Green Steel Means Good Business: A Clear Win for Industry and Climate 

Article Takeaways 

• Definition and Importance: Green steel is produced through processes that drastically reduce or eliminate CO₂ emissions, addressing the steel sector’s significant environmental impact.  
   
• Key Production Methods: 
  • Hydrogen-Based Direct Reduction (H-DR): Converts iron ore to iron using hydrogen, emitting water vapor instead of CO₂.  
  • Electric Arc Furnaces (EAFs): Melt scrap steel using electricity; emissions vary depending on the energy source.  
  • Molten Oxide Electrolysis (MOE): Employs electricity to reduce iron ore, producing liquid iron and oxygen without direct CO₂ emissions.  
     
• Market Growth: The green steel market is projected to expand from USD 5.92 billion in 2025 to approximately USD 318.18 billion by 2034, driven by demand for sustainable manufacturing and technological advancements.  
   
• Key Challenges: 
  • Economic Viability: High production costs due to new technologies and renewable energy requirements.  
  • Infrastructure Needs: Significant investments are required in hydrogen production and renewable energy infrastructure.  
  • Regulatory Support: Government policies are crucial to facilitate the transition to green steel.  
     
• Industry Initiatives: Efforts such as China's expansion of its carbon trading market to include the steel industry aim to encourage low-carbon technologies and reduce emissions.  

Introduction to Green Steel 

Green steel refers to steel produced using processes that significantly reduce or eliminate CO₂ emissions compared to traditional methods. Conventional steel production relies heavily on coal or methane, especially for converting iron ore into pig iron, leading to substantial CO₂ emissions. In contrast, green steel production utilises alternative technologies and energy sources such as Green Hydrogen to mitigate these emissions, supporting global climate objectives.  

Steel production is still fundamental to industrial development, but is also one of the largest contributors to global carbon dioxide (CO₂) emissions, accounting for approximately 7–9% of anthropogenic emissions.  

The introduction of "green steel" offers a promising solution to mitigate this environmental impact by minimising emissions associated with steel manufacturing. This article examines the methodologies, market dynamics, challenges, and recent advancements in the field of green steel.  

If you're involved in the steelmaking industry and looking to reduce your carbon footprint, now is the time to consider how green hydrogen can fit into your decarbonisation roadmap. Stargate Hydrogen offers practical, scalable hydrogen solutions tailored for industrial use, including applications in green steel production.   

Whether you're exploring hydrogen-based direct reduction or integrating renewable energy into your electric arc furnaces, Stargate Hydrogen's technology can support your transition to cleaner operations. Check out our electrolyser’s page to learn more about how our products can help you meet both regulatory demands and market expectations for sustainable steel. 

Green Steel Production Methods 

Several innovative techniques have been developed to produce green steel: 

Hydrogen-Based Direct Reduction (H-DR): This method uses hydrogen as a reducing agent instead of coke or methane to convert iron ore into iron, emitting water vapour instead of CO₂. The process involves reducing solid iron ore with hydrogen, followed by melting the resulting iron in an electric arc furnace (EAF) powered by renewable energy. This approach has the potential to significantly reduce carbon emissions in steelmaking. In addition, H-DR method offers superior steel purity compared to conventional metods. 

Electric Arc Furnaces (EAFs): EAFs produce steel by melting scrap steel using electricity. While they emit less CO₂ than traditional blast furnaces, the overall emissions depend on the electricity'ssource. Utilising renewable energy sources can further reduce the carbon footprint of EAFs.  
 

Molten Oxide Electrolysis (MOE): Developed by companies like Boston Metal, MOE uses electricity to reduce iron ore in a high-temperature electrolytic cell, producing liquid iron and oxygen without direct CO₂ emissions. This process can be powered by renewable electricity, offering a carbon-free alternative to traditional steelmaking.  

Comparison Table: Green Steel vs Conventional Steel 

Market Trends and Projections 

The global green steel market is experiencing rapid growth. In 2025, the market size is estimated at USD 5.92 billion and is projected to reach approximately USD 318.18 billion by 2034, reflecting a compound annual growth rate (CAGR) of 55.70%.  

This growth is driven by increasing demand for sustainable manufacturing practices, stringent environmental regulations, and advancements in green steel production technologies.  

Recent Developments 

Policy Initiatives: China plans to expand its carbon trading market to include the steel, cement, and aluminium industries, requiring approximately 1,500 additional firms to purchase credits to cover their emissions. This expansion aims to encourage heavy industries to adopt low-carbon technologies and phase out obsolete, polluting facilities.  
 

Industry Investments: In Australia, a consortium named Green Iron SA aims to leverage the country's extensive magnetite resources and renewable energy to supply high-value green iron to Asian markets.  
 
The project involves mining magnetite, producing export-grade pellets, and constructing a direct reduced iron (DRI) plant at Port Pirie, potentially utilising hydrogen to reduce steelmaking emissions.  
 

Technological Innovations: Companies are developing novel electrochemical processes to decarbonise iron and steelmaking. The approach involves producing iron at lower temperatures using renewable energy, aiming to reduce emissions by 80% at half the cost of traditional methods.  

Challenges and Considerations 

Transitioning to green steel presents several challenges: 

Economic Viability: Producing green steel is currently more expensive than traditional methods, primarily due to high costs associated with modern technologies and renewable energy. For instance, some companies are reevaluating their plans to transition to fossil-free steelmaking due to higher-than-anticipated costs, despite substantial investments and subsidies.  
 

Infrastructure and Investment: Transitioning to green steel requires significant investments in new infrastructure, such as hydrogen production facilities and renewable energy sources. Coordinated efforts among governments, industries, and financial institutions are essential to overcome these investment hurdles.  
 

Regulatory Support: Government policies and regulatory frameworks play a crucial role in facilitating the shift to green steel. Initiatives like the European Union's Carbon Border Adjustment Mechanism (CBAM) are prompting steelmakers to accelerate decarbonisation efforts to remain competitive. 

Conclusion  

Green steel is no longer a theoretical concept—it is a necessary shift for the industry to align with global decarbonisation goals. For engineering firms, OEMs, and infrastructure developers, green steel represents both a challenge and an opportunity. Reducing carbon emissions from steelmaking can significantly lower the environmental footprint of end products and projects. 

Despite higher upfront costs, early adoption can offer a strategic advantage. Companies that invest now in green steel partnerships and pilot projects will be better positioned to meet future regulatory requirements, respond to ESG expectations, and win contracts that demand low-carbon materials. 

Importantly, the move towards green steel isn’t one that industries can make alone. It demands strong government support, clear policy signals, and large-scale investment in hydrogen infrastructure and renewable energy. The economic viability of green steel will improve as technologies mature, and with increasing pressure from carbon pricing mechanisms and supply chain requirements, the cost of inaction will only rise. 

As more nations tighten emissions standards and sustainability becomes a procurement priority, the question is no longer if green steel will replace conventional steel—but when and how quickly. For manufacturers and R&D leaders, preparing now means staying ahead of the curve, safeguarding supply chains, and contributing to a cleaner, more resilient industrial future.