel and help to increase the market in the forecast period.

Global Green Steel Market (2026-32): Regional Projection

Geographically, the Global Green Steel Market expands across:

• Americas
• Europe
• Asia-Pacific
• The Middle East & Africa

Of all the regions globally, the Europe Green Steel market would foresee significant growth in the forthcoming years due to the initiatives taken by the European Union to minimize the carbon emissions from the steel industry by 2032. According to the European Commission, the steel industry is responsible for around 5% of CO2 emissions in the region & 7% globally, which is a major concern to be fixed to meet carbon emission goals. In order to address this, the long-term strategy by the European Union to make a climate-neutral Europe by 2050 is to be implemented, which would positively impact the market of green steel in the region. In line with this, many of the steel manufacturers in the countries such as Germany, Sweden, the UK, Norway, etc., are adopting effective solutions for clean steelmaking to support carbon-neutral targets.

The burgeoning investments to deploy green hydrogen production capabilities in the countries such as Norway, Netherlands, Sweden, etc., are also leading to the sustainable production of green steel. As hydrogen is a reducing agent used in the production of green steel, the increased production capability in European countries would be extensively conducive to the production of green steel in the coming years.

Global Green Steel Industry Recent Development:

• January 2024: Kalyani Steels disclosed plans for green steel production at its newly acquired plant, demonstrating the growing interest among Indian manufacturers in sustainable steelmaking practices.
• January 2024: ArcelorMittal introduced the XCarb Program, setting a focus on carbon-neutral steel production through advanced technologies and increased investments in renewable energy sources, including hydrogen-based steelmaking, while strengthening partnerships across the sector.
• February 2024: Salzgitter Flachstahl GmbH (Salzgitter), a subsidiary of Salzgitter AG, entered a long-term Power Purchase Agreement (PPA) with Octopus Energy’s generation division to secure 126,000 MWh of clean electricity annually for green hydrogen generation and future green steel production in Germany.
• May 2024: Linde announced an agreement to supply industrial gases to the world’s first large-scale green steel plant, underscoring the strategic importance of logistics and infrastructure collaborations in scaling green steel production.

Gain a Competitive Edge with Our Global Green Steel Market Report

• Global Green Steel Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
• Global Green Steel Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

*Reports Delivery Format - Market research studies from MarkNtel Advisors are offered in PDF, Excel and PowerPoint formats. Within 24 hours of the payment being successfully received, the report will be sent to your email address.