Green Steel Market To Surpass USD 74,309.4 Mn by 2033

Updated · Jan 16, 2025

Market.us News, we strive to bring you the most accurate and up-to-date information by utilizing a variety of resources, including paid and free sources, primary research, and phone interviews. Learn more.

Table of Contents

Introduction
Key Takeaways
Emerging Trends
Use Cases
Major Challenges
Market Growth Opportunities
Recent Developments
Conclusion

Introduction

New York, NY – January 16, 2025 – The Green Steel Market is rapidly expanding and is poised to significantly transform the steel industry’s landscape over the next decade. As of 2023, the market stands at a modest USD 337.6 million, but it is forecasted to surge to an impressive USD 74,309.4 million by 2033, growing at a compound annual growth rate (CAGR) of 71.5%.

This explosive growth is driven by increasing demand for environmentally friendly and sustainable manufacturing processes. Green steel, which refers to steel produced using renewable energy and less carbon-intensive practices, is gaining popularity as industries and consumers alike seek more sustainable alternatives.

Stringent global environmental regulations, technological advancements in green steel production, and growing awareness of carbon footprints are fueling the market’s expansion. As a result, numerous opportunities are emerging for investors and companies to innovate and expand in this sector, making it a lucrative and popular market with vast potential for growth and impact.

Key Takeaways

The global green steel market generated a revenue of USD 337.6 million, with a CAGR of 71.5%, and is expected to reach USD 74,309.4 million by the year 2033.
The production technology held a major share of the market, with renewable-electric arc furnaces (R-EAF): taking the lead in 2023 with a market share of 54.3%.
By energy source, the solar accounted for a significant share of 44.5%.
By end-use, the building & construction segment among the other sub-segments held a significant revenue share of the market with 38.5% of the global green steel market.
Asia Pacific led the market by securing a market share of 43.4% in 2023.

Emerging Trends

Electrification and Automotive Integration: The automotive industry’s pivot towards electric vehicles is intensifying demand for green steel. As the sector transitions from internal combustion engines to electrified powertrains, green steel is increasingly used in batteries, motors, and optimized chassis designs for these new technologies.
Technological Advancements in Production: Green steel production is being revolutionized by technologies such as hydrogen-based direct reduction (H-DR) and molten oxide electrolysis (MOE). These technologies are key in reducing carbon emissions, with MOE providing a unique advantage by generating oxygen for potential extraterrestrial exploration, alongside its applications in steel making.
Hydrogen as a Primary Energy Source: Companies are increasingly constructing facilities that utilize hydrogen as a primary energy source for steel production. This not only supports the production of fossil-free steel but also significantly cuts greenhouse gas emissions, aligning with global decarbonization goals.
Regulatory Push and Certification: There’s a growing need for steel producers to obtain low-carbon and carbon-neutral certifications. These are not just for compliance with stringent regulations but also to meet the market demand for sustainable and environmentally friendly products. Certification plays a crucial role in market differentiation and helps in building consumer trust.
Investments and Regional Growth: Europe is currently leading with robust investments in green steel plants, backed by government support and incentives. This is coupled with the Asia-Pacific region, which is rapidly catching up due to its high raw material reserves and increasing governmental support for sustainable practices

Use Cases

Automotive Industry: Green steel is crucial in manufacturing more sustainable vehicles. It’s used in components like drive shafts and for improving crash management systems. By integrating green steel, the automotive sector can significantly reduce the environmental impact of its products while maintaining high performance and safety standards.
Construction and Infrastructure: The construction industry benefits from green steel due to its lower carbon footprint. It’s used in building frameworks, beams, and other structural components. This not only supports sustainable building practices but also complies with increasingly stringent environmental regulations.
Energy Sector: In energy infrastructure, particularly in projects like wind turbines and solar panel frameworks, green steel is valued for its durability and reduced environmental impact. Its use helps decrease the overall carbon emissions associated with the production of renewable energy infrastructure.
Manufacturing of Industrial Machinery: For machinery that must endure high stress and wear, green steel provides the necessary durability and strength. It is especially useful in high-load applications, where its superior strength and good formability are essential for efficient manufacturing processes.
Medical Technology: In the medical field, green steel is used for manufacturing surgical instruments and other medical devices. Its use ensures that the environmental footprint of these essential tools is minimized, aligning with the healthcare industry’s goals for sustainability.

Major Challenges

High Production Costs: Transitioning from traditional steel production to green steel methods, such as using hydrogen-based steelmaking, involves significant initial investments and operating costs that are generally higher than conventional methods.
Technological Limitations: Technologies like carbon capture and storage (CCS) and green hydrogen are essential for green steel but are still in developmental stages. Scaling these technologies to meet industrial needs is a significant challenge.
Supply Chain and Raw Materials: Securing a consistent and affordable supply of sustainable raw materials, such as green hydrogen and scrap steel, is currently a challenge. The steel industry needs to establish strong partnerships with raw material suppliers to secure the necessary inputs for green steel production.
Regulatory and Market Uncertainty: The lack of standardized definitions and regulations for what qualifies as ‘green steel’ complicates market acceptance and can deter investment. Furthermore, market demand for green steel is still developing, which can make it difficult for producers to commit to full-scale production without clear demand signals.
Energy Requirements: The substantial energy demands for green steel production, particularly for hydrogen-based methods, require access to abundant renewable energy sources, which may not be consistently available in all regions.

Market Growth Opportunities

Automotive Sector Demand: The automotive industry is rapidly transitioning towards electric vehicles (EVs), which require sustainable manufacturing practices, including the use of green steel. This sector’s move towards greener alternatives is driving significant demand for green steel.
Construction and Infrastructure Development: Rapid urbanization and increasing global investment in infrastructure are expected to drive the demand for green steel, especially in the construction sector. This is particularly notable in regions with active government initiatives promoting green buildings.
Regulatory Support and Subsidies: In Europe, stringent regulations aimed at reducing carbon emissions are compelling steelmakers to invest in green technologies. The European Commission’s leadership in setting ambitious climate targets and providing subsidies is encouraging the adoption of green steel technologies.
Technological Innovations: The development and implementation of new technologies such as Electric Arc Furnaces (EAF) and Molten Oxide Electrolysis (MOE) are key opportunities for the growth of the green steel market. These technologies help in reducing CO2 emissions and enhancing the sustainability of steel production.
Global Expansion in Emerging Markets: Asia-Pacific, including major economies like China and India, shows significant growth potential due to increasing industrial activities and the need to meet environmental regulations. Moreover, the Middle East and Africa are emerging as promising markets due to diversifying economies and infrastructure developments.

Recent Developments

ArcelorMittal, In January 2024, ArcelorMittal raised €1.5 billion through a sustainability-linked bond issuance to support its decarbonization efforts. The company invested $299 million in R&D activities in 2023, with a focus on decarbonization and environmental technologies.
ArcelorMittal’s XCarb, Innovation Fund has built a portfolio of breakthrough technologies aimed at carbon-neutral steelmaking, including investments in companies like Boston Metal. The company sold 229,000 tonnes of XCarb low-carbon steel products in 2023. However, in November 2024, ArcelorMittal announced delays in final investment decisions for several green steel projects in Europe due to unfavorable policy and market conditions.
Baowu Steel Group, In 2023, China Baowu established the world’s first 400m3 industrial-grade low-carbon metallurgical test platform, the Hydrogen-Rich Carbon Recycling Oxygen Furnace (HyCROF). The HyCROF technology achieved a 30% decrease in fossil fuel consumption and demonstrated a carbon reduction capability of over 23%. In September 2023, Baowu extended the HyCROF technology to a 2500m3 blast furnace, initially achieving a 27% reduction in fossil fuel consumption, a 19% increase in output, and a 16% reduction in carbon emissions.
Emirates Steel Arkan (now EMSTEEL), In September 2024, Emirates Steel Arkan rebranded as EMSTEEL as part of a strategy to accelerate operational transformation and extend its global presence. The company is investing in cutting-edge technologies and practices, including the use of clean energy in operations, to prioritize safety, quality, and efficiency while making low-carbon products the cornerstone of the business. EMSTEEL is committed to reducing carbon emissions in alignment with the UAE’s Net Zero by 2050 Strategic Initiative, with 80% of its operations currently using clean energy.
H2 Green Steel, In January 2024, H2 Green Steel secured €4.2 billion in debt financing and raised an additional €300 million in equity funding for its green steel plant project in Northern Sweden. The company also received a €250 million grant from the EU Innovation Fund. H2 Green Steel’s project aims to produce steel with up to 95% lower CO2 emissions compared to traditional steel production methods. The company plans to start operations at its green steel plant in Boden, Sweden, by the end of 2025.

Conclusion

The Green Steel Market, poised for significant growth, represents a transformative shift in the steel industry, driven by the imperative to reduce carbon emissions and foster sustainable manufacturing practices. As companies increasingly prioritize eco-friendly production methods, the demand for green steel is expected to rise sharply.

This growth is further bolstered by governmental policies and regulations promoting low-carbon technologies, which not only help in achieving environmental targets but also offer economic incentives for early adopters. Despite potential challenges such as high initial costs and technological complexities, the future of the green steel market looks promising. It offers a critical pathway towards achieving global sustainability goals while providing a competitive edge to forward-thinking companies in the steel sector.