EU’s green steel transition raises supply issues

The EU’s transition to green steel raises concerns about supply-side constraints given delays to capacity expansions and current offers not meeting customer requirements, German steel distributor Kloeckner’s CEO Guido Kerkhoff said at the EUROMETAL conference in Zurich today.

This could be offset by growing opportunities on the demand side as the EU’s 2050 net zero targets are boosting demand for green steel, which currently exceeds the supply.

A green transition cannot happen immediately but must be implemented gradually, a market participant said. Customer willingness to pay for low-emission products is increasing, particularly for cars and home appliances. “We can’t say this is green and this is not, but we can say this is a greener option for the time being,” executive manager of Handel Schweiz, Andreas Steffes, said.


The shift to electric arc furnaces (EAFs) is very costly and not feasible for every producer, mainly because the scrap supply is limited, Steffes said. Additionally, Germany heavily depends on importing raw materials and cheaper energy owing to a lack of natural sources. This creates a significant challenge for using direct-reduced iron (DRI) in Germany, as there are not enough renewable sources to produce hydrogen, and importing hydrogen is very expensive, partly because of high transportation costs.

So far, there is no uniform standard for green steel, although work is being done in this regard.

To transform the steel industry, several tailwinds should be considered, including establishing a solid political framework, competitively priced green energy, sufficient technological solutions, fair allocations of subsidies, and demand from customers and green markets, senior manager at Swiss Steel, Stefan Feichtinger, said.

By Elif Eyuboglu