The transition from conventional to green steelmaking is characterized by great dynamism, especially within Europe. Green steel is synonymous with steel produced using green hydrogen as a replacement of coke and electric power from regenerative instead of fossil sources.
The green steel market in Europe is driven by a number of supporting factors, including a growing end user base and the diversification of end markets. In virtually all sectors of industry, companies are aiming at reducing their value chain emissions, also referred to as Scope 3 emissions. This is one of numerous reasons why the demand for green steel is growing and a decisive aspect considered in market growth forecasts. Dublin-based market research group “Research and Markets”, for example, has projected an about 75% CAGR (compound annual growth rate) for the European green steel market over the next six years. Hand in hand with this go the prospects of attractive margins attainable on the market.
First movers in green steel production
In 2021, the first market-ready hydrogen-based green steel sold on the European market was for a truck manufacturer. The steel supplier was Swedish SSAB. This does not come as a surprise because Sweden is definitely one of the first movers in terms of investments in green steelmaking technologies. The country has set itself the target to become climate-neutral by 2045. H2 Green Steel, for example, is the name of a greenfield hydrogen-based steelmaking plant to be constructed near the Swedish town of Boden and funded by major European financial institutions.
Investments call for strategic alliances
The transition towards a decarbonized steel industry faces the challenges of higher production costs. With the scrap-based EAF (electric arc furnace) steelmaking route expected to account for the biggest share in future green steelmaking, production costs largely depend on the availability and cost of recycled scrap, and the cost of green energy and alternative raw materials. Nevertheless, there is an obvious trend among companies to join forces for investments in projects that help make steelmaking green. According to the above-mentioned report by “Research and Markets”, the largest investments and two thirds of these green steel projects take place in Europe.
Despite the current political uncertainties and energy supply concerns, there are strong signs of the steel industry moving towards decarbonization and sustainability – or maybe this is just because of these happenings that the green steel market is picking up speed.