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  • Published In : Jun 2024
  • Code : CMI7063
  • Pages :134
  • Formats :
      Excel and PDF
  • Industry : Advanced Materials

Market Size and Trends

The global green steel market is estimated to be valued at USD 4.33 Bn in 2024 and is expected to reach USD 117.13 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 60.2% from 2024 to 2031.

Green Steel Market Key Factors

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Green steel production is expected to grow significantly over the next decade driven by increasing environmental regulations and focus on reducing carbon emissions globally. Many countries have committed to achieve net zero emissions by 2050 which will require industries like steel to transition to greener production methods. Major steel companies are investing heavily in transitioning their existing plants and building new facilities that utilize low carbon technologies like hydrogen reduction or electrical arc furnaces powered by renewable energy. Governments around the world are also supporting green steel development through policy push and public funding to make green steel competitive against conventional steel production.

Climate Change Concerns

Rising environmental awareness and the imminent threat of climate change has put the spotlight on reducing carbon emissions across major industries. The iron and steel sector is under immense pressure to lower its carbon footprint and transition to greener practices given its role as one of the most polluting industries in the world. Steel manufacturing relies heavily on coal and is responsible for nearly 10% of direct carbon emissions globally. As governments and regulatory bodies implement stringent policies and regulations to achieve net-zero emission targets over the coming decades, steel producers are exploring new production methods and technologies to produce steel in an environmentally sustainable manner.

Green steel offerings, produced using low-carbon methods such as electric arc furnaces powered by renewable energy or hydrogen direct reduction processes, present an opportunity for steelmakers to reduce their carbon footprint substantially and align their operations with sustainability goals. While green steel production is currently more expensive than traditional methods, the costs are expected to decline significantly with greater investments in research and ramping up production capacities. Major steel consuming industries are also expressing a strong preference for low-carbon steel variants to lower the carbon footprint of their own products. With sustainability becoming a key differentiator, the market demand for green steel variants from the construction, automotive, and manufacturing sectors is expected to grow considerably over the long run.

Market Concentration and Competitive Landscape

Green Steel Market Concentration By Players

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Circular Economy Initiatives

Adopting circular economy principles across industries is being increasingly recognized as a crucial step towards achieving sustainability and net-zero emission targets. In the linear "take-make-dispose" model prevalent currently, vast amounts of resources are lost during the production process as steel scraps, slags, or other by-products. A transition towards a circular steel production cycle could help recover and reuse these resources more efficiently. Steelmakers are investing in innovative recycling technologies to establish closed loop recycling systems. Advancements like electric arc furnaces that can directly use steel scrap as a feedstock allow for lower carbon production while increasing the share of recycled content in new steel.

Sourcing scrap as a substitute for raw materials plays a key role in circular manufacturing. Nations and regional trade bodies are outlining plans to boost domestic scrap collection and redistribute scrap between geographic areas to ensure a steady supply of secondary raw material. Enhanced recycling also promotes the development of producer responsibility schemes that encourage designers and manufacturers to optimize products for disassembly and recoverability at the end of use phase.

Key Takeaways from Analyst:

The global green steel market is expected to grow significantly over the coming years. Driven by the rising environmental concerns and stringent CO2 emission norms worldwide, major steel producers are increasingly investing in developing green steel production technologies. Adopting hydrogen reduction instead of coke in the direct reduction of iron ore and installing carbon capture utilization and storage systems offer two major opportunities for steel mills to reduce their carbon footprint.

Huge capital investments are required for transitioning existing integrated steel plants to green technologies. High costs remain a major challenge for widespread adoption. Political will and policies supporting low carbon technologies will be crucial.

Government spending on research, carbon pricing mechanisms, and public-private partnerships can help address economic barriers. Steelmakers may gain competitive advantages by adopting green technologies ahead of regulations. Overall, the global green steel market is poised for strong growth driven by climate action though costs remain a hurdle to overcome.

Market Challenges: High capital investments requirements

High capital investments have certainly posed challenges for the growth of the global green steel market. Transitioning existing steel production methods to more sustainable processes requires massive upfront costs for new plants, equipment and infrastructure upgrades. Steel manufacturing is a traditionally capital-intensive industry to begin with, and going green adds another layer of expense.  Adopting carbon capture technologies, installing renewable energy sources, developing hydrogen-based steelmaking and overhauling energy systems are all tremendously costly endeavours that could run into the billions for major steel producers. The high prices associated with environmental innovations may deter some companies from making the switch right away due to concerns over damaging short-term profits and return on investment. High capital expenditure could slow the transition pace and restrict the early adoption of green steel technologies across regions. There is also the risk of deterring new players from entering the market altogether if the barrier to entry in terms of capital requirements becomes too high. This would negatively impact competition and limit the availability of green steel options over time. While governments provide subsidies and financing support in some jurisdictions, the huge costs remain a significant restraint globally without more coordinated policy interventions and economic incentives for low-carbon investments.

Market Opportunities: Scope for R&D in green production methods

Scope for R&D in green production methods could open up significant opportunities in the global green steel market going forward. As the world transitions towards more sustainable industries and innovation in green technologies progresses rapidly, investing in innovative R&D for cleaner steel manufacturing will put companies at the forefront of this global shift. Forward-thinking steel majors are already developing breakthrough technologies that could reduce carbon emissions and transform the industry's environmental impact. For instance, companies are researching production methods that utilize green hydrogen instead of coal in the direct reduction of iron ore process. Successful implementation of hydrogen-based steelmaking would allow the transformation of the sector into a renewable industry. However, perfecting cost-effective methods to produce steel while emitting minimal carbon remains a challenging scientific problem. Significant investments and cross-industry collaborations will be needed to bring more such early-stage technologies to commercial viability over the next decade. 

Green Steel Market By Process Type

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Insights, by Process Type: The Dominance of Electric Arc Furnace Technology

In terms of process type, Electric Arc Furnace (EAF) is expected to contribute 42.4% share of the global green steel market owing to its efficiency and versatility. EAF allows for the easier recycling of scrap metal into new steel outputs. With rising awareness around sustainability and closed-loop manufacturing, EAF is highly attractive to steelmakers seeking to lower their environmental impact.

By using mostly scrap steel as the raw material input, EAF generates far fewer carbon emissions than traditional integrated steel mills reliant on iron ore and coke. Steel scrap is in abundant global supply as the lifecycles of vehicles, appliances, and buildings end, making EAF preferable from both an economic and environmental standpoint. Furthermore, EAF is a flexible technology that can be more easily deployed near population centers on a modular basis. This decentralization improves transportation efficiency versus transporting raw materials over long distances.

EAF is also faster at melting scrap than traditional blast furnace techniques, with a full steelmaking cycle taking only a few hours. Its quicker process time means steel producers using EAF enjoy greater operational flexibility to adjust output based on changing market demands. The technology continues to improve through innovations like electric arc furnaces powered by renewable energy, further reducing the carbon footprint. Overall, EAF’s recycling emphasis, carbon efficiency, modularity, and flexibility have made it the preferred green steelmaking process and a dominant force shaping the industry.

Insights, by End-use Industry: The Central Role of the Automotive Industry

When analyzing the end-use industry segment of the global green steel market, the automotive sector is expected to claim 38.7% share in 2024,  due to sustained demand for lightweight yet strong steel grades. Meeting increasingly stringent vehicle emission regulations requires automakers to pursue mass reduction through advanced high-strength steels (AHSS) and other novel alloying techniques.

Steel remains the predominant material in automotive bodies-in-white owing to its unparalleled strength-to-weight ratio and affordability relative to aluminum or composites. Continuous improvements in steel strength and formability have allowed complexity to be added to vehicle structures while keeping overall weight low. This enables compliance with toughening fuel economy and tailpipe emission norms. With most major regions now targeting net-zero emissions by 2050 or earlier, the need for lighter cars will keep demand for specialized automotive-grade steels robust.

Additionally, the rise of electrified powertrains has created new applications for steel in batteries, motors and chassis designs optimized for these emerging technologies. As hybrids, plug-ins and EVs proliferate in the coming decades to replace internal combustion engines, the automotive industry's outsized influence on green steel consumption will persist through this technological transition. Its staying power as the keystone end-use segment makes the future of this market closely intertwined with innovative vehicle manufacturing worldwide.

Regional Insights

Green Steel Market Regional Insights

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The Europe has firmly established itself as the dominant region in the global green steel market. The region is expected to account for 39.1% share in 2024. The bloc has a robust steel manufacturing industry footprint across major countries like Germany, Italy, France, and Spain. Furthermore, the European Commission has taken a clear leadership role in promoting sustainable practices and has implemented strict regulations to reduce carbon emissions from heavy industries such as steel production.

This has prompted steelmakers in the EU to increasingly invest in green technologies and processes to lower their carbon footprint. Major players have set ambitious targets to become carbon neutral in the coming years. They have invested heavily in areas like electric arc furnaces, renewable energy integration, hydrogen use, and carbon capture utilization and storage. The EU government is also providing production-linked incentives and subsidies to support steel companies in their green transition.

Asia Pacific represents the fastest growing regional market for green steel. Countries like China, India, Indonesia and Vietnam have huge raw material reserves and a fast growing manufacturing sector, driving massive steel demand. However, traditional coal-based steel production methods have resulted in high pollution levels in major cities. This has forced governments in the region to support low-carbon alternatives and encourage imports of green steel to meet environmental regulations.

China, the world's largest steel manufacturer, has announced plans to become carbon neutral by 2060. It is now focusing on adopting European green technologies through production partnerships, joint research initiatives and engineering expertise exchanges. Other nations are also formulating long-term strategies and missions to transition existing mills and set up new greenfield projects based on low-carbon feedstocks and renewable energy. The ASEAN countries are especially leveraging their strategic locations along major global trade routes to attract foreign investments into building import-export hubs for green building materials like steel. Their supportive investment environments and availability of low-cost production resources is attracting global steel giants to establish local manufacturing presence.

Market Report Scope

Green Steel Market Report Coverage

Report Coverage Details
Base Year: 2023 Market Size in 2024: US$ 4.33 Bn
Historical Data for: 2019 To 2023 Forecast Period: 2024 To 2031
Forecast Period 2024 to 2031 CAGR: 60.2% 2031 Value Projection: US$ 117.13 Bn
Geographies covered:
  • North America: U.S. and Canada
  • Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
  • Europe: Germany, U.K., France, Italy, Russia, and Rest of Europe
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
  • Middle East & Africa: GCC Countries, South Africa, and Rest of Middle East & Africa
Segments covered:
  • By Process Type: Electric Arc Furnace (EAF), Basic Oxygen Furnace (BOF), and Direct Reduced Iron (DRI)
  • By End-Use Industry: Construction, Automotive, Machinery, and Others (Shipbuilding, Appliances, etc.) 
Companies covered:

Ansteel Group, ArcelorMittal, Boston Metal, China Baowu Group, Cleveland-Cliffs, H2 Green Steel, Nippon Steel Corporation, Nucor Corporation, Steel Dynamics, Inc., United States Steel Corporation, Jindal Stainless Limited, and Swiss Steel Group

Growth Drivers:
  • Climate Change Concerns
  • Circular Economy Initiatives
Restraints & Challenges:
  • High Capital Investments Requirements
  • Availability of Alternatives

Key Developments

  • In January 2024, Kalyani Steels planned the production of green steel at a newly acquired plant
  • JSW Steel is expected to launch a new blast furnace at Dolvi steel plant in 2026
  • In May 2024, Linde signed an agreement to supply industrial gases to world’s first large-scale green steel plant
  • In 2023, India’s Essar Group planned to invest billions of dollars in low-carbon projects in Saudi Arabia, the U.K., and India, as the company transitions into clean energy investments
  • In 2023, Vale and H2 Green Steel signed an agreement to study the development of green industrial hubs in Brazil and North America

*Definition: Green steel refers to steel production methods that aim to reduce the environmental impact and carbon emissions compared to traditional steel manufacturing processes.

Market Segmentation

  • Process Type Insights (Revenue, USD Bn, 2019 - 2031)
    • Electric Arc Furnace (EAF)
    • Basic Oxygen Furnace (BOF)
    • Direct Reduced Iron (DRI)
  •  End-use Industry Insights (Revenue, USD Bn, 2019 - 2031)
    • Construction
    • Automotive
    • Machinery
    • Others (Shipbuilding, Appliances, etc.)
  • Regional Insights (Revenue, USD Bn, 2019 - 2031)
    • North America
      • U.S.
      • Canada
    • Latin America
      • Brazil
      • Argentina
      • Mexico
      • Rest of Latin America
    • Europe
      • Germany
      • U.K.
      • Spain
      • France
      • Italy
      • Russia
      • Rest of Europe
    • Asia Pacific
      • China
      • India
      • Japan
      • Australia
      • South Korea
      • ASEAN
      • Rest of Asia Pacific
    • Middle East & Africa
      • GCC Countries
      • Israel
      • Rest of Middle East & Africa
  • Key Players Insights
    • Ansteel Group
    • ArcelorMittal
    • Boston Metal
    • China Baowu Group
    • Cleveland-Cliffs
    • H2 Green Steel
    • Nippon Steel Corporation
    • Nucor Corporation
    • Steel Dynamics, Inc.
    • United States Steel Corporation
    • Jindal Stainless Limited
    • Swiss Steel Group

Frequently Asked Questions

The CAGR of the global green steel market is projected to be 60.2% from 2024 to 2031.

Climate change concerns and circular economy initiatives are the major factors driving the growth of the global green steel market.

High capital investments requirements and availability of alternatives are the major factors hampering the growth of the global green steel market.

In terms of process type, Electric Arc Furnace (EAF) is estimated to dominate the market revenue share in 2024.

Ansteel Group , ArcelorMittal , Boston Metal , China Baowu Group , Cleveland-Cliffs , H2 Green Steel , Nippon Steel Corporation , Nucor Corporation , Steel Dynamics, Inc. , United States Steel Corporation , Jindal Stainless Limited, and Swiss Steel Group are the major players.

Europe is expected to lead the global green steel market.

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