Driving the sustainable steel transition
The steel industry stands at a crossroads. Amid turbulent forces – from shifting US tariffs to the nationalisation of British Steel – one trend remains clear: the transition to green steel. Matt Groch outlines the role of the automotive industry in driving change.
While global investment in clean steel has recently dipped to its lowest level in six years, BloombergNEF’s (BNEF) latest update of its Steel Decarbonization Project Database reveals that 42 green steel projects will be deployed in 2025, an improvement from 18 last year. By 2030 BNEF projects that 203 green steel schemes will be deployed, up from their previous projection of 165 in August last year. For steelmakers, today’s turbulence should not obscure the long-term opportunities that will emerge as the green steel transition accelerates. Failure to adapt risks losing access to key global markets and missing out on a path to long long-term profitability.
Automotive industry
Perhaps nowhere are these risks more evident than within the automotive industry. Automakers are racing to clean up their supply chains, resulting in increased demand for green steel. Since 2023, a coalition of environmental, human rights, and labour organisations organising as part of a campaign called Lead the Charge have published an annual leaderboard ranking the world’s largest automakers on their efforts to decarbonise their supply chains as they transition to electric vehicles (EVs). The trend is undeniable. In 2023, 61% of automakers achieved a score of 0% on their efforts to decarbonise their steel supply closed-loop processes for steel recycling. Mercedes, meanwhile, is the clear industry leader when it comes to establishing purchase agreements with steel suppliers to incentivise investment in and greater production of fossil fuel-free steel. The company discloses multiple agreements that the company has signed with suppliers in both Europe and North America, including a binding contract signed with H2 Green Steel (Stegra) for the supply of 50kt of steel produced at the company’s agreements for the supply of near-zero emissions steel and dropped to 28%, leaving automakers that have failed to take any steps in a dwindling minority…
