Singapore-based banking and financial services group OCBC has announced an equity investment in the development of a hot briquetted iron (HBI) plant that will form part of Southeast Asia’s largest integrated low-carbon steel complex. The investment is being made in Singapore-based Green Esteel Pte Ltd (Esteel) and marks the company’s first commercial funding from a financial institution in Asia.
The HBI plant will be located in the Sabah province of Malaysia and is scheduled to be commissioned by 2030. The project carries an estimated total investment of approximately $1.5 billion and is expected to deliver 2.5 million mt of HBI per year.
HBI will serve as a key feedstock for decarbonized steelmaking routes, enabling the production of a comparable volume of low-carbon steel. OCBC’s equity participation is being provided through its Mezzanine Capital unit under the bank’s Sustainability Investment Program, which focuses on green and transition assets as well as high-growth companies delivering sustainable innovation.
HBI seen as critical input for decarbonized steelmaking
Steel remains a fundamental industrial material, supporting construction, infrastructure and transportation while also underpinning net-zero technologies such as wind turbines, solar panels and carbon capture systems. However, conventional steelmaking relies heavily on coal and accounts for around seven percent of global greenhouse gas emissions, making it the most carbon-intensive manufacturing sector, according to the World Economic Forum’s Net-Zero Tracker Report.
Low-carbon steel technologies, particularly those replacing blast furnace-based routes, can reduce emissions by up to 80 percent. In this context, HBI is increasingly viewed as a critical bridge material supporting the transition toward cleaner steel production.
Global low-carbon steel market set for rapid growth
As economies accelerate decarbonisation efforts, demand for low-carbon steel is expected to rise sharply. The Green Steel Industry Report 2025 by Research and Markets forecasts that the global low-carbon steel market will expand at a compound annual growth rate of 21.4 percent from 2024, reaching a value of $19.4 billion by 2029.