Despite numerous declarations, no one wants green steel – at least not at current prices. German researchers have calculated what costs would have to be to make green steel marketable, revealing that a premium of up to 300 euros per tonne still blocks demand in key sectors like automotive.
A study funded by the Hans Böckler Foundation and reported by Eurometal examined the conditions under which green steel production could become economically viable in Germany and Europe while maintaining industrial competitiveness. According to the authors, flat products from green steel are currently offered at 170–200 euros per tonne more than conventional steel, and in some extreme cases the difference reaches 300 euros. Real transaction prices in Northern Europe, as reported by Fastmarkets in early July, show a spread of 120–200 euros per tonne.
This price gap severely limits adoption. In the automotive industry, one of the potential primary customers for green steel, its share in total purchases remains in single digits. Regulators focus on the carbon footprint of vehicles, but for construction – the largest steel consumer – the pressure is weaker. Automotive-grade sheet metal typically comes from primary production using iron ore, which generates the highest emissions, while rebar and structural steel are often made from scrap in electric arc furnaces. If those furnaces use green electricity, their carbon footprint is already much lower.
The cost barrier and hydrogen economics
Real emission reductions for steel from iron ore require direct reduction using green hydrogen. Here, price is again the issue. According to the Central European Gas Hub, green hydrogen currently costs between 130 and 190 euros per MWh. The report states that profitability of DRI plants using green hydrogen would require a stable hydrogen price of around 140 euros per MWh until 2035, combined with electricity costs at a constant 60 euros per MWh.
– Green steel is currently 170–200 euros per tonne more expensive than conventional steel, and in extreme cases up to 300 euros – said the researchers from the study funded by the Hans Böckler Foundation. The authors note that hydrogen is extremely sensitive to electricity price fluctuations; the energy price spike in 2022 directly pushed up hydrogen costs. They also propose discounts for industrial users: 10 euros per MWh for electricity and 20 euros per MWh for hydrogen.
Support measures to bridge the gap
The report outlines targeted investment support. For steel companies, direct subsidies or low-interest loans should cover up to 50% of total investment, with additional premiums for firms with collective bargaining agreements. Public participation is also recommended – the state, at either the federal or state level, should take equity stakes in strategically important steel companies to lower capital costs and secure a long-term transformation perspective.
Demand-side measures include favoring local producers in government procurement through a local content principle. The authors estimate that by 2050, EU demand for steel will reach 160–180 million tonnes annually. Germany alone would need to produce 40 million tonnes of climate-friendly steel per year – half primary, half secondary. Currently, only 15 million tonnes of secondary steel capacity is available (75% of the target), while primary green steel projects are mostly plans, barely reaching 8 million tonnes.
Źródło: wnp.pl, Fot. PTWP
