Green Steel Market Size, Share & Segment By Product Type (Flat Steel Products, Long Steel Products, Tubular Steel Products), By Production Technology, By Application, By End-Use Industry And By Regions | Global Market Forecast 2024-2032

Green Steel Market Report Scope & Overview:

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The Green Steel Market Size was valued at USD 2.53 billion in 2023, and is expected to reach USD 141.67 billion by 2032, and grow at a CAGR of 56.48% over the forecast period 2024-2032.

Several key drivers and trends govern the growth and development of the Green Steel market. In a growing awareness of health and wellness, natural and organic flavors have gained consumer demand. One of the top trends now is towards natural, sustainably sourced products. More specifically, fragrances have had a high shift towards the use of environmentally friendly and organically sourced ingredients. Brands like Young Living and doTERRA are tapping into this trend, with their essential oil-based products and other natural fragrance options, while marketing to those who are environmentally conscientious. Another major driver is the interesting demand for an increase in innovative, exotic flavors in food items and beverages. Interest is soaring in experiencing new, more exotic tastes through food and drinks; this has been driven by the need from Gen Z for bolder and more innovative flavor offerings. Top restaurants are rapidly joining this trend by adding diversified sauces and flavor profiles to their menu—a bigger market trend in which restaurants are working hard to offer new, exciting culinary experiences.

Personalization and customization are also significantly impinging on the Green Steel market. Developments in technology have allowed companies to offer customized fragrance and flavor solutions that can be tailored to every individual's liking. Digital channels through which consumers can create their scent profile themselves are gaining popularity and enhancing customers' experience. Brands such as Scentbird and FragranceX already dominate in light of offering customized fragrance options as brands rapidly turn towards personalized consumer products. The other important driver in the market remains regulatory frameworks. Increasingly tight controls on the use of chemicals and ingredients in formulations have companies reformulating to observe safety and quality standards. For instance, the REACH regulation from the European Union has forced the reformulation of products to avoid restricted substances, furthering the impetus for innovation while continuing to ensure consumer safety throughout the sector.

Additionally, growth in emerging markets has also fueled the growth of the Green Steel market. As economies develop in regions like Asia-Pacific and Latin America, demand for premium and luxury products that come with unique flavors and fragrances increases. Improving economic conditions in these regions bring with them a rise in the middle class, which drives consumption. Companies like Symrise and International Green Steel participate in growth by preparing products for local tastes. On the other hand, technological developments—the encapsulation technique—are also raising the quality and stability of products, further supporting market growth.

Market Dynamics:

Drivers:

• Rising regulatory pressures, and carbon pricing mechanisms—both playing the role of incentivizing sustainable steel production.

The increasing regulatory pressures and carbon pricing mechanisms set a positive course for the green steel market. The governments and regulatory bodies of most countries have stringent environmental policies in place, setting a cap on the quantum of greenhouse gas emissions, having targeted the steel industry since it remains one of the greatest contributors to global carbon emissions. For example, the cap of the European Union's Emissions Trading System on the level of greenhouse gases that industries—steel production included—are able to emit guarantees a company must pay for allowances to cover its emissions and creates a financial incentive to reduce one's carbon footprint. Moreover, the European Green Deal aims for Europe to be the first climate-neutral continent by 2050, hence pushing steel producers toward green technologies such as hydrogen-based DRI production and EAFs powered by renewable energy. Similar initiatives are seen in regions elsewhere: Japan and South Korea invest heavily in hydrogen infrastructure in preparation of regulatory changes toward low-carbon steel. The Biden administration is also focused on green energy in the United States, looking at possible carbon border taxes that puts additional pressure on domestic and foreign steel mills to go green. Within these policy frameworks are penalties for high-emission steel production but also subsidies and incentives for firms investing in technologies related to green steel, which may further accelerate the transition toward more sustainable ways of producing steel. For example, companies like ArcelorMittal and SSAB have been involved in initiatives—the XCarb initiative and the HYBRIT project—where the output target is low- or zero-carbon steel. These are almost in line with the regulatory requirements. Such regulatory pressures, coupled with an emerging carbon pricing mechanism, will likely create an overwhelming economic rationale to adopt green steel technologies that accelerate innovation and investment in the sector.

• Growing consumer and corporate demand for green and sustainable materials.

Growing customer and corporate demand for green and sustainable materials are additional drivers for the Green Steel Market; hence, this is attributed to the growing scope of societal environmental obligation. This new awareness of world climate change and environmental degradation has put consumers fast shifting focus on sustainably sourced products with low environmental impacts. This trend is clear in industries like automotive, construction, and electronics, in which companies are under pressure to cut their carbon footprint and meet ESG standards. For instance, leading car manufacturers worldwide, including Volvo and BMW, have committed to using green steel as part of their much larger sustainability goals. That means Volvo, along with SSAB, will incorporate fossil-free steel in cars to mitigate CO2 emissions in the supply chain. On the same lines, construction firms are racing to find suppliers of green building materials to meet the booming green building industry—energy-efficient, lower-carbon structures. Another driver is corporate ESG commitments where many firms have ambitious goals to reach carbon neutrality. For example, companies like Apple and Google are working on green steel intended for their data centers and overall infrastructure. Here, too, demand is upped through investors and other stakeholders who reward companies with better ESG profiles, influencing corporate decisions on the sourcing of sustainable materials. This increasing demand is, therefore, being met by the investment of green steel technologies by steel producers, using methods like hydrogen-based reduction and renewable energy-powered electric arc furnaces. Sustainability has ceased to be a regulatory or ethical trend, but it has become a must-have market differentiator. Green steel, then, becomes an extremely compelling option for those companies willing to build brand value and satisfy expectations among consumers who are gradually becoming more eco-sensitive.

Restraints:

• High upfront capital costs required for deployment of the Green Steel technologies.

The high upfront capital costs required for deploying Green Steel technologies are a major restraint in the market. This will require massive investment in new infrastructure, equipment, and technology to transition to these green process routes: hydrogen-based direct reduction and electric arc furnaces powered by renewable energy from traditional routes of steel production. Investments in setting up facilities for hydrogen production and plants operating with renewable energy sources are incumbent, for instance. Massive investments in building plants for fossil-free steel production have been announced by companies like SSAB and H2 Green Steel. Both advanced technology and huge capital are required for their establishment and maintenance. High upfront costs may be a hindrance to many steel producers, especially smaller ones, thus limiting the fast adoption and further scaling potential of green steel solutions that hit the market.

Opportunities:

• Growing partnerships and collaborations across the value chain to create a strong ecosystem for sustainable steel production.

• Increased efforts in climate neutrality and industrial reduction of carbon emissions globally.

KEY MARKET SEGMENTS

By Product Type

Flat steel products dominated the green steel market in 2023 with a revenue share of 63%. The segment holds hot rolled coils, cold rolled coils, and coated steel products that find wide usage in industries such as automotive, construction, and appliances. The domination in flat steel products has been essentially founded on the wide application and high demand from these sectors that more and more pay attention to sustainability and reduction of carbon footprint. For example, in the automotive industry, manufacturers are using green steel due to its lightweight and better strength-to-weight ratio, which helps in fuel efficiency and reduces emissions in vehicles. Furthermore, the construction industry makes huge applications of flat steel products for structural purposes. Growing demand for green, eco-friendly building materials shifts interest towards green steel in this segment. Based on the market share, flat steel products are estimated to have a considerable share owing to their vast usage and trend towards green steel production processes. It is further supported by the fact that continuous innovation and investments in green technologies for the production of these products with low carbon emissions are prominent in this segment.

By Production Technology

In 2023, Electric Arc Furnace technology dominated the green steel market with a revenue share of 53%. The EAF process is preferred because it is flexible and has a relatively low carbon footprint compared to other methods. This technology increasingly finds application in green steel production because it can make use of scrap steel reutilization, which drastically reduces the total carbon footprint. The EAF process also allows for easier integration with renewable energy sources, such as wind or solar power, thereby improving its sustainability credentials. This dominance will be driven by the increasing adoption of the EAF technology by large steel producers seeking to meet their respective regulatory requirements and sustainability goals. For example, companies like ArcelorMittal and Nucor are ramping up their EAF production of greener steel products and riding on such benefits the technology gives in cutting down emissions and bringing improved energy efficiency. The fact that EAF technology can produce low-carbon steel while maintaining flexibility in raw material use makes it a preferred choice in the transition toward more sustainable steel production.

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By Application

In 2023, the Building & Construction segment led the green steel market with a share of 47%. This market is huge because of the huge volume of steel that goes into construction projects, including commercial buildings, residential structures, and infrastructure development. Moreover, increasing emphasis on sustainable and eco-friendly construction techniques has been noted; in such sectors, green steel enjoys an added advantage due to its lower carbon emission compared to traditional steel products. Moreover, such dominance is further enhanced by various demands of government legislation and building codes in enforcing or promoting the use of sustainable materials. For instance, the construction industry is shifting towards green steel to ensure it meets green building certification needs, such as LEED and BREEAM. For instance, large construction projects, such as the redevelopment of larger urban areas and infrastructure improvements, where green steel is utilized to improve sustainability and environmental performance linked to such projects. What this only goes to prove is that, at large, there is an emerging trend in the industry—possibly globally—to integrate more sustainable materials into construction practices to reduce the overall carbon footprint of building projects.

By End-use Industry

The Industrial sector dominated the green steel market and accounted for 45% of the Green Steel Market in 2023. This massive contribution is in response to the surge in demand for green steel in industrial uses, driven by the desire of the sector toward sustainable operations. For example, industries such as automotive and heavy machinery are fastly embracing green steel to achieve their sustainability goals through the launch of sustainable products. It dominates due to the extensive applications of the equipment, machinery, and industrial structures in its making. As industries increasingly turn attention to sustainability and lowering carbon footprint, green steel fast becomes a material of preference compared to ordinary steel, which has less potential to affect the environment. Green steel is increasingly applied by companies like Volvo and Caterpillar in their production process so that it can adhere to strict environmental regulations and consumer demand for greener products. This trend underlines the huge contribution of the industrial sector to the rise of green steel technologies.

Regional Analysis

In 2023, Europe dominated the Green Steel Market, with the largest market share of approximately 46%. Ambitious European climate policies and regulatory settings are propelling the green-steel-related sector. The European Union's Green Deal is trying to reach climate neutrality in the year 2050, while the ETS has forced the steel industry to drive change toward greener technologies rapidly. Several European countries are now taking the lead in green steel production. For example, SSAB of Sweden is currently working on the HYBRIT project, which will produce fossil-free steel using hydrogen technology jointly with LKAB and Vattenfall. Not to be left behind, Thyssenkrupp of Germany has focused on electric arc furnace technology in producing low-emission steels. Huge investments in renewable energy facilities and green steel technologies also support European market dominance. These factors all contribute to positioning Europe as the leading region in the green steel market, underlining its aggressive approach toward the achievement of environmentally sustainable development and compliance with regulations.

Moreover, in 2023, the Asia-Pacific is the fastest-growing region with a revenue share of 30% of the green steel market in 2023. This is attributed to heavy industrial expansion, increasing urbanization, and growing investments in sustainable technologies across several key countries in the region. China, the world's number one producer of steel, played a lead role in this growth. The green steel movement has found an open supporter in the Chinese government, inflamed by goals to achieve carbon neutrality by 2060. Large Chinese producers, such as Baowu Steel, have made investments in green technologies and re-changed their production lines to cut emissions and boost sustainability. Similarly, green steel is also expected to find greater adoption in India, driven by the burgeoning construction and infrastructure sectors rapidly turning green given the growing environmental regulations and demand for eco-friendly materials. The rapid growth in the Asia-Pacific green steel industry is further underpinned by rapidly growing investments in renewable energy and technologies that could cut carbon emissions associated with the production process of that metal. Strong industrial demand, supported by government policy and huge investment in green technologies, drives exponential growth in the green steel market of this region.

Recent Developments

• April 2024: A new version of the Green Steel Tracker, the key tool for tracking and progress on low-carbon primary steel production globally, has been published by the Leadership Group for Industry Transition. It was indicated that new project announcements were slowing in Europe, and new investments had spread to a wider geography.

• March 2024: According to the targets set by the NDRC, high-green and low-carbon quality buildings are supposed to be built from 2027, improving energy-saving and carbon emission reduction in the construction sector.

• February 2024: Salzgitter Flachstahl GmbH, a subsidiary of Salzgitter AG, signed a long-term Power Purchase Agreement with Octopus Energy's generation arm to back future green steel production.

• March 2023: Kobe Steel subsidiary Midrex Technologies, Inc. announced it would supply and build the MIDREX Flex reduction plant for ThyssenKrupp Steel Europe AG of Germany at its Duisburg site with a capacity to produce 2.5 million tons/year.

Key Players

Some of the major players in the Green Steel Market are ArcelorMittal, Baowu Steel Group, China Baowu Group, Emirates Steel Arkan Group, H2 Green Steel, Liberty Steel Group, Nippon Steel Corporation, Nucor Corporation, Outokumpu Oyj, POSCO, Salzgitter AG, SSAB AB, Swiss Steel Group, Tata Steel, Thyssenkrupp AG, Voestalpine AG, and others players.