Opinion | Steel industry creates new identity as a defender of sustainable development

Among the technologies driving this change in the steel industry, one of the most promising is hydrogen-based productionSeveral leading steel companies are pioneering the use of hydrogen as a reducing agent instead of coal.

Sweden’s SSAB, LKAB and Vattenfall have developed HYBRIT technology (Hydrogen-Based Iron Production Technology) and aim to produce fossil-free steel by 2026. The process replaces coking coal with hydrogen produced from renewable electricity, potentially reducing Sweden’s carbon dioxide emissions by 10 percent.

Austrian steel giant Voestalpine, another pioneer in the use of hydrogen, is operating one of the world’s largest pilot plants for producing hydrogen from renewable electricity. By using more green hydrogenintends to reduce CO2 emissions from steel production by more than 80 percent by 2050.

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ArcelorMittal, the world’s largest steel producer, is investing heavily in carbon capture and storage technologies. Her project in Ghent, Belgium, aims to capture carbon dioxide emissions from a blast furnace and turn them into ethanol.

Many manufacturers, such as Nucor Corporation, the largest steel producer in North America, are also moving to electric arc furnaces (EAF), which can use up to 100 percent of scrap, unlike traditional blast furnaces.

By introducing electric arc furnaces and using 77 percent recycled feedstock in steel production, Nucor has reduced its carbon footprint to just one-third of the global steel industry average, setting a new standard for environmentally friendly steel production.

Tata Steel, one of India’s largest manufacturers, has launched plans to produce green steel and carbon-neutral steel across Europe by 2050 and has set ambitious carbon reduction targets. In India, the company aims to reduce CO2 emissions to less than 2 tonnes per tonne of crude steel by 2025, well below the global average.

While global steel demand is forecast to grow by 30 percent by 2050, decarbonizing production requires significant investment – estimated at $4.4 trillion over three decades. This could increase production costs by 30 percent by mid-century, underscoring the need for innovative solutions and supporting policies so that steel producers can remain competitive in a low-carbon future.

Steel products at a market in Jinan, China, on Wednesday, May 8. Photo: Bloomberg — Steel products at a market in Jinan, China, Wednesday, May 8. Photo: Bloomberg

Governments around the world are recognising the importance of supporting the green transformation of the steel industry. European Union Green Deal Industrial Plan includes significant funding for decarbonization projects in heavy industry, including steel. In the United States Inflation Reduction Act provides tax breaks for clean hydrogen production, which could accelerate the deployment of hydrogen-based steelmaking technologies.

Industry collaboration is key, with initiatives like ResponsibleSteel, a global multi-stakeholder standard and certification program, promoting sustainability throughout the steel supply chain. ResponsibleSteel members, including ArcelorMittal, BlueScope, Tata Steel and Posco, work to address environmental and social issues in steel production.

A successful green transformation of the steel industry could be a turning point in the global fight against climate change. If one of the world’s most carbon-intensive industries can radically reduce its emissions, it sends a powerful message that no sector is beyond transformation. It would be a testament to the power of innovation and commitment to sustainability. It’s not just about cutting emissions; it’s about reimagining entire industries for a sustainable future.

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The progress made by companies like ArcelorMittal, Tata Steel and SSAB show that a greener future for steelmaking is not only possible, but achievable. Their efforts are paving the way for other high-carbon industries to follow suit, showing that even the most traditional sectors can adapt and thrive in a low-carbon economy. It demonstrates the importance of long-term vision, the power of cross-sector collaboration and the potential of technological innovation to solve seemingly intractable problems.

The journey to truly sustainable steel production is far from over. The industry must continue to innovate, invest in new technologies and collaborate across borders and sectors. Investors must recognize the long-term value of green steel and direct capital toward companies that lead in sustainability. Consumers can also play a key role by demanding lower-carbon steel products.

As the world stands at a crossroads of industrial heritage and environmental imperatives, the choices made now will shape the future not only of the steel industry but of the planet. The steel sector is proving that it is possible to create a future in which industrial efficiency and environmental care are not mutually exclusive, but mutually reinforcing.

The steel industry, once a byword for industrial pollution, is leading the way to a cleaner, greener future. It’s time for other industries to follow suit. Our future depends on this crucial transformation.

Professor Syed Munir Khasru is the chairman of the international think tank IPAG Asia-Pacific in Australia, which also has branches in Dhaka, Delhi, Dubai, Vienna and Mauritius