GREEN STEEL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

The global green steel market is estimated to be valued at USD 4.33 Bn in 2024 and is expected to reach USD 117.13 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 60.2% from 2024 to 2031.

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Green steel production is expected to grow significantly over the next decade driven by increasing environmental regulations and focus on reducing carbon emissions globally. Many countries have committed to achieve net zero emissions by 2050 which will require industries like steel to transition to greener production methods. Major steel companies are investing heavily in transitioning their existing plants and building new facilities that utilize low carbon technologies like hydrogen reduction or electrical arc furnaces powered by renewable energy. Governments around the world are also supporting green steel development through policy push and public funding to make green steel competitive against conventional steel production.

Climate Change Concerns

Rising environmental awareness and the imminent threat of climate change has put the spotlight on reducing carbon emissions across major industries. The iron and steel sector is under immense pressure to lower its carbon footprint and transition to greener practices given its role as one of the most polluting industries in the world. Steel manufacturing relies heavily on coal and is responsible for nearly 10% of direct carbon emissions globally. As governments and regulatory bodies implement stringent policies and regulations to achieve net-zero emission targets over the coming decades, steel producers are exploring new production methods and technologies to produce steel in an environmentally sustainable manner.

Green steel offerings, produced using low-carbon methods such as electric arc furnaces powered by renewable energy or hydrogen direct reduction processes, present an opportunity for steelmakers to reduce their carbon footprint substantially and align their operations with sustainability goals. While green steel production is currently more expensive than traditional methods, the costs are expected to decline significantly with greater investments in research and ramping up production capacities. Major steel consuming industries are also expressing a strong preference for low-carbon steel variants to lower the carbon footprint of their own products. With sustainability becoming a key differentiator, the market demand for green steel variants from the construction, automotive, and manufacturing sectors is expected to grow considerably over the long run.

Circular Economy Initiatives

Adopting circular economy principles across industries is being increasingly recognized as a crucial step towards achieving sustainability and net-zero emission targets. In the linear "take-make-dispose" model prevalent currently, vast amounts of resources are lost during the production process as steel scraps, slags, or other by-products. A transition towards a circular steel production cycle could help recover and reuse these resources more efficiently. Steelmakers are investing in innovative recycling technologies to establish closed loop recycling systems. Advancements like electric arc furnaces that can directly use steel scrap as a feedstock allow for lower carbon production while increasing the share of recycled content in new steel.

Sourcing scrap as a substitute for raw materials plays a key role in circular manufacturing. Nations and regional trade bodies are outlining plans to boost domestic scrap collection and redistribute scrap between geographic areas to ensure a steady supply of secondary raw material. Enhanced recycling also promotes the development of producer responsibility schemes that encourage designers and manufacturers to optimize products for disassembly and recoverability at the end of use phase.