Under the new Industrial Deep Decarbonization Initiative (IDDI), the governments of the UK, India, Germany and Canada have announced a pledge to purchase low carbon-emission steel.

Green steel is already experiencing a rise in demand, with this announcement encouraging the market’s growth. 

The steel industry is critical to the global economy, but it is also one of the biggest producers of carbon dioxide. And so, decreasing the level of CO2 produced by the industry is vital if countries are to achieve the goal of net-zero emissions by 2050.

And green steel is thought to be the answer.

Here we look at what green steel actually is, the current production landscape and what the future holds for the industry.

What is green steel?

The properties of traditional steel are retained in green steel. It’s the way green steel is manufactured that makes it green. The usual production of steel involves heating iron ore with coking coal in a blast furnace; producing one tonne of steel emits about 1.85 tonnes of CO2.

But the manufacture of green steel looks to use renewable energy and green hydrogen as opposed to coking coal. This is set to make steel production at the supplier level CO2 free.

How is green steel manufactured?

Several methods are being developed and trialled to produce green steel. One of the leading processes involves replacing the coal used in production with green hydrogen. Rather than emitting CO2, the byproduct is water vapour.

Has green steel started to be produced?

The world’s first hydrogen-reduced sponge iron was produced in June 2021 at the HYBRIT pilot plant in Sweden. Rather than using coal and coke to remove the oxygen, fossil-free hydrogen was used. The green steel was delivered to Volvo who, in October, unveiled an autonomous electronic dumper truck as the first green steel vehicle to be made.

Stockholm-based H2 Green Steel is another fossil-free steel venture.  With a budget of approximately $3 billion US dollars (USD), they’re planning to build a zero-emissions steel factory in the north of Sweden. Expected to begin in 2024, the process will use hydrogen energy that was previously produced from Sweden’s Boden-Luleå region. H2 Green Steel anticipates that by 2030 their annual production of this high-quality zero-emission steel will be over five million tons. 

And it’s not just Sweden taking steps towards fossil-free steel. Andrew Forrest, chairman and co-founder of iron ore giant Fortescue Metals Group, has unveiled his plans to build Australia’s first green steel pilot plant.

The world’s biggest iron ore producer, Rio Tinto is developing a new technology to manufacture low-carbon steel. Rio Tinto is working with the University of Nottingham to develop the process, which involves the use of sustainable biomass instead of coking coal.

In Spain, steel and mining company ArcelorMittal SA plans to build a full-scale zero-carbon steel plant which will use green hydrogen. The company claims that 1.6 million tonnes of carbon-free steel a year will be produced by 2025.

Top steelmaker in China, China Baowu Steel Group, has announced its commitment to carbon neutrality by 2050.

What does this mean for the future of the steel industry?

The steel industry is vital in tackling the climate crisis. Just think of all the steel that’s involved in the solutions, such as wind turbines and electric cars. If anything, a green future includes more steel.

But the transition will neither be easy or cheap, with green hydrogen costing a lot more than fossil fuels or natural gas. Government support is critical for the industry’s green transformation. Both in terms of providing financial backing and ensuring a just transition, meaning jobs are protected in the move to a greener economy.

To sum up

A more sustainable future means a transition to green steel. Although innovations in technology are underway, it’ll be some time before this move is complete. How much time is very much dependent on regulatory support and policy.