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.
The Global Green Steel market is projected to grow at a CAGR of around 12% during the forecast period, 2025-30. 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 World Steel Association, in 2020, 1,860 MT (Million tons) of steel was produced globally, which contributed to an average of 1.851 tons of CO2 into the atmosphere. 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:
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.
Based on Production Technology:
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. In 2020, Tata Steel Europe announced its plan to start generating green steel with the electric arc furnace (EAF) production technology in the Netherlands. Along with Tata steel, ArcelorMittal announced its strategy of producing fossil-free steel from EAF technology in Hamburg, Germany. 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:
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:
Among them, both sources of energy, i.e., Solar & Wind, are predicted to hold a sizeable share in the production of green steel globally. In the past, there have been well-established green hydrogen production plants in Europe, Asia-Pacific, and North America, using wind energy to produce hydrogen. With the growing investment to produce renewable energy to reduce carbon emissions, the respective categories, i.e., wind & solar, are expected to enhance their market share for the production of green steel in the coming years.
Based on End User:
Of them, the Automotive & Transportation sector is projected to acquire a considerable share of the Global Green Steel market during 2025-30. 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.
Geographically, the Global Green Steel Market expands across:
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 2030. 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.
Recent Developments by Leading Companies
Key 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.
Possible Restraint: 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.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The Green Steel Market is projected to grow at a CAGR of around 12.22% during 2025-2030.
A. Electric Arc Furnace is the leading type in the Green Steel Market during 2025-2030.
A. surging proclivity toward the use of green steel in the automotive industry is expected to drive the Green Steel Market during 2025-2030.
A. The top players in the Green Steel Market are Tata Steel Ltd, H2 Green Steel (H2GS) AB, ThyssenKrupp AG, and ArcelorMittal SA, among others.
A. Europe is anticipated to dominate the Green Steel Market during 2025-30.
A. hefty switching costs from conventional manufacturing process to green steel manufacturing process and complex carbon accounting calculation are some of the possible restraints affecting the growth of the Global Green Steel Market during 2025-30.