Green Steel Market Size, Share, Trends, Industry Analysis, and Forecast (2025 – 2031)

Green Steel Market Size

The global green steelmarket size was valued at $9.53 billion in 2025 and is projected to reach $126.16 billion by 2031, growing at a CAGR of 53.8% during the forecast period.

Green Steel Market Overview

As of 2025, the steel industry continues to grapple with mounting pressure to decarbonize, with green steel emerging as a pivotal solution. Responsible for roughly 7 to 10 percent of global carbon dioxide emissions, traditional steel production is one of the most carbon-intensive industrial processes. In response, a growing number of companies are turning to green steel — a new wave of steelmaking technologies aimed at slashing emissions through the use of renewable energy, hydrogen-based direct reduction, and closed-loop recycling systems.

Driven by the accelerating demand for sustainable materials, green steel is becoming a focal point in both policy and industry circles. Early adopters of low-carbon production methods are already leveraging their environmental credentials to gain a competitive edge — including access to green procurement contracts, price premiums from eco-conscious buyers, and future-proofing against tightening carbon regulations.

Major players in the sector are also investing heavily in R&D, with Europe leading the charge through initiatives like the European Green Deal and Horizon Europe funding schemes. Meanwhile, Asia-Pacific remains a critical region in terms of production capacity and technological experimentation.

Drivers and constraints

• The green steel market is gaining significant traction, driven largely by rising global regulatory pressure to reduce carbon emissions, growing demand for environmentally sustainable materials, and rapid advancements in low-carbon steel production technologies. Governments across regions have tightened emissions standards, pushing traditional steelmakers to innovate or risk losing competitiveness. At the same time, heightened consumer awareness and corporate sustainability mandates are fueling demand for green alternatives across key sectors, including automotive, construction, and energy.

Challenges and long-term outlook

• Despite this momentum, the market faces several structural hurdles. High production costs remain a major barrier, particularly as hydrogen-based processes and renewable-powered furnaces require substantial upfront investment. Additionally, the complexity of carbon accounting and verification standards — which vary widely by region — continues to challenge uniform adoption. In many parts of the world, limited access to renewable energy further constrains the scalability of green steel initiatives.
• Nonetheless, recent developments underscore a broader shift in industry dynamics. A surge in strategic partnerships, joint ventures, and cross-sector collaborations is helping to accelerate the commercialization of green technologies. Investment in R&D is also increasing, with leading players focusing on breakthrough innovations to reduce costs and improve energy efficiency. Meanwhile, the global rise of electric vehicles and renewable infrastructure projects is creating new and expanding markets for green steel — reinforcing its position as a critical component in the future of low-carbon industry.

Increasing regulatory pressures for carbon emissions reduction globally is Driving the Green Steel Market

The increasing regulatory pressures for carbon emissions reduction globally are significantly impacting the green steelmarket, by fostering a favorable environment for sustainable practices.

• For instance, the European Union's Carbon Border Adjustment Mechanism (CBAM), introduced in 2023, aims to impose taxes on carbon-intensive imports, encouraging domestic producers to adopt greener technologies to remain competitive.
• Companies like Nucor Corporation launched Econiq in 2022, a line of net-zero steel products, in response to these regulatory shifts, targeting major clients like General Motors.
• Additionally, the U.S. government has set ambitious targets for reducing greenhouse gas emissions, which has led to initiatives like the National Hydrogen Mission announced in 2021, aimed at promoting green hydrogen production essential for green steel manufacturing.
• In Sweden, H2 Green Steel has pre-sold over 1.5 million tonnes of green steel before even starting production, representing strong demand driven by regulatory pressures.
• Furthermore, major automotive manufacturers, including BMW, have committed to using green steel in their supply chains, aligning with their sustainability goals and responding to increasing consumer demand for environmentally friendly products.

These examples illustrate how regulatory frameworks are not only pushing companies towards adopting green steel but also creating substantial market opportunities.

By Production Technology, the Renewable – Electric Arc Furnace (R-EAF)Segment is projected to be the Largest Segment in the Green Steel Market

Renewable – Electric Arc Furnace (R-EAF) is the largest segment in the green steelmarket, driven by increasing environmental regulations, technological advancements, and the urgent need for sustainable practices in various industries. The R-EAF technology is recognized for its ability to utilize renewable energy sources and significantly reduce carbon emissions compared to traditional steelmaking methods.

• In the U.S., the Inflation Reduction Act of 2022 has spurred investments in green technologies, including electric arc furnaces, providing tax credits for companies transitioning to low-emission processes.
• For example, Nucor Corporation, a major player in the steel industry, announced in January 2024 its plans to expand its electric arc furnace operations, aiming to produce green steel using renewable energy.
• Additionally, in March 2024, the Massachusetts-based company Boston Metal, which emerged from MIT, is developing a direct electrolysis process for steel production that utilizes renewable electricity, further demonstrating the innovative approaches being adopted in the R-EAF segment.
• Furthermore, automotive manufacturers like Ford and General Motors are actively seeking partnerships with green steel producers to source sustainable materials for their electric vehicles, aligning with their sustainability goals.

This combination of regulatory support, technological innovation, and industry collaboration is propelling the demand for green steel in the R-EAF segment, positioning it as a key player in the transition towards a more sustainable industrial landscape.

By Geography, Asia Pacific Holds the Largest Share in the Market Revenue

Asia Pacific holds the largest share of the green steelmarket, driven by rapid industrialization, urbanization, and strong governmental support for sustainability initiatives. Countries like China, Japan, and India are leading the charge, with China aiming for carbon neutrality by 2060, which necessitates substantial reductions in emissions from its steel industry, the largest in the world.

• In 2021, India launched its National Hydrogen Mission to establish itself as a global hub for green hydrogen production, which is essential for green steel manufacturing.
• Companies such as POSCO have committed to significant investments, exemplified by their $5 billion partnership with the Adani Group in January 2022 to create an environmentally friendly integrated steel factory in India.

Similarly, Japan is investing heavily in green steel technologies, with initiatives aimed at achieving carbon neutrality by 2050. Australia is also positioning itself as a key player in the green steel market, leveraging its abundant renewable energy resources to produce green hydrogen, which is crucial for sustainable steel production. The region's focus on transitioning to low-carbon technologies and the increasing demand for sustainable materials from industries like automotive and construction further amplify the growth potential of the green steel market in Asia Pacific.

Key Target Audience:

• Steel manufacturers and producers
• Raw material suppliers
• Energy providers
• Equipment and technology providers
• Consumer electronics and appliances manufacturers

List of the Key Players Profiled in the Report Includes:

• ArcelorMittal
• China Baowu Group
• Emirates Steel Arkan Group
• H2 Green Steel
• Nippon Steel Corporation
• Nucor Corporation
• Outokumpu Oyj
• Salzgitter AG
• SSAB
• Swiss Steel Group

Recent Developments:

• In August 2024, China Baowu Group has been actively pursuing green steel initiatives, including a partnership with the Shanghai Electric Group to develop a green hydrogen project aimed at reducing emissions in steel production. Specific press releases detailing recent developments are currently limited.
• In June 2024, Emirates Steel Arkan announced its commitment to sustainability by integrating green steel production methods and investing in electric arc furnace technology to reduce carbon emissions.
• In March 2024, H2 Green Steel secured a €2.59 billion investment deal with Iberdrola for green hydrogen production, which will support the manufacturing of green steel with a 95% reduction in CO2 emissions. This facility is expected to produce 2 million tons of pig iron annually.

Market Segmentation:

The research report includes in-depth coverage of the industry analysis with size, share, and forecast for the below segments:

Market by, Production Technology:

• Hydrogen Direct Reduced Iron – Electric Arc Furnace (H2 DRI – EAF)
• Molten Oxide Electrolysis (MOE)
• Renewable – Electric Arc Furnace (R-EAF)

Market by, Energy Source:

• Solar
• Wind
• Other Energy Sources

Market by, Application:

• Automotive
• Building & Construction
• Electronics
• Home Appliances
• Renewable Energy Infrastructure
• Other Applications

Market by, Geography:

The green steelmarket report also analyzes the major geographic regions and countries of the market. The regions and countries covered in the study include:

• North America (The United States, Canada, Mexico), Market Estimates, Forecast & Opportunity Analysis
• Europe (Germany, France, UK, Italy, Spain, Rest of Europe), Market Estimates, Forecast & Opportunity Analysis
• Asia Pacific (China, Japan, India, South Korea, Australia, New Zealand, Rest of Asia Pacific), Market Estimates, Forecast & Opportunity Analysis
• South America (Brazil, Argentina, Chile, Rest of South America), Market Estimates, Forecast & Opportunity Analysis
• Middle East & Africa (UAE, Saudi Arabia, Qatar, Iran, South Africa, Rest of Middle East & Africa), Market Estimates, Forecast & Opportunity Analysis

The report offers insights into the following aspects:

• Analysis of major market trends, factors driving, restraining, threatening, and providing opportunities for the market.
• Analysis of the market structure by identifying various segments and sub-segments of the market.
• Understand the revenue forecast of the market for North America, Europe, Asia-Pacific, South America, and Middle East & Africa.
• Analysis of opportunities by identification of high-growth segments/revenue pockets in the market.
• Understand major player profiles in the market and analyze their business strategies.
• Understand competitive developments such as joint ventures, alliances, mergers and acquisitions, and new product launches in the market.