From flats to longs: Europe’s ‘green’ steel conversation expands
When it comes to Europe’s nascent “green” steel sector, conversation for the most part has centered on flat products.
After all, flats — including hot-rolled coils and sheets –, account for the bulk of both the continent’s steel production and consumption, and the flats sector was the first to see premiums for material certified with a lower carbon profile than standard steel.
The annual combined European flat product deliveries and imports averaged around 82.96 million metric tons from 2013-2022, according to European steel producers association Eurofer. During the same period, the annual combined European long product deliveries and imports averaged about 49.58 million MMt.
Premiums emerged last year in Europe for carbon-accounted flat steel, and Platts, part of S&P Global Commodity Insights, addressed market demand for price assessments and data to help bring transparency to trade in such products — launching first-of-their-kind daily carbon-accounted HRC assessments in May 2023.
And now that the green conversation in Europe has extended to other markets, including long steel products used in construction, Platts has also expanded its carbon-accounted assessment offerings.
Carbon-accounted longs enter the picture
Effective Sept. 11, Platts launched new weekly spot price assessments for European carbon-accounted rebar and medium sections.
The new assessments — which Platts understands to be the first carbon-accounted assessments for long steel — include a European Rebar Carbon-Accounted Steel Premium (Rebar CASP), a European Medium Sections Carbon-Accounted Steel Premium (Medium Sections CASP), a Northwest Europe Rebar Carbon-Accounted Steel Price and a European Medium Sections Carbon-Accounted Steel Price.
Based on industry feedback, the European rebar and medium sections carbon-accounted steel premiums reflect any differential achieved for the spot sale of rebar and medium sections, with total accounted carbon emissions of 0.6 metric tons of CO2-equivalent, or less, for every metric ton of steel produced.
The assessments include emissions from direct, indirect and associated upstream and downstream activities, such as processing of steelmaking raw materials, hot metal production, steel rolling and associated transportation and logistics — typically referred to by market participants as scopes 1, 2 and 3.
Carbon emissions must be certified by an internationally accepted independent organization, and market participants will be expected to supply proof of such certification upon request.
Trade in steel products using offsets to reduce overall emissions profiles, such as carbon credits sourced from voluntary carbon markets, will not be considered for inclusion in the assessments. Platts will consider trade where a mass balancing approach has been applied and validated by a certified internationally accepted independent organization.
Platts assessed the Rebar CASP at Eur40/mt, Sept. 18, down from Eur70/mt Sept. 11 and the Medium Sections CASP at Eur65/mt, Sept. 18,down from Eur92.5/mt Sept. 11.
‘Historic, strategic turning point’
It is easy to see why the construction sector has entered the green conversation. Construction — which relies heavily on longs like rebar and medium sections for support — is not only the largest end-use sector for steel, but is also one with high associated carbon emissions.
Steel production generates 7%-9% of global CO2 emissions and about 5% of overall emissions in Europe, according to the Institutional Investors Group on Climate Change.
And regulatory requirements, such as the European Union’s Carbon Border Adjustment Mechanism scheme, as well as accelerated decarbonization efforts around the world, have underscored the need for heavy industries like steelmaking to move quickly to reduce carbon emissions.
In a Sept. 5 paper titled ‘Investor priorities for transitioning the European steel sector,’ the IIGCC said “the steel sector’s decarbonization is essential” and that “creating a supportive policy environment for the transition of high-emitting sectors is critical for achieving Europe’s commitment to climate neutrality by 2050.”
To stimulate low-carbon steel demand, the IIGCC said public steel procurement could be used as a tool to drive decarbonization innovation and incentivize use of low-carbon steel products. Financial incentives could include point-of-sale subsidies, tax exemptions, post-purchase rebates or tax credits, the IIGCC said.
Such investment would mirror investment made by European steelmakers offering carbon-accounted steel — mainly through conversion to electric-arc furnaces or implementing hydrogen and fossil-free fuel production. The steelmakers that have technology upgrades and innovative steelmaking investments will be essential not only for Europe’s own industry, which faces a “historic, strategic turning point,” but in the global steel industry’s decarbonization journey as well, IIGCC said.
“Investors see Europe as well positioned to lead the global transformation of the steel sector,” it said. “The EU is a large, highly developed economy with generally high-end steel production that can seize the opportunities and show what is possible, paving the way for other regions to follow.”
Several factors holding back green market activity
While the release of investment funds by the European Union and individual governments in the region have helped to kick off technical enhancements to reduce producer emissions, there are still several factors that are holding back trading activity of lower carbon emission products.
A hampering factor for the acceleration of carbon-accounted steel is the lack of an internationally adopted industry standard. Associations and trade groups such as the German steel federation and Responsible Steel have started to publish guidelines in the hope that they would become standards, but they’ve yet to gain widespread adoption.
A difficult economic environment seen in 2024 has meant that those who do not necessarily need to buy material with a lower carbon profile have opted for less expensive conventional steel – or have limited their spot market buying activity.
Rising interest rates and a near-recession in Germany hit medium-sized businesses — the so-called Mittelstand in Germany and the backbone of Europe’s biggest economy. German manufacturing remains weak, while the automotive industry also is struggling.
Demand and price development for carbon-accounted steel remains deeply correlated with the conventional steel market, and in times of weak steel demand for the market at large, carbon-accounted steel remains heavily affected.
Analysts at Commodity Insights do expect some near-term upside, with a steel price recovery from December 2025 due to restocking and restricted import supply.
Once restocking activities resume and economic tightness ease, trading activity is likely to resume to previous levels, market participants contend.
It then will be up to steelmakers in Europe and abroad to execute on the vision of Europe as a global leader in the energy transition.
Laura Varriale | Christopher Davis
European green steel premiums slide amid general downturn in steel sector
“This year started on a positive note, but demand is deteriorating, the steel market is weak in general and the willingness to pay a premium [for green steel] is not there,” a mill source told Fastmarkets.
Market participants said there was a lack of projects across Europe requiring green steel and demand from the key consumer – the automotive industry – had also been slow lately.
European suppliers have, therefore, started to be more flexible with their green steel sales and have started offering discounts on bigger lots.
Notably, recent trades for steel with Scope 1, 2 and upstream Scope 3 emissions below 0.8 tonnes of CO2 per tonne of steel, were reported at €100-150 ($111-166) per tonne.
And one transaction was said to have been completed with a premium below €100 per tonne – although that was for for steel with CO2 content below 0.3 tonnes per tonne of steel and could not be widely confirmed, sources told Fastmarkets.
Most buyers estimated the achievable premiums for green steel with Scope 1, 2 and upstream Scope 3 emissions below 0.8 tonnes of CO2 per tonne of steel at €100-200 per tonne.
In stark contrast, however, offers for the same material were reported at €200-300 per tonne during the assessment week.
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €100-200 per tonne on Thursday, widening downward from €150-200 per tonne on August 29.
The corresponding green steel base price, HRC exw Northern Europe, daily inferred was €737.60 per tonne at the midpoint on September 5.
Despite the weak market and slow consumption, sources told Fastmarkets they remain optimistic regarding the take-off of green steel in Europe in the coming years.
“The transition to green steel is still on the cards – it’s coming; it’s inevitable. But considering the current economic situation [in Europe], it is going to be delayed,” a large buyer in Northern Europe said.
Thyssenkrupp to cooperate with BlueScope on low-carbon steel research
The focus of the joint research will be on smelting units and direct-reduced iron (DRI) plants, it added.
The cooperation between the two companies will continue for four years, intended to enhance the understanding of smelting technologies and to optimize the management of Thyssenkrupp’s new DRI complex in Duisburg, now under construction.
BlueScope Steel has already gained experience in these technologies by operating smelters in New Zealand using DRI made from iron sand, Thyssenkrupp said.
Thyssenkrupp already had plans to replace one of the four blast furnaces at its Duisburg site with a DRI plant and two downstream smelters in 2027, a company spokesperson told Fastmarkets. This would allow the company to make its first steps toward carbon-neutral steel production, Thyssenkrupp added.
The other three BFs will gradually be replaced with climate-friendly alternative technologies by 2045, the spokesperson told Fastmarkets.
The new plant will have capacity for 2.5 million tonnes per year of DRI. The company also planned to be able to produce around 5 million tpy of low-carbon steel by 2030.
Thyssenkrupp has obtained €2 billion ($2.2 billion) in German state funding for its green steel transformation project.
The DRI module at Duisburg will be powered by green hydrogen, which is seen as a strategic renewable fuel in Europe.
According to the hydrogen import strategy approved by the country’s Federal Cabinet at the end of July, demand for hydrogen and hydrogen derivatives in Germany will amount to 95-130TWh in 2030.
“In the smelters, DRI and aggregates are melted to form hot metal,” Thyssenkrupp said. It added that two identical smelters, each electrically powered and with capacity for 100MW, were being built to process the 2.5 million tpy of DRI output.
Thyssenkrupp added that, ideally, renewable electricity would be used to power the smelters.
“The smelters offer numerous advantages in an integrated metallurgical network,” Thyssenkrupp said. “They enable the production of equivalent ‘electric furnace iron’ while all other process stages, including the steel mill, remain in place, and [further] investments in plants and equipment are minimized.”
The company added that, by retaining all processes from the steel mill stage onward, Thyssenkrupp would continue to provide its customers with “the entire range of steel grades in the usual high quality.”
According to the company, the use of a smelter offers a flexible raw material basis, since DR pellets can also be used in the DR plant.
Another advantage of this technology was that the molten slag could be processed further and used in the cement industry, thus contributing to recycling management.
Demand for green steel remains slow in Europe
Demand for flat green steel was still sporadic in Europe. This was a result of both seasonal factors and relatively low green steel uptake across supply chains, industry sources have told Fastmarkets.
During the assessment week ended August 15, offers of green steel with Scope 1, 2 and upstream Scope 3 carbon emissions of less than 0.8 tonnes per tonne of steel were reported at €200-350 ($221-386) per tonne from European suppliers, stable week on week.
But due to the slow demand, producers were apt to give discounts. As a result, a booking of flat steel with carbon emission content of around 0.6-0.8 tonne per tonne of steel was reported at €170-200 per tonne in late July/early August.
Fastmarkets’ latest weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €170-200 per tonne on August 15, narrowing downward from €170-250 per tonne seven days earlier.
European green steel premiums narrow downward; end-user demand slow
During the assessment week, offers for green steel with Scope 1, 2 and upstream Scope 3 carbon emissions below 0.8 tonnes per tonne of steel were reported at €200-350 ($219-329) per tonne from European suppliers, stable week on week.
Buyer sources, however, pointed out that for bigger volumes European mills could accept lower prices.
As a result, buyers’ estimations of tradeable values for such material were heard at €100-150 per tonne. The lower end, however, was deemed unworkable by sellers so far.
A distributor source reported a booking of flat steel with carbon emission content of around 0.6-0.8 tonne per tonne of steel at €170-200 per tonne in end-July-early August.
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €170-200 per tonne on Thursday, narrowing from €170-250 per tonne seven days ago.
The corresponding green steel base price, HRC, exw Northern Europe, daily inferred was €780.38 per tonne on August 15.
Demand, however, remained limited. Transactions for steel with reduced carbon content in most cases were done directly between steelmakers and end users. The automotive industry remained the major buyer of green steel in Europe, market sources said.
“The market [for green steel] is sleepy, there is a seasonal slowdown, and automotive is not performing well, so overall demand [ for green steel] remains on the low side,” a buyer in Germany said.
“Green steel market is not big, but we see more interest from automakers, and the construction industry is starting to catch up in some regions,” a seller source said.
But even key consumers were seen booking mainly test batches, and green steel uptake in general has been quite low across the steel supply chain so far, Fastmarkets understands.
Per the Greenhouse Gas (GHG) Protocol Corporate Standard, Scope 1 refers to direct emissions generated by an entity or its subsidiaries. Scope 2 refers to indirect emissions from energy used by an organization. Scope 3 refers to indirect emissions – from activities of the entity – that occur from sources beyond their control.
US green steel premium faces continued inertia
US steel consumers are resisting paying a premium for green steel, Wade Wright, a steel consultant told participants at a green steel webinar held by Jefferies Equity Research on Monday August 12, highlighting the pushback from automakers.
“Auto companies are [not] willing to pay a premium for [material with] a little lower carbon footprint than what [they] had last year or the year before that,” Wright said.
Steel production via electric arc furnaces (EAFs) accounts for over 70% of production in the US, according to the American and Iron Institute, compared with a 26% global average.
EAFs have a lower carbon footprint due to its use of electricity, compared to blast furnaces (BFs), which rely on coal, leading to higher carbon dioxide and other pollutant emissions.
Since buyers in the US are already paying for relatively cleaner steel, they are simply not willing to pay more for the same steel.
“I wouldn’t pay extra for green steel. I think most of our mills have the best manufacturing processes to keep the carbon emissions at the lower levels. I have no interest in paying a premium for what a mill now claims as green steel,” a distributor, who typically purchases from an EAF mill, told Fastmarkets.
They added: “I think lot of companies are greenwashing their mill’s operations to add some kind of perceived value to the same products they’ve always produced.”
A second distributor said that no one is talking about green steel.
“I think what is hindering it is the same reason that I have for not promoting it — until the rest of the world matches our level of carbon reduction, what is the use? Does the world get to pollute and only the US has to conform?” the second distributor said.
Due to the large aversion to paying a premium for green steel, it’s probable that the US market is not going to see acceptance for “a while,” Wright said on Monday, with the only thing likely to spur any acceptance is “federal intervention.”
In March, the Department of Energy’s (DOE) invested $6 billion in decarbonization projects to reduce industrial greenhouse gas emissions, which was funded by President Biden’s Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA).
Integrated steelmaker Cleveland-Cliffs was awarded $500 million to replace its blast furnace (BF) at its Middletown Works facility in Ohio with a hydrogen-ready direct reduced-iron (DRI) plant and two electric-melting furnaces.
SSAB Americas has also been selected for award negotiations for the potential construction of a HYBRIT manufacturing facility, which can produce fossil-free iron by using green hydrogen instead of fossil fuels.
Fastmarkets’ weekly green steel domestic, differential to US HRC, fob mill was flat at $0 per short ton on August 14.
Fastmarkets’ domestic green steel base price, hot-rolled coil fob US mill stands at $678.30 per ton. The price is the average of the most recent US Midwest and South HRC prices plus the US green steel differential.
Fastmarkets defines US green hot-rolled as having emitted carbon at or below 0.7 tonnes CO2e per 1 tonne of steel. This can be reached via native production, mass balancing, or renewable energy credits. Carbon offset credits are explicitly barred. The full methodology can be found here.
Fastmarkets’ domestic green steel, flat-rolled, differential to HRC index, exw Northern Europe was unchanged at €170-250 per tonne on August 8.
Meanwhile, Fastmarkets’ green steel import, differential to HRC index, cfr Vietnam was also unchanged at $150-200 per tonne on August 8.
German court ruling on ‘Greenwashing’ could challenge steel industry transparency
A recent German court decision against greenwashing could spell trouble for the steel industry, says stainless steel trader Gerber Group.
The German Federal Court of Justice (BGH) recently set a restriction for the use of the “climate neutral” label in product promotion. The term is permittable only if the climate neutrality is clearly explained to the consumer.
The judgement was made in the context of fruit gum and liquorice from a particular brand, which advertised its products as “produced climate-neutrally”. According to the court, the slogan is misleading as the production process of the sweets is by no means free from CO2. The alleged climate-neutrality is actually achieved by offsetting through nature project investment.
When approached by Kallanish, a spokesperson for the court said that steel or its related industries were not under consideration in this context, and that no similar cases are pending for those industries.
However, Gerber finds that this could, and should be happening, and provokingly asks: “Is this the end for green steel intransparency?” In a commentary piece on its website, the group warns that the BGH judgement is likely to seriously shake up the “green steel” concept and pose challenges for many manufacturers.
It attacks steelmakers for constantly coming up with new, colourful labels – blue, green, responsible – “with the sole purpose of creating a lack of transparency regarding CO2 emissions.” It adds: “They try to distract from the fact that there is no real CO2 reduction – at least not in technical terms.”
Gerber predicts that the BGH ruling for the food industry will also be echoed in B2B industries and create better transparency there. It will “make clearer who has taken real measures to reduce CO2 emissions from steel and who is just trying to get away with indulgence payments,” Gerber writes.
Christian Koehl Germany
ArcelorMittal to supply XCarb to Knauf Interfer
ArcelorMittal will supply German distribution group Knauf Interfer with CO2-reduced input material, Kallanish learns from the steelmaker.
At ArcelorMittal Europe – Flat Products, CO2 savings are achieved with the “XCarb recycled and renewably produced” label and also through the sale of “XCarb Green Steel Certificates” in line with customer requirements, the steelmaker says.
In partnership with ArcelorMittal Europe – Flat Products, Knauf Interfer will soon be using the “XCarb recycled and renewably produced” product in series production for several customer projects.
Knauf Interfer, in turn, can pass these CO2 savings on to its customers. In this way, the two partners want to safeguard the supply chain. Knauf is thus forming a central interface between steel manufacturers and customers, both through its steel service centres and through its own forming blanks and cold rolling activities, ArcelorMittal explains.
Knauf Interfer processes the steel into slit strip, sheets, formed blanks or cold-rolled precision steel for applications in segments such as drives, engines or seats.
Christian Koehl Germany
Tata Steel moves forward with first phase of ‘Green Steel’ plan in the Netherlands
Tata Steel Nederlands said on Monday May 27 that it had awarded contracts for the basic engineering of the EAF and DRI to two Italian companies – equipment supplier Danieli and system solutions specialist Tenova.
Part of the first stage of Tata Steel Nederlands’ “Green Steel” plan, which it expects to be complete by 2030, the EAF will replace the site’s largest blast furnace, BF7, while the DRI plant will replace one of the company’s coke-making plants.
The company did not specify the capacity of the new equipment and did not provide any further details to Fastmarkets’ questions on the issue.
“We cannot share any more information yet about the capacity,” a company spokesperson said, although market participants told Fastmarkets the EAF capacity was likely to be around 3 million tonnes per year.
Tenova said the DRI equipment would refine the liquid metal from the EAF to produce high-quality steel, particularly for the automotive sector.
According to Fastmarkets’ data, at IJmuiden, Tata Steel currently has the capacity to produce 7.5 million tpy of crude steel and produces hot-rolled, cold-rolled, hot-dipped galvanized, and pre-painted coil, along with tin-plated products.
The DRI plant and EAF will cut CO2 emissions by 40%, Tata Steel Nederland said.
In the first stage of its Green Steel plan, the company also aims to further reduce its emissions and particulate matter by using more scrap in steel production, raising its usage from 17% scrap to 30% by 2030.
The steel producer said that it would apply for the necessary permits for the new equipment by the end of 2024.
In the second phase of its transition, Tata Steel Nederlands will close its BF6 and its other coke-making plants, resulting in an 80% reduction in CO2 emissions from 2030 to 2045, by which time the company will be “CO2 neutral.”
Political support concerns
Tata Steel Nederlands decarbonization plans have previously been supported by the Dutch government and, at the end of April, the outgoing Dutch government formally declared that it wanted to Tata Steel’s plan to become more sustainable enacted more quickly, with government representatives starting negotiations with the steelmaker over a legally binding and enforceable tailor-made agreement to do just that.
“Tata Steel’s focus is now entirely on the first phase of its Green Steel plan,” the steelmaker said on Monday. “[And] once the tailor-made agreement with the Dutch government is in place, the company can begin ordering long lead items based on the progressed engineering work, ensuring [that it stays] on track for 2030,” the company said.
But it is not clear how the new Dutch government – a right-wing coalition formed by Dutch nationalist Geert Wilders – will treat such decarbonization projects, with the country’s the most right-wing government for decades likely to deprioritize climate change regulations in favor of more protectionist, nationalistic policies.
Asked to comment on the possible impact of the new government’s future policies on Tata Steel Nederland’s Green Steel plan, the spokesperson for the company said the mandate had been given to the Minister of Economic Affairs & Climate Policy to continue the talks on the tailor-made plan.
“So that is what we do at this moment,” the spokesperson added.
Notably, the new coalition plans to reduce climate change funding by €300 million ($326 million) every year for the next four years – amounting to total cuts of €1.2 billion, according to local media reports.
Sources said the funding cuts will be achieved through cuts in the development of renewable hydrogen.
The Dutch Ministry of Economic Affairs & Climate Policy was approach for comment, but had not responded by the time of publication.
The issue of developing green hydrogen is already a key topic of conversation among European steelmakers.
ArcelorMittal Europe chief executive, Geert van Poelvoorde, told global energy transition information service Hydrogen Insight earlier this year that it could not operate its European plants using green hydrogen, despite billions in EU state funding, because the resulting green steel would not be competitive in international markets.
Using hydrogen with existing DRI modules in Europe is quite expensive, Fastmarkets understands, with hydrogen prices currently around €5-8 per kg, but needing to be closer to “€2.5-3.0 per kg to be commercially viable for steelmaking,” a steel producer in Northern Europe said. To produce 1 tonne of liquid metal in a DRI module, around 80 kg of hydrogen is required, according to industry estimates.
Liberty Steel hints at preparing Hungary’s Dunaferr for green transition after acquisition
“The iron and steel works [of Dunaferr] has been saved, but now needs to be repaired and prepared for a sustainable long-term future,” according to a letter from Liberty Steel’s European chairman Ajay Aggarwal and its chief investment officer Sandip Biswas.
Just over a month ago, UK-registered Liberty Steel won the tender for Dunaferr. However, the sale is not yet completed, as the European Commission has yet to approve the acquisition, making the liquidator exercise ownership rights and take strategic decisions.
A spokesperson for Liberty Steel declined to comment on the content.
The letter mentions the understanding between the liquidator and Dunaferr’s management in relation to the challenging European market conditions and specifically high levels of foreign steel imports into the EU, high energy prices, and additional costs in meeting EU carbon emission standards, and the necessity to pause steel production as these conditions persist.
The liquidator has therefore agreed to Liberty’s suggestion to temporarily and for an unspecified period stop steel smelting and take offline blast furnace No. 2 — the last operational of the two BFs at the plant — and reduce the operation of the coke plant to a technological minimum, according to the letter. However, the rolling mill continues to process slab stocks, the letter added.
Liberty Steel since the end of 2022, when Dunaferr was in a bad state amid its major facilities shut down, has worked closely with the liquidator, helping the restart of Dunaferr’s blast furnaces and coke ovens, in addition to steel production and rolling mills.
Previously, Liberty Steel informed the market of the green transition in the works for its other major Eastern European mill and Romania’s largest steelmaker Liberty Galati. Just over a year ago, Liberty said it was about to hold a tender to select a supplier of hybrid electric arc furnace technology needed to produce low-carbon steel at Galati, but this was never completed.
Stahlwerk Thüringen to connect Unterwellenborn steel mill to German hydrogen network
German steel producer Stahlwerk Thüringen plans to connect the Unterwellenborn steel plant to the country’s expanding hydrogen network, it said Aug. 15.
Under the terms of a memorandum of understanding signed with pipeline system operator Ferngas, Stahlwerk aims to connect its Unterwellenborn plant in Thuringia to the hydrogen network from 2027.
Stahlwerk has been decarbonizing its steel mill operations, with the plant already utilizing 100% renewable energy for green steel production.
The decision to purchase green hydrogen via the grid infrastructure in the future is an important step toward largely decarbonized steel production, the company said.
“We want to take the next step toward the sustainable development of the steel industry and underline our leading role in the application of more environmentally friendly technologies,” said Alexander Stolze, head of purchasing, Stahlwerk. “The connection to the hydrogen network will maintain our competitiveness and strengthen the Thuringian steel mill as a center of low-emission steel production.”
The companies will need to acquire associated permits proving hydrogen operability at the plant and secure approval from the local legislature to operate the hydrogen lines.
Platts, part of S&P Global Commodity Insights, assessed Northwest European hot-rolled coil carbon-accounted steel at Eur735/mt ($803/mt) ex-works Ruhr on Aug. 14, down from a peak of Eur885/mt at the start of July. The Platts European carbon-accounted assessment is for HRC with a maximum 2.1 mt of carbon emissions through steel production and from the supply and processing of feedstocks, covering Scopes 1, 2 and 3.
