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3 innovations in green steel

Startups and legacy companies across the globe are starting to decarbonize one of the most difficult and significant industries.

Red hot iron

Making steel is a fossil fuel intensive process, but there are ways to decarbonize on the horizon. 

Thomas Koch Blank, head of breakthrough technologies at RMI, says the green steel industry is at the beginning of an S curve. Almost 2 billion tons of steel are produced each year, and half of that is virgin material. Producing steel is responsible for about 7 to 9 percent of total global carbon emissions. So, it’s easy to understand why there’s a lot of investment pouring into creating sustainable steel technologies. 

According to Blank, the production of green steel is ramping up slowly compared to the number of resources coming in, a.k.a. the bottom of the S. 

Still, there has been a wave of recent developments. A Bill Gates-backed startup, Boston Metal, working to create a CO2-free steel process, raised $50 million in funding in January. In Sweden, $3.99 billion will help build a new commercial hydrogen steel plant. Swedish miner LKAB is investing $46 billion to achieve net-zero carbon emissions by 2045. But there’s still a long way to go before legacy steel manufacturers across the globe can decarbonize entirely, according to Blank.  

"When the Chinese steel industry starts moving, that’s when you get out of the fringes in my mind," he said. "They haven’t made any specific or any real investments yet."

Who’s making moves towards a greener steel economy? Here are three companies and approaches that hopefully will get us to the S curve’s inflection point. 

1. Kobe’s increased blast furnace efficiency 

Japanese steel manufacturer Kobe Steel recently developed a new technique for creating steel in natural gas blast furnaces that use less coke, a raw material with a high carbon content used in steel production. By adding hot briquetted iron (iron ore with the oxygen removed) to the blast furnaces as a fuel source at a precise ratio, Kobe said it has perfected a way to maintain the efficiency of the CO2 reduction process and use less coke as fuel. 

"It’s an optimization of the distribution of substances that go into the blast furnace," said Masahiro Motoyuki, executive officer of Kobe Steel.

According to Kobe, the process reduces CO2 emissions associated with production by about 20 percent. While this is not a final solution to the steel industry’s carbon emission woes, Kobe is positioning this as a transitional technology to help reduce emissions while it develops more drastic changes. But Blank sees this as a risky and expensive investment in something that might be obsolete in a few years if the steel industry is trying to get to net-zero emissions by 2050. 

"If you need to gradually get to zero emissions over 30 years, cutting your emissions by 20 percent buys 20 percent of the 30 years, so that gives you six years," he said. "That technology is only relevant for six years. They need more effective technologies installed very soon; otherwise, they’re not on track. But they’re actually reducing their carbon footprint, which is to their credit a lot more than most of the steel industry." 

It seems Kobe knows it has a timeline issue and is investing in other production technologies such as hydrogen in parallel with the efficient blast furnaces. Its U.S. subsidiary, Midrex Technologies, is working on natural gas blast furnaces that also can use hydrogen for a completely carbon-free process once there is enough hydrogen available for commercial steel use. 

2. EIT InnoEnergy’s hydrogen steel plant

Hydrogen offers one possibility of a completely carbon dioxide-free process for making steel, according to some experts. In traditional blast furnaces, coal is used to strip the oxygen out of the iron ore, creating steel and CO2. According to the Fuel Cell & Hydrogen Energy Association and  By using hydrogen instead of coal for that process, the byproduct is water (H2O) instead of CO2. 

A partnership between Netherlands-based EIT InnoEnergy, a sustainable innovations accelerator funded by the European Union, investor Vargas Holdings and Scania, a Swedish truck manufacturer, is working to bring this dream to a commercial reality. These partners are developing a fully scaled commercial hydrogen steel plant called H2 Green Steel. The plant will produce 5 million metric tons of green steel by 2024, making it the largest green steel plant in the world, according to the partners.  

Jacob Ruiter, CE0 Benelux at EIT InnoEnergy, said having a joint partnership and a buyer for the steel already on board before the venture started building the plant allowed it to avoid obstacles that previously have stifled the development of hydrogen steel plants. 

"In order for this to work, [steel manufacturers] have to change their mindset," he said. "Think in terms of value chain. So it’s not about the price of the hydrogen or the steel. It’s the price of the end product like the car. Will there be an increase in the price of the end product? What is the end customer willing to pay?"

InnoEnergy said it found using steel made sustainably only increased the price of a car by about $36, a negligible amount for the consumer. Instead of steel buyers such as car companies looking for the lowest steel prices and steel manufacturers competing to get their steel to the lowest possible price to win the market, it encouraged these stakeholders to join forces to create a green steel that is also affordable. 

We need three times the currently installed solar and wind energy sources to power the green energy steel industry.

According to Blank, the biggest obstacle to hydrogen steel production is the vast amounts of renewable energy needed to keep the process carbon-free. 

"If you want to take the current primary steel production and electrify it, you’ll need a terawatt of electrolyzers, which is a lot," he said. 

Basically, the three planned green steel plants in Sweden would need 50 percent of the current  power supply. According to Blank, globally, we will need closer to one terrawatt of electrolyzers powered by three terrawats of renewables. Three terrawats is about three times the total solar and wind power currently installed. 

   Blank also pointed to an anticipated explosion in electricity demand, spurred by world population growth over the next 30 years, as another challenge to overcome.

The H2 Green Steel plant will be built in Sweden’s Norrbotten region, which has access to vast amounts of reliable hydro and wind power. Blank said if hydrogen-based steel production is to expand beyond Sweden to other large steel manufacturing countries such as China and the United States, significant investment will need to occur in renewable energy. 

3. Boston Metal’s molten oxide electrolysis

A new technology originally created at MIT, molten oxide electrolysis, aims to separate the oxygen from the iron ore using electricity and creating O2 as the byproduct instead of CO2. Boston Metal is tasked with bringing this technology to a commercial level for the steel industry. 

Over the next two to three years, the company hopes to take its laboratory success and bring it to market. It’s focusing on regions such as Europe, Canada and Australia where there is easy access to renewable energy because like hydrogen steel, the electrolysis process requires access to large amounts of clean power to keep the process carbon-free all the way down the pipeline. 

Adam Rauwerdink, vice president of business development at Boston Metal, thinks electrolysis has one notable advantage over hydrogen — it is a direct way of removing iron ore in fewer steps.

"If you’re going to do hydrogen for steel production, you’re ultimately focused on [using] green hydrogen," he said. "Which is using electricity to do electrolysis of water to produce hydrogen. So there’s electrolysis involved. You’re just adding extra steps because then you’re taking that hydrogen, using that to make a sponge iron and then remelting that to a similar product that we’re producing. We think we are simplifying the process."

Each company and technology is taking aim at the 1 billion tons of virgin steel produced each year for buildings, factories, cars, planes and other infrastructure projects. And there isn’t one solution to rule them all, according to Blank. It will take many innovations and pathways to decarbonize this extremely carbon heavy industry. 

"I think there will be room in the market for all of them," Blank said. "It will take 1,000 million tons to transform the whole industry. You just need a lot of technology and a lot of new assets."

Correction: A previous version of this article stated that 50 percent of global power would is needed  to power the green steel sector. This has been corrected to 50 percent of power in Sweden is needed for Sweden's currently planned green steel facilities. 

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