Investment in conventional blast furnaces continues across India and Southeast Asia. Many of those facilities have lifespans of up to 40 years, locking in emissions for decades.
| Photo Credit:
REUTERS/THILO SCHMUELGEN
Delays to green steel
projects are growing and government support is far short of what
is needed, jeopardising the industry’s drive to cut emissions,
steel associations warned at an annual meeting in Singapore this
week.
About half of the world’s planned green steel projects have already been delayed, while governments have committed just $20 billion of the $1.5 trillion needed to decarbonise the sector, according to the World Steel Association.
Industry executives said progress on cutting emissions has
been slow and is likely to remain so without a major increase in
state funding or customers willing to pay more for cleaner
steel.
The gloomy assessment stands in contrast to renewed investor
interest in renewable energy and clean technology following the
Iran war, which has driven up oil and gas prices.
CUSTOMERS WON’T PAY A PREMIUM
Green steel – generally steel produced with a lower carbon
footprint – is critical because the industry accounts for about
7% to 9% of global emissions.
Yet the current global project pipeline would deliver only
about 70 million metric tons of green steel a year by the end of
the decade, a fraction of the roughly 2 billion tons of total
steel production forecast, said Shaoliang Zhong, deputy
secretary general of the World Steel Association.
Roughly half of that already modest pipeline has been
delayed by financing constraints, weak demand or shortages of
green hydrogen, which some producers hope could replace
metallurgical coal in blast furnaces, Zhong told Reuters on
Friday.
“Over the past 10 years, steel emission intensity remained
almost flat despite commitment among steelmakers to reduce
carbon emissions,” Zhong said, referring to emissions per ton of
steel produced.
Traders and steelmakers told Reuters during the conference
that many customers remain unwilling to pay a premium for
cleaner steel.
Meanwhile, investment in conventional blast furnaces continues across India and Southeast Asia. Many of those facilities have lifespans of up to 40 years, locking in emissions for decades.
New blast furnace capacity planned in the two regions
between 2024 and this year roughly matches the size of the
entire global green steel pipeline outlined by Zhong, according
to OECD forecasts.
“Producing green steel is good, but you need to survive
first,” Yeoh Choon Kwee, deputy president at Malaysia Iron &
Steel Industry Federation told delegates.
“The focus on green steel has always been on the supply
side, but the demand reform is equally important,” he said. “The
government should also play a key role, they need to mandate the
use of green steel in key infrastructure.”
Published on June 19, 2026
