Europe’s green steel market remained quiet in the week to Friday April 17, with spot activity near zero. But a couple of major green steel projects have moved forward, Fastmarkets heard.
Recent developments from Marcegaglia and Stegra point to continued investment in electric-arc furnace (EAF) technology and hydrogen-based steelmaking, while the industry works toward lowering emissions and improving supply sustainability in a difficult market environment.
Green steel projects progress
Marcegaglia
Italian re-roller Marcegaglia advanced its electric-furnace project implementation. On April 14, it awarded equipment supplier Danieli a €450 million contract for construction and spares for a new EAF and flat rolling facility in Fos-sur-Mer, France.
The project, named Mistral, has total capex in the range of €1 billion. It will include an EAF, a single strand continuous slab caster producing thick slabs, and a conventional hot strip mill.
Once completed, the new EAF will have capacity for more than 2 million tonnes per year of liquid steel and as much as 3 million tpy of stainless and carbon steel hot-rolled coil. This will cover approximately 35% of the Marcegaglia group’s total coil and slab demand, primarily supplying downstream facilities in Italy, the company said.
The company also highlighted the “green” nature of the project. The use of scrap, low carbon hot-briquetted iron (HBI) and nuclear and renewable energy will enable as much as 80% reduction in greenhouse gas (GHG) emissions compared with traditional methods.
The final investment decision on the project was expected no later than the end of 2026, following completion of the permitting process and other conditions currently in advanced negotiation with the relevant French institutions.
Marcegaglia is one of the major HRC buyers in Italy, with estimated import volumes of 4-5 million tpy.
It operates as a re-roller and can produce about 2.4 million tpy of cold-rolled coil and about 1.9 million tpy of coated coil at its Ravenna site in Italy. The company also has a plate-producing facility in San Giorgio di Nogaro, as well as tube-welding facilities in north-eastern Italy.
Stegra
On April 14, Sweden-based green steelmaker Stegra agreed in principle on €1.4 billion in new financing from a combination of new and existing investors to complete the construction of its large-scale green steel plant in Boden, Sweden.
As for overall financing, Stegra earlier announced funding of about €6.5 billion. This includes €250 million from the EU innovation fund and a public grant in Sweden. A public grant in Sweden was approved for €265 million. And €143 million has been fulfilled through the Industrial Leap program
Industry sources told Fastmarkets that Stegra has completed around 60-70% of the construction work, with production expected to commence around the first half of 2027. Stegra, however, did not confirm that when contacted by Fastmarkets. “We have not gone out with new numbers on project completion [construction works is only a part of that, which also includes engineering and procurement] and we have also clarified that the timeline is under review,” a spokesperson told Fastmarkets on April 17.
Capacity for direct-reduction iron (DRI) was expected to amount to 2.1 million tonnes, with 2.5 million tpy of HRC capacity planned. By 2030, the plant was expected to produce about 5 million tpy of green steel and use an electrolysis capacity of 700MW.
The company also planned to sell green DRI/HBI in the European market, with some volumes already sold, Fastmarkets heard.
“We are selling the surplus HBI to other steelmakers until we have phase 2 completed and then we will consume it ourselves,” the spokesperson said.
Buyers reluctant to pay premiums for green steel
Meanwhile, spot market demand for reduced-emissions steel was still constrained, with buyers unwilling to absorb high premiums.
Market sources cited both pricing pressures and the lack of clear, harmonized definitions and standards in Europe as barriers to wider adoption.
Under Fastmarkets’ methodology, European green flat steel refers to material produced with combined Scope 1, 2 and 3 emissions not exceeding 0.8 tonnes of CO2 per tonne of steel.
According to buyers, workable premiums for reduced-emissions steel were generally in the range of €100-150 per tonne, with some deals reported concluded at minimal or zero premiums for strategic or branding considerations. Producers, however, argued that viable premiums should be closer to €150-170 per tonne.
A mill source reported small-tonnage deals for 100-500 tonnes done with premiums at €150-160 per tonne, but admitted that interest in green products overall remained weak.
As a result, Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was little changed week on week at a premium of €100-160 per tonne on April 16, widening upward from €100-150 per tonne seven days earlier.
The corresponding weekly green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe, narrowed €0-25 per tonne on April 15, from €0-30 per tonne per tonne on April 8.
Fastmarkets’ methodology defines European green long steel as steel produced with Scope 1, 2 or 3 emissions at a maximum of 0.5 tonnes of CO2 emissions per tonne of steel.
One German producer noted that there has recently been some increase in local interest in green material, but normally demand comes from Nordic countries and the UK. Nevertheless, customers were not ready to pay any premiums.
Another supplier said that the company was charging €25-50 per tonne premium for its material with reduced carbon content, but noted that demand has dropped this year compared with 2023 and 2024.
A supplier from Southern Europe also said that green material procurement is definitely not a priority in Europe at the moment, due to the caution in the market driven by the geopolitical uncertainty in the global arena.
