by Green steel refers to steel produced using low-carbon production methods and renewable energy sources to reduce greenhouse gas emissions. It is gaining prominence as a more sustainable alternative to traditionally produced steel due to the carbon-intensive nature of conventional blast furnace-basic oxygen furnace steelmaking. Green steel production techniques involve utilizing hydrogen in direct reduction of iron ore to produce sponge iron or using electric arc furnaces charged with scrap steel and DRI instead of coking coal. This provides an eco-friendly production route for steel capable of minimizing carbon footprint at a time when countries are aggressively working towards decarbonization goals to mitigate climate change.
The global green steel market is estimated to be valued at US$ 117.13 Bn in 2024 and is expected to exhibit a CAGR of 60% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the green steel market are Ansteel Group, ArcelorMittal, Boston Metal, China Baowu Steel Group, Henan Guoxin, Hesteel Group, Hyundai Steel, JFE Steel, Nucor Corporation, Posco, SSAB, Tata Steel.
The key opportunities in the market include Green Steel Market Demand rising demand for sustainable construction materials from developed economies, government support through favorable policies and funding for green investing projects, and growing investments by major steel producers in adoptinng hydrogen DRI technologies.
Technological advancements such as switching to hydrogen direct reduction of iron ore and electric arc furnaces, molten oxide electrolysis, and carbon capture utilization and storage are helping steel mills lower carbon footprint and transition to net-zero production over the long-term.
Market Drivers
Stringent environmental regulations: Growing regulations worldwide to curb greenhouse gas emissions from carbon-intensive industries like steel is a major driver for green steel adoption. The European Union, China, US have introduced policies to penalize high-carbon producers and incentivise low-carbon production routes.
Consumer demand for sustainable products: Rising awareness about carbon footprint and demand for green products from end-use industries like construction, automotive, packaging is incentivising steel manufacturers to lower the carbon intensity of their outputs.
Government support: Favourable policies including carbon pricing, tax rebates, funding & investments for decarbonising hard-to-abate industries provides necessary support to steel companies for transitioning to green production methods.
Current challenges in Green Steel Market
One of the major challenges currently faced by the Green Steel Market Size And Trends is high capital investment requirements. Transitioning from conventional steel production processes to green steel production processes involves huge capital expenditure for installing technological equipment and systems for reducing carbon emissions. Another challenge is lack of widespread availability of clean energy sources. Reliance on fossil fuels like coal for powering electric arc furnaces poses difficulty in achieving the goal of producing carbon neutral steel. Developing and building infrastructure for sustainable energy supply remains a hurdle.
SWOT Analysis
Strength: Green steel production methods help reduce dependence on fossil fuels and minimize carbon footprint of the steel industry. Production of green steel aligns well with the sustainability goals of countries and regulators.
Weakness: Cost of producing green steel is significantly higher compared to traditional steel making processes since new technologies are involved. Transition will require strong financial support from governments.
Opportunity: Growing global focus on addressing climate change and transitioning to clean energy presents huge market opportunity for green steel producers. Demand for low carbon steel is expected to rise rapidly in the coming years.
Threats: Conventional steel makers dominate the global market currently and may slow down adoption of green steel technologies. Uncertainty over regulatory policies in some regions poses risks.
Geographical regions
In terms of value, Asia Pacific region currently accounts for the major share in the global Green Steel Market owing to the presence of large steel producing countries like China, Japan and India. China alone contributes over 50% of the global steel production currently. North America and Europe are other major regions driving the market ahead supported by stringent emission norms and financing for clean technologies development.
Fastest growing region
The Green Steel Market in Latin America is expected to emerge as the fastest growing regional market during the forecast period. This is attributed to rapid industrialization and infrastructure growth in countries like Brazil, positive government policies supporting decarbonization of key industries and availability of raw material reserves. The regional push for sustainable development presents significant opportunities for green steel producers to establish manufacturing base and cater to the rising demand.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it.
About Author:
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163)
