As steel production techniques have advanced over the decades, so too has our love for the material.\u00a0 In fact, it\u2019s almost impossible to imagine a world without it: cars, homes, offices, ships, trains, most medical devices . . .\u00a0 and many commercial buildings \u2013 a world without steel would be almost unrecognizable.\u00a0 You only have to look at the automotive industry to understand our high dependency on steel.\u00a0 Steel comprises well over half of the mass of an average vehicle and has done pretty much since the first cars began rolling off production lines in the 19th<\/sup> Century[1]<\/sup><\/a>.\u00a0 No wonder the International Energy Agency (IEA<\/a>) predicts steel demand will rise by over one-third between 2020 and 2050[2]<\/sup><\/a>.<\/p>\n The undoubted positives that steel brings to our lives, however, need to be weighed against its environmentally unfriendly production methods.\u00a0 Those positives run deep: one reason steel provides a strong backbone to the global economy is because it currently has few rivals.\u00a0 As the World Economic Forum (WEF)[3]<\/sup><\/a> points out: \u201cThere are no scalable substitutes for steel as of today\u201d.<\/p>\n If there\u2019s no realistic alternative, the only answer is to find better ways to manufacture the same material.\u00a0 More sustainable methods that can contribute to, rather than detract from, a net-zero carbon world.<\/p>\n Steel production is a global activity, which makes the transition to greener methods a relatively tricky proposition.\u00a0 Today, production is increasingly concentrated in low-cost production regions, notably Asia, which accounts for more than 70% of global steel production[4]<\/sup><\/a>.\u00a0 In total, more than 1.8 billion tons of steel were produced in 2024, with China leading production by some considerable way[5]<\/sup><\/a>, accounting for over 50% of global annual steel production.<\/p>\n As may be expected, there are stringent decarbonization targets to reduce these figures.\u00a0 The IEA warns that carbon emissions from steel production must at least halve by 2050 to meet global energy and climate goals[6]<\/sup><\/a>.\u00a0 It says decarbonization efforts in the iron and steel sector must \u201caccelerate significantly\u201d in order to align with the \u2018Net Zero Emissions by 2050\u2019 scenario[7]<\/sup><\/a>.\u00a0 It\u2019s a big ask.\u00a0 Nothing short of \u201cthe biggest-ever asset reconfiguration of the steel industry is needed,\u201d according to experts at McKinsey[8]<\/sup><\/a>.\u00a0\u00a0 And, unsurprisingly given the industry\u2019s scale and complexity, it won\u2019t be cheap.\u00a0 According to a report from Deloitte[9]<\/sup><\/a>, decarbonizing the steel industry will need investment levels of around US$ 800 billion by 2050.<\/p>\n Fortunately, the private and public sectors are both committed to working together to tackle this urgent, yet expensive challenge.<\/p>\n In terms of its environmental impact, the current outlook for steel manufacturing is not good:\u00a0 it accounts for about 8% of total global carbon dioxide emissions \u2013 more than any other heavy industry[10]<\/sup><\/a>.<\/p>\n This makes the challenge to decarbonize immense.\u00a0 The good news is the sheer range and depth of innovation underway to take steel production to greener pastures.\u00a0 These include state-of-the-art electric arc furnaces that use less fossil fuel, and furnaces that run on green hydrogen to reduce carbon emissions.\u00a0 There are companies busy innovating with low-carbon iron and others embracing the idea of green-steel hubs that reconfigure the steel value chain in more efficient, less carbon intensive, ways.\u00a0 In fact, the WEF considers steel \u201cone of the best candidates to lead decarbonization efforts\u201d[11]<\/sup><\/a>.<\/p>\n In its \u2018Iron & Steel Technology Roadmap\u2019[12]<\/sup><\/a>, the IEA examines how best to make trade-offs between adopting different technologies.\u00a0 It says the onus is on both the private and public sectors to take responsible actions to help achieve this.\u00a0 Governments need to set and support green steel production targets, and manufacturers must invest in the technologies to achieve those targets.<\/p>\n So far, momentum appears to be moving in the right direction.\u00a0 For instance, the Organisation for Economic Co-operation and Development (OECD<\/a>) points out that over 90% of steelmaking capacity is in countries that have set net-zero carbon emission targets[13]<\/sup><\/a>.<\/p>\n Steel manufacturers themselves are keen to evolve strategies that comply with these objectives, and many have set their own decarbonization targets to guide the way.\u00a0 In its analysis of major steel producers, the OECD reports that \u201cmost [steel] companies\u2026 have set a decarbonisation target (88%), with 65% of the companies in the sample having set net-zero targets\u201d[14]<\/sup><\/a>.\u00a0 However, it\u2019s not all plain sailing.\u00a0 Most companies analysed by the OECD have set themselves post-2050 targets, with only two companies aiming for more ambitious dates ahead of this milestone year.<\/p>\n As the WEF notes, steel is a logical choice to focus on for decarbonizing, largely because in technology terms it is a highly advanced industry.\u00a0 Modern electric arc furnaces are less fossil-fuel intensive than traditional blast furnaces and already manufacture about 29% of conventional steel[15]<\/sup><\/a>.\u00a0 Indeed, the cost of electricity to power these furnaces is a key driver in the competitiveness of steel manufacturers, as highlighted in a green steel report from McKinsey[16]<\/sup><\/a>.<\/p>\n Building more electric arc furnaces alone, however, is not the answer, as most of the power still comes from fossil fuel sources.\u00a0 To make a tangible difference, the same ingenuity that helped to turn iron into steel all those centuries ago is needed again for a fundamental step-change in production methods.<\/p>\n One of the most promising technologies is to use hydrogen rather than fossil fuels, which dramatically reduces the carbon footprint[17]<\/sup><\/a>.\u00a0 However, using the \u2018right\u2019 type of hydrogen<\/a> is critical.\u00a0 Blue hydrogen is created from natural gas, with the resulting CO2<\/sub> pumped into underground storage tanks or captured via CCUS<\/a> technologies, while green hydrogen relies on green electricity and water, with little or no carbon emitted during production.\u00a0 In contrast, grey hydrogen is generally produced using fossil fuels to generate energy, so the overall carbon footprint is much higher.<\/p>\n Progress so far is promising.\u00a0 In the UAE, for example, Masdar (the national renewable energy company) and EMSTEEL have completed the region\u2019s first pilot project using green hydrogen to produce green steel.\u00a0 The facility uses hydrogen generated via renewable-powered electrolysis to extract iron from ore, replacing natural gas in the direct reduction process. \u00a0The project is fully operational and certified to international standards, with the potential to reduce CO\u2082 emissions from steelmaking by up to 95%[18]<\/sup><\/a>.<\/p>\n A similar project in Boden, northern Sweden, is Europe\u2019s first large-scale green steel plant.\u00a0 The H2 Green Steel facility replaces coal with green hydrogen, produced onsite using renewable electricity from hydropower and wind, to reduce iron ore in a direct reduction reactor.\u00a0 This process emits only water vapor, also cutting carbon emissions by up to 95% compared to traditional blast furnace methods.\u00a0 The plant aims to produce five million tons of green steel annually by 2030.\u00a0 H2 Green Steel is also developing additional projects in partnership with energy companies, such as a solar-powered plant in Spain[19]<\/sup><\/a>.<\/p>\n Another approach being adopted is to use carbon capture technology to reduce the carbon footprint of steel production.\u00a0 In the United States, U.S. Steel has partnered with CarbonFree to construct North America’s first commercial-scale carbon capture utilization plant at its Gary Works facility in Indiana.\u00a0 The SkyCycle technology will capture up to 50,000 metric tons of CO\u2082 annually, mineralizing emissions into calcium carbonate for use in various industries.\u00a0 This project, operational by 2026, is a pioneering step in integrating carbon capture into traditional steelmaking and could be scaled across other facilities[20]<\/sup><\/a>.<\/p>\n Of course, there is no steel without first making iron.\u00a0 But like steel manufacturing itself, producing iron is also rather energy hungry, with high carbon emissions due to the dominance of fossil fuels in the iron manufacturing process.\u00a0 Decarbonization initiatives are therefore focusing on greener technologies in the ironmaking part of the process. \u00a0Worcester Polytechnic Institute in the US, for instance, is researching a method that uses low carbon electrolyzed iron powder to produce steel, significantly reducing energy use and greenhouse gas emissions[21]<\/sup><\/a>.<\/p>\n In another example, Swiss-based mining and commodities business Ferrexpo estimates the iron ore pellets it supplies to industry can reduce carbon emissions by 40% for each ton of traditional iron ore sinter fines (or dust) that is replaced with its pellets[22]<\/sup><\/a>.\u00a0 Another mining company, Rio Tinto, uses raw biomass and microwave energy rather than coal to convert iron ore to iron, a process it claims \u201chas the potential to reduce CO2<\/sub> emissions by up to 95% compared with the current blast furnace method\u201d[23]<\/sup><\/a>.<\/p>\n Another area gaining traction is the concept of so-called \u2018green-steel hubs\u2019.\u00a0 As outlined in a report by McKinsey[24]<\/sup><\/a>, a green steel hub is a strategically located industrial cluster or facility dedicated to producing low-carbon steel by integrating renewable energy, green hydrogen, and innovative technologies such as direct reduced iron (DRI) and electric arc furnaces.\u00a0 The hubs are deliberately sited in regions with abundant access to low-cost renewable energy (such as solar, wind, or hydro), suitable raw materials (like high-grade iron ore), and infrastructure that supports advanced, low-emission steelmaking processes.<\/p>\n Unlike traditional steel plants, green steel hubs focus on processes that drastically reduce or eliminate carbon emissions.\u00a0 This is typically achieved by:<\/p>\n However, on the downside, experts say the cost of establishing hubs would be high and involve agreement from many stakeholders, including mining companies, energy providers, logistics companies, investors and governments.<\/p>\n What role can governments play in decarbonizing steel?<\/strong><\/p>\n Governments have a significant role to play in terms of policy and regulation of the steel industry.\u00a0 Indeed, partnerships between governments and the private sector are deemed \u201cfundamental to a sustainable future\u201d by the World Steel Association[25]<\/sup><\/a>.<\/p>\n The World Steel Association recommends that governments take steps to:<\/p>\n According to analysis by research and technology solutions firm Acuity Knowledge Partners, governments appear to be stepping up to the (steel) plate by putting up funds to support decarbonizing efforts[26]<\/sup><\/a> (see graph).<\/p>\n The European Commission, for example, is funding \u201cclean steel\u201d that focuses on lowering energy costs and creating markets for low-carbon products[27]<\/sup><\/a>.\u00a0 In Japan, the government\u2019s Green Innovation Fund is channeling billions of yen into using hydrogen in iron and steel production[28]<\/sup><\/a>.\u00a0 Research into lowering carbon emissions in steel production in the US has received hefty funding from the government to the tune of US$1.2 billion[29]<\/sup><\/a>.<\/p>\n It\u2019s not just governments and manufacturers who are keen for change to a greener future.\u00a0 Another encouraging aspect is how the attitudes of steel product purchasers are changing.\u00a0 It helps if people are happy to pay more for greener products \u2013 and steel is a case in point.\u00a0 In the short term at least, \u2018green steel\u2019 is more expensive steel, due to the additional costs involved in switching to more sustainable production methods.\u00a0 One way round this is to focus on the \u2018green premium\u2019 \u2013 that is, the extra cost that buyers are prepared to absorb, based on the additional value they perceive in doing so.<\/p>\n In the case of green steel, this covers things like better environmental sustainability, complying with regulatory rules on low-carbon production, and enhancing their brand reputation.\u00a0 In some industries, the estimated cost of green steel is negligible anyway.\u00a0 Take vehicle production. Transport & Environment,<\/a> a leading European advocacy organization for clean transport and energy, estimates that switching to 40% green steel would add only \u20ac57 to the price of an electric vehicle in 2050[30]<\/sup><\/a>.\u00a0 A relatively small price, you would think, to help preserve the planet.<\/p>\n With the negative impacts of climate change being felt all around us, there is no time to lose in making the transition to greener steel.\u00a0 The WEF sees the next few years as make-or-break if the steel industry is to become a leading player in decarbonization[31]<\/sup><\/a>.\u00a0 The organization states: \u201cThe global economy needs to start applying resources efficiently to produce the biggest and fastest reduction of emissions possible, making the argument for prioritizing steel a strong one.\u201d<\/em><\/p>\n Momentum is building, with the OECD identifying a growing number of low-carbon steel industry projects in recent years. \u00a0Similarly, the IEA[32]<\/sup><\/a> calls for a \u201clevel playing field\u201d for steel companies so they can move collectively down the decarbonization route.<\/p>\n The fact that steel is recyclable makes it a green product from the outset.\u00a0 With efforts underway to decarbonize its production process, steel\u2019s green credentials can be burnished even further.<\/p>\n Governments are taking the challenge seriously.\u00a0 They understand the economic realities of having a strong, decarbonized steel sector.\u00a0 The private sector is likely to be comfortable investing in new steel production technologies when it can see risk and opportunity is suitably balanced.<\/p>\n The hurdles around the higher cost of green steel can be overcome with government support and efforts to educate purchasers, so demand gradually switches to decarbonized alternatives.\u00a0 The next steps in transforming the steel industry could be as crucial, and impactful, as the invention of steel itself.<\/p>\n <\/p>\n [1]<\/a> https:\/\/www.sciencedirect.com\/topics\/engineering\/automotive-steel<\/a><\/p>\n [2]<\/a> https:\/\/www.iea.org\/reports\/iron-and-steel-technology-roadmap<\/a><\/p>\n [3]<\/a> https:\/\/www.weforum.org\/publications\/the-net-zero-industry-tracker\/in-full\/steel-industry\/<\/a><\/p>\n [4]<\/a> https:\/\/worldsteel.org\/climate-action\/climate-change-and-the-production-of-iron-and-steel\/<\/a><\/p>\n [5]<\/a> https:\/\/worldsteel.org\/media\/press-releases\/2025\/december-2024-crude-steel-production-and-2024-global-totals<\/a><\/p>\n [6]<\/a> https:\/\/www.iea.org\/reports\/iron-and-steel-technology-roadmap<\/a><\/p>\n [7]<\/a> https:\/\/www.iea.org\/energy-system\/industry\/steel<\/a><\/p>\n [8]<\/a> https:\/\/www.mckinsey.com\/industries\/metals-and-mining\/our-insights\/green-steel-hubs-a-pathway-to-decarbonize-the-steel-industry<\/a><\/p>\n [9]<\/a> https:\/\/www.deloitte.com\/content\/dam\/assets-shared\/docs\/collections\/2023\/gx-greenspace-tech-research-green-steel.pdf<\/a><\/p>\n [10]<\/a> https:\/\/www.weforum.org\/stories\/2022\/07\/green-steel-emissions-net-zero\/<\/a><\/p>\n [11]<\/a> https:\/\/www.weforum.org\/stories\/2023\/08\/why-steel-can-be-an-unexpected-leader-in-decarbonization\/<\/a><\/p>\n [12]<\/a> https:\/\/www.iea.org\/reports\/iron-and-steel-technology-roadmap<\/a><\/p>\n [13]<\/a> https:\/\/www.oecd.org\/en\/publications\/addressing-steel-decarbonisation-challenges-for-industry-and-policy_e6cb2f3c-en.html<\/a><\/p>\n [14]<\/a> https:\/\/www.oecd.org\/en\/publications\/addressing-steel-decarbonisation-challenges-for-industry-and-policy_e6cb2f3c-en.html<\/a><\/p>\n [15]<\/a> https:\/\/www.weforum.org\/stories\/2023\/08\/why-steel-can-be-an-unexpected-leader-in-decarbonization\/<\/a><\/p>\n [16]<\/a> https:\/\/www.mckinsey.com\/industries\/metals-and-mining\/our-insights\/green-steel-hubs-a-pathway-to-decarbonize-the-steel-industry<\/a><\/p>\n [17]<\/a> https:\/\/www.weforum.org\/stories\/2022\/07\/green-steel-emissions-net-zero\/<\/a><\/p>\n [18]<\/a> https:\/\/masdar.ae\/en\/news\/newsroom\/masdar-and-emsteel-announce-successful-pilot-project-using-green-hydrogen-to-produce-green-steel<\/a><\/p>\n [19]<\/a> https:\/\/www.mining-technology.com\/news\/green-steel-hydrogen\/<\/a><\/p>\n [20]<\/a> https:\/\/www.esgtoday.com\/u-s-steel-launches-project-to-capture-50000-tons-of-carbon-per-year-at-steel-plant\/<\/a><\/p>\n [21]<\/a> https:\/\/arpa-e.energy.gov\/programs-and-initiatives\/search-all-projects\/low-carbon-iron-production-and-high-silicon-steel-manufacturing-lciphssm<\/a><\/p>\n [22]<\/a> https:\/\/www.ferrexpo.com\/what-we-do\/a-low-carbon-pathway\/<\/a><\/p>\n [23]<\/a> https:\/\/www.riotinto.com\/en\/news\/stories\/decarbonising-steel-making<\/a><\/p>\n [24]<\/a> https:\/\/www.mckinsey.com\/industries\/metals-and-mining\/our-insights\/green-steel-hubs-a-pathway-to-decarbonize-the-steel-industry<\/a><\/p>\n [25]<\/a> https:\/\/worldsteel.org\/climate-action\/climate-change-and-the-production-of-iron-and-steel\/<\/a><\/p>\n [26]<\/a> https:\/\/www.acuitykp.com\/blog\/public-private-funding-green-steel-production\/<\/a><\/p>\n [27]<\/a> https:\/\/hadea.ec.europa.eu\/news\/european-clean-steel-discover-hadeas-projects-towards-climate-neutrality-and-circularity-2025-03-19_en<\/a><\/p>\n [28]<\/a> https:\/\/www.iea.org\/policies\/13515-green-innovation-fund-hydrogen<\/a><\/p>\n [29]<\/a> https:\/\/www.acuitykp.com\/blog\/public-private-funding-green-steel-production\/<\/a><\/p>\n [30]<\/a> https:\/\/www.transportenvironment.org\/articles\/green-steel-can-cut-climate-impact-of-car-production-for-just-eur57-a-vehicle<\/a><\/p>\n [31]<\/a> https:\/\/www.weforum.org\/stories\/2023\/08\/why-steel-can-be-an-unexpected-leader-in-decarbonization\/<\/a><\/p>\n [32]<\/a> https:\/\/www.iea.org\/reports\/iron-and-steel-technology-roadmap<\/a><\/p>\n","protected":false},"featured_media":124895,"template":"","tags":[],"acf":[],"yoast_head":"\n![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/11\/4567-Decarbonising-Steel-v1.0_001-scaled.jpg\")
<\/p>\nAre there targets for decarbonizing steel?<\/h2>\n
![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/11\/4567-Decarbonising-Steel-v1.0_002-scaled.jpg\")
<\/p>\nWhat are the main approaches to decarbonizing steel?<\/h2>\n
![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/11\/4567-Decarbonising-Steel-v1.0_005-scaled.jpg\")
<\/p>\n![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/11\/4567-Decarbonising-Steel-v1.0_003-scaled.jpg\")
<\/p>\n\n
\n
![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/11\/4567-Decarbonising-Steel-v1.0_004-scaled.jpg\")
<\/p>\nIs there a consensus for change?<\/h2>\n
![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/11\/4567-Decarbonising-Steel-v1.0_006-scaled.jpg\")
<\/p>\nFive fast facts on decarbonizing steel<\/h2>\n
\n
\nSteel manufacturing accounts for about 8% of total global carbon dioxide emissions – more than any other heavy industry.<\/li>\n
\nAccording to Deloitte, decarbonizing the steel industry will need investment levels of around US$ 800 billion by 2050.<\/li>\n
\nChina leads global steel production by a considerable margin, accounting for over 50% of global annual steel production, with more than 1.8 billion tons produced worldwide in 2024.<\/li>\n
\nProjects using green hydrogen to produce steel, such as those in the UAE and Sweden, have the potential to reduce CO\u2082 emissions from steelmaking by up to 95% compared to traditional methods.<\/li>\n
\nTransport & Environment estimates that switching to 40% green steel would add only \u20ac57 to the price of an electric vehicle in 2050.<\/li>\n<\/ol>\n