Decarbonizing Steel Production: the Roadmap to Green Steel

Transforming the steel industry may be the ultimate climate challenge. Explore how deeptech is shaping the future of steel.

Today, we're delving into the transformative world of steel production, a sector at the crossroads of innovation and sustainability. We're focusing on how deep tech startups are revolutionizing this industry to meet the rising demands for green steel.

Let’s start with a quote to size the importance of steel today:

“As countries around the world seek to build and expand cities and infrastructure, they all have one voracious appetite: steel.”

World Economic Forum

Steel is more than just a material; it's the backbone of modern civilization, shaping our buildings, vehicles, and industries. It's a barometer of development, with global steel production expected to reach 2.2 billion tonnes by 2026. Yet, this indispensable resource is also a significant environmental concern, contributing about 8% to global carbon emissions.

The challenge we face is clear: How can we ramp up steel production while minimizing its environmental impact?

The answer lies in green steel, a revolutionary approach that eliminates the use of fossil fuels in steel production. This shift is not just a necessity but a timely response to the escalating demand for sustainable practices in heavy industries.

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Quick Facts:

🟡 Why steel?

Steel is the foundation of our buildings, vehicles, and industries, with its production and consumption rates often seen as indicators of a nation's development.

To give you an idea of the demand side, by 2026, the global steel industry is projected to reach a production level of 2.2 billion tonnes.

Here are two projections of demand in millions of tonnes over time.

Dierk Raabe | The Materials Science behind Sustainable Metals and Alloys | Chem. Rev. (2023)

However, steel products, particularly in buildings, machinery, and vehicles, often have a very long lifespan.

So, over 75% of all steel ever produced is still in use.

This means that today only about 1/3 of production can come from recycling, but with a growing trend.

Therefore, “fresh” steel must be produced in large quantities for a rapidly growing global market.

However, the production of steel is also a significant contributor to global carbon emissions, accounting for approximately 8% of all greenhouse gas emissions.

🟡 Problem

Producing more steel while emitting the least amount of CO2 possible.

🟡 Solution

Green Steel: steel produced without the use of fossil fuels.

🟡 Why now?

In recent years, there has been growing interest in the development of green steel, which is produced using renewable energy and has a much lower carbon footprint than traditional steel.

Green steel is a key part of the transition to a more sustainable, low-carbon economy, and has the potential to significantly reduce carbon emissions from the steel industry.

Essentially, green steel is the manufacturing of steel without the use of fossil fuels.

Meanwhile, in the background, there is strong demand from corporate consumers who are willing to pay a premium for Green Steel, with a strongly growing market estimated to reach +6B by 2032 according to GlobalNewswire.

🟡 Deeptech startups into play:

Startups in this space are raising increasing sums from venture capital investors.

For example, Swedish startup H2 Green Steel has received billions in debt financing from major public and private banks.

Boston Metal, based in the United States, raised a Series C in January with ArcelorMittal among its investors, one of the world's largest steel producers.

🟡 Barriers and Future Scenarios:

Setting aside technological risks for a moment (after all, we're talking about Deep Tech), in the short to medium term, the innovations most likely to reach the market will leverage hydrogen as an alternative energy source.

Therefore, one of the biggest barriers to green steel production is the availability of low-carbon and low-cost hydrogen.

However, the production of green hydrogen is currently gaining momentum thanks to significant investments by governments and major energy producers, such as electricity companies.

The growing availability of green hydrogen could accelerate the production of green steel, ultimately leading to a more sustainable and low-carbon future for the steel industry.

Now let’s dive deeper into the problem-solution space, startups, and key dynamics.

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Context: Our Global Society is Built on Steel

The steel industry is a crucial component of the global economy as it provides raw materials for a wide range of products, from cars and buildings to appliances and packaging.

Today, it is the most widely used metal in the world and the most recycled material, with