The State of Green Steel

The steel industry is no longer talking about decarbonization in abstract terms. First steps have been taken. Lower CO₂-emissions steel has been produced at a commercial scale, and significant investment has been made.

Today, the issue is not one of intent, but rather of where progress continues and where it is starting to strain. In recent years, projects have moved out of concepts and pilots and into early operation, bringing real-life constraints into sharper focus.

The question of technology is still central but is no longer the only limiting factor. Access to clean energy, feedstock quality, policy certainty, and operational readiness are increasingly directing outcomes. Progress looks different depending on location and context, and the gap between intent and delivery is becoming easier to see.

Against that backdrop, the discussion below reflects an industry perspective on where steel decarbonization stands today.

worldsteel’s Rizwan Janjua discusses technology choices, decarbonization pathways, and the challenges facing the steel industry

The global steel industry has entered a decisive phase in its response to climate change. Commitments to reduce emissions are now widespread, but delivery is unfolding within a set of practical constraints that vary sharply by region. Energy access, raw material quality, policy frameworks, and workforce capability are shaping what is possible, and when.

Across the industry, progress toward lower-carbon steelmaking is no longer confined to early experimentation. Companies in all major producing regions are advancing projects through different technological routes, reflecting local conditions and legacy assets. At the same time, the scale of the challenge remains clear. No single solution can deliver deep decarbonization on its own, and existing production technologies, including the blast furnace, will continue to play a significant role for years to come.

As investment decisions accelerate, the balance between ambition and feasibility is becoming more defined. Reliable low-carbon energy, secure access to suitable iron units, consistent carbon accounting, and credible demand-side signals are emerging as critical enablers. Where these elements align, momentum builds. Where they do not, progress slows.

To explore how these forces are shaping the transition in practice, the discussion below draws on insights from Rizwan Janjua, Head of Technology at worldsteel, the largest steel industry association. His perspective reflects a global view of how steelmakers are approaching decarbonization today, where structural change is emerging, and what indicators will matter most in the years ahead.

Global picture

From your vantage point, what feels most significant about the industry’s current progress toward lower-carbon steelmaking? Are we seeing genuine structural change, or still early-stage experimentation?

What we can see is an industry that recognizes that it has a challenge to solve, but which is committed to continuing to reduce the carbon footprint from its operations and fully supports the aims of the Paris Agreement. Having just returned from worldsteel’s second Breakthrough Technology Conference, I am confident in saying that there are many steel companies and other organizations around the world that are making demonstrable progress in realizing their decarbonization commitments now.

Regional momentum

Which regions are converting ambition into tangible projects most effectively, and what common factors link their success?

All regions across the world can show that they are making progress. The common factors are government policy and incentives of various kinds, industrial collaboration up and down the value chain, access to low-carbon energy, and pressure from customers who are responding to the need to decarbonize for their own customers.

Technology mix

How do you see the balance evolving between DRI-based pathways, CCUS, and other emerging options? What does a realistic portfolio of technologies look like by 2030?

It is important to stress that there is no single solution to low-carbon steelmaking. A broad portfolio of new technology options will be required, deployed alone or in combination as local circumstances permit. We see three broad categories. Using carbon as a reductant while preventing the emission of fossil CO₂. Substituting carbon with hydrogen as a reductant. Using low-carbon electrical energy through electrolysis-based processes.

It is also important to stress that the blast furnace remains the predominant technology for reducing iron ore today and is expected to be a key component of the global steel industry for years to come. Innovations which can bring the CO₂ intensity of blast furnaces by 30–40 % through innovative combination practices such as top gas recycling, plasma injection, oxyfuel injection, hydrogen injection and biofuels etc. are at an advanced stage.

Energy geography

Reliable, affordable low-carbon energy has become a new competitive frontier. How is energy access reshaping where the next wave of steel investment will take place?

Most low-carbon steelmaking technologies depend, either directly or indirectly, on abundant and reliable supplies of low-carbon energy. In many cases this energy is converted into hydrogen, which acts as a reducing agent in novel technologies such as hydrogen-based DRI, and in some cases as a replacement for fossil fuels in existing processes. Ensuring a consistent and affordable supply is vital, and this may lead to steel production shifting toward regions where such energy can be secured more easily.

Feedstock quality

The shortage of DR-grade pellets is already influencing project timelines. How is this being viewed at an industry level, and what could help ease the constraint?

Raw material supply, including DR-grade pellets, is a critical issue for deploying new DRI projects. Addressing this requires not only increased pellet capacity, but also greater industry collaboration on long-term contracts, integrated supply chains, and technological innovation across production routes. Increased captive pelletizing and vertical integration, where steel producers integrate beneficiation and pellet production, may emerge as a strategy for securing supply.

Financing the transition

Are current carbon policies and market incentives doing enough to unlock large-scale private investment? What signals are still needed?

Strong demand-side signals and clear policy are essential for deploying low-emission technologies at scale. Supportive government and private-sector initiatives can accelerate demand and help bridge the gap between the availability of low-carbon steel and market readiness to absorb it. Much is being done, but more is needed. Demand-side policies such as tax incentives linked to carbon intensity, contracts for difference, and public procurement schemes are effective tools, as are commitments from steel buyers and long-term off-take agreements.

Partnership and ecosystem

Where are the most productive forms of partnership emerging, and what makes them work?

The most productive partnerships involve a combination of technology providers, energy companies, policy actors, and others. A useful example is the Stegra project in Sweden, where a diverse group of partners and investors have come together under conditions of medium- to long-term policy certainty. That stability allows complex projects to move forward.

Measuring progress

How close is the sector to a shared standard for carbon accounting that investors and customers can trust?

An increasing number of accounting methodologies exist for steel production and products. worldsteel maintains a database of these methodologies and their differences. Our CO₂ data collection program gathers site-level information from more than 200 facilities each year, allowing reporting on the CO₂ intensity of global steel production and common production routes. It has become an industry standard and the basis for international standards.

We continue to refine the methodology to reflect current expectations. This year it was expanded to include methane and nitrous oxide emissions, as well as a CO₂-equivalent intensity indicator. At the same time, a proliferation of standards can hinder effective decision-making. For this reason, we have been working with other organizations to develop the Steel Standards Principles, aimed at harmonizing greenhouse gas accounting globally.

People and skills

What new capabilities will the next generation of steelmakers and engineers need as the industry decarbonizes and digitalizes?

The transition is not only technological or economic. It will have profound implications for workforces and communities. There will be urgent demand for training, reskilling, workforce mobility, and systematic knowledge transfer across the value chain.

New reduction technologies require a range of skills which the steel industry needs to prepare for. Simultaneously, digitalisation doesn’t automatically mean less jobs, but new jobs that require retraining, upskilling or data sciences, instrumentation and programming. The steel industry needs to foresee these changes, adapt and develop robustness.

Outlook

Looking five years ahead, what would convince you that the global steel sector is firmly on the path to deep decarbonization?

If we see an increase in commercial hydrogen-based DRI or ultra-low-carbon EAF projects, stronger demand signals from automakers and the construction sector, and policies that penalize fossil-intensive steel, it would be reasonable to conclude that a tipping point for deep decarbonization has been reached.