The global steel industry is undergoing a transformative shift toward sustainability. With rising concerns over carbon emissions and environmental degradation, the demand for sustainable steel is increasing. This shift is driven by government regulations, corporate responsibility initiatives, and the growing preference for eco-friendly materials across various industries, including construction, automotive, and manufacturing.
According to BISResearch, the global sustainable (recycled and green) steel market was valued at $329.83 billion in 2023 and is projected to grow at a CAGR of 8.52%, reaching $820.14 billion by 2034.
The sustainable steel market encompasses processes and products that minimize environmental impact. Green steel production methods include hydrogen-based direct reduction, electric arc furnaces (EAF) powered by renewable energy, and recycling scrap steel. These approaches significantly reduce carbon emissions compared to traditional blast furnace methods that rely on coal and coke.
Building and Construction Segment to Dominate the Sustainable Steel Market
The building and construction sector is projected to be the largest market for sustainable steel from 2024 to 2034. This growth is fueled by the rising demand for eco-friendly steel in various construction applications, including structural components like steel beams, ductwork, and stairs, as well as aesthetic and functional elements such as handrails and railings. The shift toward sustainable building practices, along with the need for durable and recyclable materials, has significantly increased the adoption of sustainable steel. As more construction projects emphasize sustainability and resilience, this trend is expected to persist, further driving market expansion.
Sustainable Steel Market by Region
The Asia-Pacific region leads the global sustainable steel market and is expected to retain its dominance from 2024 to 2034. Home to major steel producers such as Baowu Steel Group, Nippon Steel, JFE Steel, Tata Steel, and POSCO, the region plays a pivotal role in global steel production. According to the World Steel Association, Asia-Pacific contributes over 50% of the world’s total steel output. Key sustainable steel manufacturers, including ArcelorMittal, Tata Steel, China Baowu Steel Group, POSCO, and Nippon Steel, have a strong presence in the region and are continuously expanding their production capacities to strengthen their market positions. For example, in October 2023, Tata Steel launched a new manufacturing facility in India dedicated to producing green steel using advanced recycling and low-carbon technologies.
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Recent Developments in the Sustainable Steel Market
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In May 2024, Gerdau S/A announced plans to build a new special steel mill in Mexico. The proposed facility, with a production capacity of up to 600,000 metric tonnes per year, is part of the company's strategy to expand its presence in the country. This decision is driven by a positive outlook for Mexico’s automotive industry and increased nearshoring activities.
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In April 2024, Nippon Steel Corporation, Nippon Steel Trading Corporation, and Siemens Gamesa Renewable Energy K.K. signed a memorandum of understanding (MoU) to jointly promote NSCarbolex Neutral, a green steel produced by Nippon Steel using a mass balance approach, for wind farm turbine towers in Japan.
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In January 2024, Vestas introduced ArcelorMittal’s low carbon-emissions steel offering for wind turbines. This collaboration delivers XCarb recycled and renewably produced heavy plate steel to the baltic power offshore wind farm in Poland.
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In September 2022, Hebei Iron & Steel (HBIS), a global leader in steel production, and Danieli & C. S.p.A., a world-renowned provider of equipment for the metals industry, signed a strategic partnership agreement for the development of new steel production technologies.
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In January 2022, Commercial Metals Company (CMC) announced plans to construct a new state-of-the-art micro mill to serve the Northeast, Mid-Atlantic, and Mid-Western U.S. markets. The new micro mill would be one of the most environmentally-friendly steelmaking operations globally, utilizing technology that significantly reduces energy consumption and greenhouse gas emissions compared to traditional methods.
Future Outlook
The sustainable steel market is poised for significant growth. Innovations in hydrogen-based production, increased government incentives, and greater consumer awareness will drive widespread adoption. By 2030, sustainable steel could account for a major share of global steel production, playing a crucial role in achieving carbon neutrality goals.
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Conclusion
The transition to sustainable steel is essential for a greener future. While challenges remain, the combination of regulatory support, technological advancements, and industry commitment will propel the market forward. As industries continue to prioritize sustainability, green steel will become a fundamental component of eco-friendly construction, transportation, and manufacturing sectors worldwide.
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