Green Steel Demand Forecast: From Automotive Leaders to Public Procurement
The steel industry, historically one of the largest contributors to carbon emissions, is now undergoing a revolutionary transformation. Green steel, produced using low-carbon technologies such as hydrogen-based reduction and renewable energy, has emerged as a crucial solution to balance industrial growth with sustainability goals. With global efforts to achieve net-zero targets by 2050, the green steel market is rapidly gaining momentum across construction, automotive, and energy sectors.
Conventional steelmaking contributes nearly 7–9% of global CO₂ emissions, primarily due to its reliance on coal-fired blast furnaces. The growing urgency of climate change and stringent government policies on decarbonization have made sustainable alternatives a necessity. Green steel offers a pathway to reduce emissions by substituting fossil fuels with hydrogen and renewable power in the production process.
This transition aligns with the Paris Climate Agreement and major economies’ net-zero commitments. Governments in Europe, the U.S., India, and Asia-Pacific are encouraging green steel adoption through subsidies, carbon taxes, and industrial decarbonization funds. The need to shift towards a circular economy is also pushing industries to adopt eco-friendly steel.
Challenges in the Green Steel Transition
Despite strong growth prospects, the market faces several barriers:
High Production Costs: Producing steel with hydrogen and renewable power is more expensive than conventional methods, making cost competitiveness a challenge.
Infrastructure Limitations: Large-scale hydrogen production, renewable energy capacity, and advanced furnaces require massive investments.
Supply Chain Constraints: Scaling green hydrogen supply and ensuring global distribution remain key hurdles.
Uncertain Regulatory Landscape: While Europe has clear roadmaps, other regions still lack cohesive policies to support green steel.