The steel industry is concerned about the slow progress of green steel projects

Initiatives are being held up due to a lack of funding and weak demand for cleaner steel products

The steel industry is concerned about the slow progress being made in the field of ‘green’ steel. This was discussed at the annual meeting of steel associations in Singapore, according to Reuters.

According to Worldsteel, around half of the world’s planned ‘green’ steel projects have already been postponed. At the same time, governments have allocated just $20 billion of the $1.5 trillion needed to decarbonise the sector.

Industry leaders have stated that progress in reducing emissions is likely to remain slow without a significant increase in public funding or customers willing to pay more for sustainable steel.

As Shao-liang Zhong, Deputy Secretary-General of Worldsteel, noted, the current global project portfolio will only deliver around 70 million tonnes of ‘green’ steel per year by the end of the decade, which is just a fraction of the approximately 2 billion tonnes of total projected production. Around half of these projects are being held up due to financial constraints, weak demand or a shortage of ‘green’ hydrogen, he explained to the agency.

According to him, over the last decade, the emissions intensity of steel (per tonne produced) has remained virtually unchanged, despite steelmakers’ commitments to reduce them.

Traders and steel producers, for their part, note that many customers are still unwilling to pay a premium for cleaner steel.

Meanwhile, investment in traditional blast furnaces continues in India and South-East Asia, with many of these facilities having a service life of up to 40 years.

It is worth recalling that, as noted in a study by Fastmarkets experts, the production costs of ‘green’ steel in the EU call its competitiveness into question. MENA producers have a cost advantage in both the hydrogen-based and gas-based DRI production routes.