Growth in the sustainable steel market is being driven by stringent regulations, carbon neutrality targets, energy and cost efficiency owing to the use of recycled steel, and a significant increase in steel demand with the scarcity of raw materials and energy. Sustainable steel is steel manufactured by using clean technologies to reduce CO2 emissions and waste. The steel industry is amongst the top carbon-emitting sectors and is considered highly energy intensive. Various countries have imposed regulations on greenhouse gas (GHG) emissions for environmental safety. The sustainable steel market is striving toward a green future with the decarbonization of processes across the value chain.
Read Report Overview: Sustainable Steel Market
The companies in the steel industry have been implementing various solutions in order to reduce carbon emissions and energy consumption. Apart from these driving factors, some restraining factors are impacting the growth of the market, such as impurities in recycled steel due to incomplete separation and complex product design and the high cost of production for green steel amid high infrastructure costs and green hydrogen prices curb the green steel developments. Catering to the growing demand for sustainable steel, many research and development (R&D) activities are going on to lower the production cost and development of new purification technologies.
The global sustainable steel market is projected to reach $795.8 billion by 2031 from $327.3 billion in 2021, growing at a CAGR of 8.97% during the forecast period 2022-2031. The growth in the global sustainable steel market is expected to be driven by stringent government regulations, carbon neutrality targets, energy and cost efficiency owing to the use of recycled steel, and a significant increase in steel demand with the scarcity of raw materials and energy. However, impurities in recycled steel due to incomplete separation and complex product design and the high cost of production for green steel amid high infrastructure costs and green hydrogen prices are some key restraining factors for the market.
Building and Construction to Dominate the Sustainable Steel Market (by End-Use Application)
Among different sustainable steel end-use applications, building and construction is expected to be the largest application during the forecast period 2022-2031. The growing demand for sustainable steel, primarily for various components, including steel beams, ductwork, stairs, handrails, lighting fixtures, roofing, and railing, among others, has propelled the demand in this end-use industry
Electric Arc Furnace to Dominate the Sustainable Steel Market (by Technology)
The electric arc furnace is one of the advanced technologies for sustainable steel production, and it is a key technique used in the large-scale commercial production of sustainable steel. There is a technological shift toward the electric arc furnace technology from the conventional blast furnace-basic oxygen furnace technology, owing to the increased share of scrap-based electric arc furnace (EAF) and new green hydrogen-based direct reduced iron-electric arc furnace (DRI-EAF) technology.
China to Dominate the Sustainable Steel Market (by Region)
China occupied the largest market share in 2021, and the region is expected to lead the market by 2031 as well. China is major producer and consumer of the crude steel and also lead the sustainable steel market. Europe is second largest region and major sustainable steel manufacturers, such as ArcelorMittal, Celsa Group, LIBERTY Steel Group, Tata Steel, and Hybrit, are increasing sustainable steel production in the region to cater to the rising demand from various end-use industries. Stringent environmental regulations and targets for a net zero carbon economy by 2050 are also major factors behind the growth of the sustainable steel market in the region.
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Recent Developments in the Sustainable Steel Market
- In October 2022, Tata Steel signed a memorandum of understanding (MoU) with an American multinational automobile manufacturer, Ford, in Europe. Under this agreement, Tata Steel Nederland will supply the carmaker with Zeremis green steel once the IJmuiden steelworks start operating with green hydrogen-based steelmaking. Tata Steel has recently launched a new steel product, Zeremis Carbon Lite, with reduced carbon emissions of up to 100%. Ford has aimed to reach its carbon neutrality target by 2035, and this partnership will secure the future supply of environmentally friendly produced steel.
- In September 2022, NIPPON STEEL CORPORATION announced that it would launch a steel product that is certified and reduces carbon emissions under the brand name NSCarbolex Neutral. The company has a new initiative against climate change, i.e., the Carbon Neutral Vision 2050, and its new product will be featured in the market by the first half of the fiscal year 2023.
- In August 2022, HBIS GROUP signed an agreement with a German multinational manufacturer of performance luxury vehicles and motorcycles, BMW Group, to jointly manufacture green low carbon steel. The company will supply CO2-reduced steel to BMW Group’s plants located in Shenyang from 2023.
- In July 2022, LIBERTY Steel Group announced its plans to invest more than $350 million in two hybrid electric arc furnaces at Ostrava steelworks. These new furnaces will have a capacity of 3.5 million tons per year and will reduce the overall carbon emissions of the Ostrava steelworks by more than 80% by 2027. LIBERTY Ostrava, a subsidiary of LIBERTY Steel Group, signed an agreement with a leading global manufacturer of plant and machinery, Danieli, for the delivery of two state-of-the-art hybrid electric arc furnaces.