Steel industry associations have warned that growing delays to green steel projects and insufficient government support are jeopardizing efforts to decarbonize the global steel industry, according to a Reuters report.
Speaking at an industry meeting in Singapore, representatives of the World Steel Association (worldsteel) stated that approximately half of the world’s planned green steel projects have already been delayed. According to the association, governments have so far committed only around $20 billion toward steel decarbonization, significantly below the estimated $1.5 trillion required to transform the global steel sector.
Funding and demand challenges persist
Industry executives noted that emissions reduction efforts are advancing more slowly than anticipated and are likely to continue facing obstacles unless governments provide substantially greater support or customers become more willing to pay a premium for lower-carbon steel products.
Worldsteel highlighted that steel production accounts for approximately 7-9 percent of global greenhouse gas emissions, making decarbonization of the sector an important component of broader climate goals.
However, Shaoliang Zhong, deputy secretary general of the association, stated that the current project pipeline is expected to deliver only around 70 million mt of green steel annually by the end of the decade, compared with global steel production of roughly 2 billion mt. According to Zhong, financing difficulties, weak market demand and shortages of green hydrogen have contributed to delays affecting approximately half of planned green steel capacity worldwide. Green hydrogen is expected to play a key role in many decarbonization strategies by replacing metallurgical coal in ironmaking processes. He also noted that despite industry commitments, steel emission intensity has remained largely unchanged over the past decade.
Conventional steel investments continue
Conference participants indicated that many customers remain reluctant to absorb the higher costs associated with cleaner steel products. At the same time, investments in traditional blast furnace-based steelmaking continue to expand in India and Southeast Asia. According to OECD forecasts cited during the event, planned blast furnace capacity additions in these two regions between 2024 and 2026 are roughly equivalent to the entire global green steel project pipeline.
Yeoh Choon Kwee, deputy president of the Malaysia Iron & Steel Industry Federation, stated that while green steel production is important, producers must also remain economically sustainable. He argued that decarbonization initiatives have focused largely on the supply side and that stronger demand-side policies are needed. According to Yeoh, governments should take a more active role by requiring the use of green steel in major infrastructure projects to help stimulate demand and support investment in low-carbon steelmaking technologies.