Green steel

Traditional manufacture of Steel using iron ore and a Basic Oxygen Furnace / Blast furnace typically generates around 2.400 tonnes of Co2 for every metric tonne of steel produced. The steel industry accounts for approx 7% of annual global emissions, equating to approx. 2.9 billion tonnes of CO2 per annum. An Electric Arc furnace using scrap will produce around 0.600 tonnes of CO2 per tonne of steel produced. However, new technologies need to be found to bridge the gap in the shortfall of scrap availability globally. This means there has to be a way found to transorm iron ore into Direct Reduced Iron (Sponge Iron) in a green and sustainable manner. Companies such as H2 Green Steel will look to generate sponge iron which can be melted in an Electric Arc Furnace using green Hydrogen to take out the Oxygen in Iron Ore. Using Hydrogen means the chemical reaction creates Water (H2O). Also using renewable energy they are one of the front runners in this technology and this steel will be avalaible from early 2026, which puts them well ahead of other steel mills.

To manufacture steel using this technology will have an inherant cost over and above the traditional blast furnace method. However with the level of investment required by mills to make this transition, we have already seen legislation being announced such as CBAM (Carbon Border Adjustment Mechanism). This is designed to protect the investments made and create a level playing field for EU steel mills who will make this change ahead of their Far Eastern competition. So in one sense, there will be a cost to buy Green Steel, but we estimate this to be less than the tariff/ CO2 penalty for brown steel.