Most steel buyers remain motivated by price rather than environmental concerns, while the expected shift to the right in European politics could impact policy support for low-emission steelmaking, concluded a panel at the Kallanish Europe Steel Markets 2024 conference in Milan last week.
Speakers agreed that outside of potential adoption by automobile manufacturers, widespread demand for green steel is a long way from becoming an industry norm.
“I think we’re going to see a green premium in the end. It’s going to take a while, and yes … if I phone up a customer and say I have two coils, here are regular ones and here are green ones, one is a hundred or two hundred euros more, they’re going to go: ‘I’ll have the cheap one, please’,” said Julian Verden, managing director Europe at Stemcor.
Tommaso Sandrini, chief executive of S. Polo Lamiere SPA, noted that EU policy is likely to change following last week’s European Parliament election that saw big gains for parties on the right. Environmental concerns, moreover, were born from more peaceful and prosperous times. Demand for lower-emission steel and prioritising policies to sponsor production of lower emission-steel are not as pressing amid so much global unrest and economic uncertainty.
“The environment was a priority. Now, last weekend, I think we got a significant and clear message from the different European countries. It will change the priorities that the European regulators will have to follow,” Sandrini stated.
Lack of regulation around what constitutes green steel, while a source of frustration for producers, is arguably a competitive advantage for some steel sellers. Mario Borsese, co-founder of DP Trade, asserted that price is ultimately still the bottom line for buyers and sellers. “At the end of the day, [a service centre chief executive] is comparing prices, prices of green steel from producers, so called green steel producers because green steel is not yet regulated … He doesn’t care, he cares about the prices,” Borsese said.
Verden noted that younger people will be the drivers behind the adoption of cleaner steel processes, policies, and products, “I think it’s the young people who will force through the change. Old guys like me are probably still going to drive our Range Rovers, but the young kids are not going to fly around too much. They’re going to go on the train, they’re going to walk, they’re going to cycle and they’re going to be in our ear to reduce the massive pollution that our global industrialisation makes.”
Kristen DiLandro USA