Despite numerous declarations, no one wants green steel — at least not at the current prices. German researchers from the Hans Böckler Foundation have calculated the conditions under which low-emission steel could become economically viable for buyers and producers.
According to a report cited by Eurometal, prices for flat products made from green steel are currently 170–200 euros per tonne higher than conventional steel, and in some cases the premium reaches 300 euros. In early July, the real price difference observed on the Northern European market ranged between 120 and 200 euros per tonne, as reported by Fastmarkets.
Such a gap scares off potential buyers. In the automotive industry, for instance, green steel accounts for only a single-digit percentage of total steel purchases. While regulators increasingly scrutinise the carbon footprint of vehicles, the construction sector — the largest steel consumer — appears far less sensitive to the steel’s origin or emission intensity.
High costs of hydrogen and electricity
The real reduction of the carbon footprint of primary steel made from iron ore requires direct reduction (DRI) using green hydrogen. Here again the cost issue arises. According to the Central European Gas Hub, green hydrogen prices currently range from 130 to 190 euros per MWh.
The study’s authors state: – The profitability of producing in DRI installations with green hydrogen requires a stable price of this fuel at 140 euros per MWh until 2035 – said the researchers. They also estimated that the cost of electricity would need to be kept at 60 euros per MWh over the same period. The researchers assume discounts of 10 euros per MWh for electricity and 20 euros per MWh for hydrogen for some industrial customers.
State intervention and local content
The report recommends targeted investment support. Direct subsidies or low-interest loans should cover up to 50 percent of the total investment for steel companies. Additional bonuses are proposed for companies with collective bargaining agreements. The state, whether at the Land or federal level, should take equity stakes in strategically important steel enterprises to lower capital costs and secure long-term transformation perspectives.
On the demand side, the authors suggest preferential treatment of local producers in public procurement, applying the local content principle. The report projects that EU steel demand will reach 160–180 million tonnes by 2050, meaning Germany alone would need to produce 40 million tonnes of climate-friendly steel annually — half primary, half secondary. Currently, about 15 million tonnes of secondary (scrap-based) capacity is available, covering 75 percent of the needed secondary output, while primary green steel capacity remains mostly at the planning stage, with only 8 million tonnes in announced projects.
Źródło: WNP.PL, Fot. PTWP
