The demand for low-emission steels, particularly from the automotive industry, has witnessed a significant upswing. In the past, demand for these steels was primarily driven by exploratory motives, with consumers testing new suppliers and materials without being willing to pay a premium.
However, the landscape has evolved, and there has been a notable shift as premiums are now being reported for physical steel with Co2 emissions of no more than one tonne per tonne of steel (for Scopes 1, 2 & 3), ranging from €200 to €300 per tonne. Recognising the market shift, several European steelmakers have announced substantial investments in green steel projects to reduce emissions and comply with stringent EU regulations.
The European Commission, as part of its European Green Deal, has proposed a new EU target to achieve a minimum 55 percent reduction in greenhouse gas emissions by 2030 compared to 1990 levels. This means that industrial companies will face the phased elimination of emission allowances under the EU emissions trading system (ETS) from 2026, leading to significant costs for materials produced with high emissions.
The industry insiders predict that by 2030, approximately 30 percent of the European steel market will consist of green steel, either zero or close to zero emissions. This shift towards greener steel production is driven by the need to meet sustainability goals and comply with regulatory requirements.
According to industry experts, a standard premium of €200 to €300 per tonne is now expected for Co2-reduced steel produced through the EAF route. The consensus among traders in Northern Europe is that demand for green steel from end users will continue to grow in coming years. The rising demand for low-emission steels and the willingness of consumers to pay premiums reflect the industry’s commitment to environmental sustainability.
