Global Green Steel Market - 2023-2030

Overview

Global Green Steel Market reached US$ 201.3 million in 2022 and is expected to reach US$ 140,435.7 million by 2030, growing with a CAGR of 126.7% during the forecast period 2023-2030.

Renewable energy sources, including solar, wind and hydropower, are used in green steel production to fuel its manufacturing procedures and lessen its carbon impact. As it directly contributes to the overall sustainability and environmental advantages of the steel production process, this transition towards cleaner energy sources is an essential component of the green steel movement.

As more individuals become environmentally aware and choose sustainable practices in their purchase decisions, consumer behavior is changing significantly. The demand for goods with a lesser environmental effect is being driven by this shift in consumer behavior. These environmentally sensitive consumers are ready to spend more for goods that adhere to their ideals and green steel, which is made using eco-friendly and low-carbon procedures, appeals to consumers.

Asia-Pacific dominates the green steel market covering over 70% share owing to the governments in the region striving to reduce carbon emissions that are produced by the steel sector. As an illustration, the Pradhan Mantri Urja Ganga Project was started by the Indian government in 2019 with the intention of providing CNG for cars, cooking gas, as well as businesses to satisfy their feedstock/fuel requirements in Eastern India. Additionally, steel is a key participant in the government's National Green Hydrogen Mission, which focuses on the production and use of hydrogen.

Dynamics

Growing Demand for Low-Carbon Steel from Various End-User Industries

The rise of the green steel market is being driven in large part by the rising demand for low-carbon steel from various end-user sectors. Green steel is defined as steel that is manufactured utilizing sustainable and ecologically friendly methods, frequently incorporating a decrease in resource usage and carbon emissions. The market for green steel has expanded due to the confluence of rising low-carbon steel demand and a growing focus on sustainability.

According to the World Steel Association, 1,860 MT (million tonnes) of steel were produced worldwide in 2020, releasing an average of 1.851 tonnes of CO2 into the environment per day. Organizations have had to develop strategies and collaborations with commercial steel-making companies to increase the production of green steel on a worldwide scale due to rising industrial emissions from steel products.

The growing use of recycled and low-carbon steel for manufacturing by businesses in the automotive industry, like General Motors, BMW, etc., is another significant change that has been noticed and will have an impact on the demand for green steel in the years future. For instance, the American steel giant Nucor Corporation stated in 2022 that it will introduce Econiq, a range of net-zero steel products for General Motors. BMW also disclosed the usage of green steel in its global vehicle manufacturing facilities.

Rising Steel Manufacturing In Steel Production Sectors

An increased understanding of environmentally friendly steel manufacturing in the steel production sectors is driving the market. The industry is being driven by market participants' increasing investments in greenfield projects, partnerships and strategic alliances to change their operations. The demand for green steel is being fueled by government subsidies and investments in its manufacturing.

For instance, to support the nation's ambitions for all sectors of energy transformation in 2021, the Government of India created the National Hydrogen Mission. In addition, automakers like BMW stated in October 2021 that they would utilize green steel in their vehicles (to be purchased from a Swedish steel company, H2 Green Group), to reduce greenhouse gas (GHG) emissions by up to 95% by 2025. Therefore, such government support might boost the market's demand for green steel.

Rising CO2 Emissions is Driving Market Expansion

CO2 emissions are rising. The steel and iron industry's overall carbon dioxide emissions have grown during the past ten years, mostly due to increases in steel consumption and the energy needed for manufacturing. To reach the Net Zero Scenario, significant CO2 emissions reductions are necessary. In the near term, carbon dioxide emissions may be decreased largely by improving energy efficiency and scrap collecting, which enables greater manufacture from scrap.

The use of green steel is anticipated to be crucial in helping countries all over the world achieve their long-term development objectives and reduce their carbon footprints. In order to reduce nations' dependency on energy imports, safeguard the environment and supply the world's expanding energy needs, green steel is crucial. In addition, a lot of CO2 is released during the manufacture of steel.

The adoption of novel technologies including electricity-based manufacturing, hydrogen utilization and CCUS will be necessary to achieve significant reductions in emissions intensity. Initiatives to promote green steel should help cut CO2 emissions. As a result, governments all over the world are boosting decarbonization plans and encouraging green steel, especially in sectors like the automobile and building industries.

Lack of Understanding of Carbon Accounting Calculations

Lack of understanding of carbon accounting calculations has been the main obstacle in the worldwide market for green steel since it is very difficult to predict the amounts of carbon tax during the production process. Consequently, the recognition of green steel is being delayed, even though just a small portion of Northern European enterprises will be making steel devoid of fossil fuels by 2022.

A few digital tools have been created by SMS organizations and other businesses. The quantity of CO2 emissions from all of a manufacturing unit's activities has proven to be challenging for businesses in recent years. The attraction of green steel is its less carbon impact. Steel makers may struggle to precisely monitor and verify emission reductions, nevertheless, without the right knowledge of carbon accounting systems. The credibility of their green promises is compromised by the lack of clarity.

High Production Cost of Green Steel

The expansion of the global green steel market may be restricted by the high cost of producing green steel. The production of green steel, which uses low-carbon and ecologically friendly techniques, frequently uses unconventional energy sources and cutting-edge technology. Although these technologies are better for the environment than conventional steel manufacturing techniques, they may result in higher production costs.

Specific raw materials that may be more expensive or less easily accessible than those used in typical steelmaking processes may be needed for some green steel processes. The expense of obtaining and shipping these commodities may drive up production expenses even further. Green steel manufacturing frequently uses renewable energy sources, which can be more expensive than traditional energy sources like coal.

Segment Analysis

The global green steel market is segmented based on type, energy resource, end-user and region.

Automotive is Growing for Green Steel Due to Sustainable Steel Usage

The automotive industry is seeing development in the green steel market as a consequence of rising environmental consciousness, stronger laws and the drive towards sustainable practices. Due to its significant steel consumption and move to more ecologically friendly automobiles, the automobile industry is a key factor in boosting demand for green steel, thus accounting for more than 2/3rd of the market.

For instance, as part of the industry-led SteelZero project, Volvo recently committed to utilizing only green steel in its production process by 2050. The business was also the first to design a vehicle utilizing only fossil-free steel, a prototype mining haul truck made from raw materials obtained from SSAB's ground-breaking HYBRIT steel initiative.

Additionally, Mercedes-Benz will also start buying steel from HYBRIT this year which is free of fossil fuels. The World Economic Forum's First Mover coalition, which was introduced at COP26, also includes Ford, which has committed to using 10% green steel by 2030. Volkswagen, Jaguar Land Rover, Toyota and General Motors are a few more automakers who have set a variety of objectives for lowering lifetime emissions from automobiles.

Geographical Penetration

Growing Government Initiatives of Green Steel in Asia-Pacific

Asia-Pacific has been a dominant force in the global green steel market and green steel manufacturing techniques are being researched and developed, such as using hydrogen instead of coal in the steelmaking process. Sustainable steel manufacturing is more feasible in countries like India, China and Japan because of research and innovation in these fields. Thus growing investment in research activities of these countries has made them contribute nearly ½ of the share in the regional market growth.

Growing government initiatives and the presence of large corporations are two elements influencing this segment's growth. To supply gas to all the adjacent steel companies, the Petroleum and Natural Gas Ministry, for instance, began the Pradhan Mantri Urja Ganga Project in 2019. The steel industry is responsible for around 15% of China's overall carbon emissions, compared to 14% for Japan and 12% for India. To speed the sector's transition to more environmentally friendly infrastructure, governments must enact well-designed legislation and regulations.

For Instance, A 13 million USD investment will establish a center for research and development of low-carbon raw materials. Rio also intends to work with the Japanese business Nippon Steel to develop complementary technology. The project aspires to be in line with Japanese climate targets by 2050, which includes a net-zero emissions target.

At the COP26 climate summit in November 2021, India, Japan and South Korea accelerated the development and uptake of clean technology and sustainable solutions in support of the Glasgow Breakthrough protocol to decarbonize steel. The countries also developed plans for their own country's industrial decarbonization.

The market is developing largely as a result of rising investments in the production of green steel and environmentally friendly construction materials. Increased investment in the creation of Green Steel is another factor driving the market. For instance, in January 2022, the South Korean steel producer Posco and the Indian Adani Group announced a USD 5 billion commitment to build a green, environmentally friendly integrated steel mill in Mundra, Gujarat, India.

COVID-19 Impact Analysis

The demand for green steel has been negatively impacted by COVID-19, especially in the power and energy industry. The pandemic has also had an impact on steel product import and export across all areas, which has led to a decrease in demand for green steel. In the COVID-19 era, there has been a roughly 12%-14% reduction in the demand for green steel.

COVID-19 has unflinchingly impacted all industries, which has had an impact on the mandate of several items on both the home and international markets. The majority of developing countries' current green steel demand circumstances show that steel consumption has decreased throughout the pandemic. Challenges have been addressed by several significant industries that produce green steel.

The majority of developing countries' current green steel demand circumstances show that steel consumption has decreased throughout the epidemic. Challenges have been addressed by several significant industries that produce green steel. Technical advancement and the transition to a greener economy have already accelerated under the post-pandemic situation. Technical advancement and the transition to a greener economy have already accelerated under the post-pandemic situation.

The steel industry is a major player in the market for green steel due to the fact that millions of tons of steel and other metals are required for the manufacturing of green steel. The market for steel goods across all areas has been influenced by the COVID-19 outbreak. To prevent building up stockpiles and falling steel product prices, which would lead to poorer revenue generation, steel mills in U.S. must modify their manufacturing activities.

Russia-Ukraine War Impact Analysis

The world's steel supply chain might be hampered by a war or conflict in an area like Russia or Ukraine that produces a lot of steel. Both nations are significant manufacturers and exporters of steel. Ukraine's rehabilitation is expected to cost more than US$400 billion or three times its GDP, according to the World Bank. External donors have invested US$59 billion into Ukraine to help it during the conflict since Russia invaded the country in February 2022.

A senior Ukrainian official said that Ukraine is seeking to collect up to US$40 billion to finance the first stage of a "Green Marshall Plan" to restructure its economy, which includes developing a steel sector free of coal. This announcement was made before an international gathering. The two-day gathering, which begins on Wednesday in London and is co-hosted by Ukraine and Britain, will feature discussions on short-term finance concerns as well as long-term rehabilitation initiatives.

Government officials are anticipated to debate behind closed doors whether and how to utilize frozen Russian assets to finance some of the rebuilding effort, as well as the establishment of a "war risk" insurance program to protect businesses that start investing in Ukraine once more.

By Type

• Electric Arc Furnace (EAF)
• Molten Oxide Electrolysis (MOE)

By Energy Source

• Hydrogen
• Coal Gasification
• Electricity

By End-User

• Construction
• Automotive
• Electronics
• Industrial Equipment
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico

• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe

• South America
  • Brazil
  • Argentina
  • Rest of South America

• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific

• Middle East and Africa

Key Developments

• On October 11, 2022, H2 Green Steel partnered with Midrex, an innovator in direct reduction ironmaking technology for the steel industry. Kobe Steel, the owner of Midrex, is strengthening the alliance by contributing to H2 Green Steel's Series B funding transaction.
• On January 27, 2023, ArcelorMittal has invested $36 million in Boston Metal. Through its Xcarb Innovation Fund, the purchase represents the Company's largest first investment to date. The fund, which was established in March 2021, aims to invest in the most innovative technologies that have the potential to make a significant contribution to the decarbonization of the steel industry, a process that ArcelorMittal aspires to lead.
• On January 27, 2022, Boston Metal's latest round of funding, totaling US$120 million, was spearheaded by ArcelorMittal. The business hopes to launch its products on the market by 2026 and eliminate the significant greenhouse gas emissions associated with the manufacture of steel.

Competitive Landscape

The major global players in the market include: H2 Green Steel, Tata Steel Ltd., ArcelorMittal, Voestalpine, Boston Metal, Nucor Corporation, SSAB, Nippon Steel Corporation, JFE Steel Corporation and Salzgitter AG.

Why Purchase the Report?

• To visualize the global green steel market segmentation based on type, energy resource, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of green steel market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global green steel market report would provide approximately 61 tables, 58 figures and 186 Pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies