Buying interest in green steel in Europe is limited by economic difficulties

Demand for green steel is limited by high premiums, the lack of government projects in Europe that would involve the purchase of these products, and the lack of incentives to encourage consumer switching. Fastmarkets reports this with reference to market sources.

In particular, according to one of the sources, the purchase of low-carbon steel is sometimes unattainable when many companies are struggling to survive in a tough market.

According to Fastmarkets, last week the number of buyers willing to pay extra for green steel in Europe remained limited due to the downturn in production, which depressed overall demand. However, premiums for these products (European rolled steel with a differential to the HRC index, EXW Northern Europe) remained stable at €100-200 per tonne, unchanged since the beginning of September.

At the same time, the EU Action Plan for the steel industry, published last week by the European Steel Association (EUROFER) and IndustriAll, calls for a coordinated approach to protect steel producers during the green transition.

According to the document, demand for low-carbon steel should be stimulated through public procurement and public auctions. At the same time, the industry and stakeholders should develop a universally recognized labeling system for such products to be used as a benchmark. In addition, it is proposed to introduce incentives for the use of green steel in key manufacturing sectors, such as automotive and construction.

The report also emphasizes that incentive packages at the level of member states and the EU should include the creation and promotion of key markets that will stimulate demand for clean steel produced in Europe.

The automotive industry could become the leading European market for low-carbon steel if legislators set the right requirements. This is stated in a study by the Trans-European organization Transport & Environment (T&E). Steel produced using green hydrogen and electric arc furnaces or scrap could reduce carbon emissions from car production in Europe by 6.9 million tons in 2030.