Home » Green Steel: Gaining Global Momentum, UAE Registering Progress

Green Steel: Gaining Global Momentum, UAE Registering Progress

by Mohammad Ghazal

The global construction market is likely to see a significant shift over the coming years, underpinned by the rise of sustainability priorities and decarbonisation agendas. This will drive a change in the types of projects that are demanded and the construction methods undertaken. It will also result in the increased use of lower-carbon construction materials, such as ‘green steel’ and ‘green cement’, in projects.

Construction materials like steel are major contributors to carbon dioxide emissions due to their energy-intensive production processes, according to the International Energy Agency. The steel and iron ore sector accounts for an estimated 7% of global emissions from energy use. As such, manufacturers are under mounting pressure to curb their environmental footprint. In the near future, these industries are expected to be a focal point of environmental regulations, as governments strive to attain decarbonisation targets. For example, in March 2022, the EU updated the Construction Products Regulation to enhance the regulatory framework for environmental sustainability and climate goals related to construction products.

The growing interest in more environmentally sustainable materials among both building material manufacturers and end-users is expected to drive sustained investment in the low-carbon steel sector in the years ahead.

Technology adoption is facilitating ‘green steel’ production

‘Green’ steel describes the manufacturing of steel without the use of fossil fuels, and while it is still an industry in its primacy, it is gaining global traction. The integration of electric blast furnaces and hydrogen technology, and the adoption of various best practices such as the use of pulverised coal injection or natural gas to reduce coke rates, are among the various initiatives that are being implemented to reduce emissions output from steel production.

The use of hydrogen in particular is growing in prominence amongst steelmakers. Major global steel player such as Tata Steel, Emirates Steel Arkan, Thyssenkrupp and Vale are targeting electrolysis capacity installations and actively developing plans to adopt green hydrogen and ‘green steel’ strategies. Hydrogen-based steel production involves using hydrogen as the primary feedstock to reduce iron ore to direct reduced iron (DRI), which is then used in an electric arc furnace. This method eliminates the use of coal in the DRI production stage and enables the use of renewable energy sources to power the production process, offering a possibility of producing emission-free steel.

The UAE standing out from the crowd

Developments in the UAE’s steel sector over the last year have highlighted the growing potential of low carbon steel production in the country and the UAE’s rising prominence in the global green steel market. Most notably, Emirates Steel Arkan is spearheading efforts to decarbonise the UAE steel sector. The company announced it is set to partner with The Abu Dhabi National Energy Company (TAQA) to jointly develop a large-scale green hydrogen project that will enable Emirates Steel Arkan to produce green, low-carbon steel and low carbon steel sheet piles. Emirates Steel Arkan aims to solidify its leading position in driving the industry towards net-zero emissions, as part of the UAE’s strategic efforts to attain climate neutrality by 2050.

Looking elsewhere in the GCC region, it was announced in November 2022 that Brazil-headquartered Vale signed three MoUs to study the feasibility of establishing mega industrial complexes to produce low carbon steel products in the region. Besides signing an agreement with Emirates Steel Arkan for a hub at Khalifa Economic Zone Abu Dhabi (KEZAD), Vale signed MoUs with Saudi Arabia’s National Industrial Development Centre for a hub at Ras Al Khair Industrial City and the Ministry of Commerce, Industry and Investment Promotion of the Sultanate of Oman for a hub at Duqm Special Economic Zone in Oman. This initiative contributes to Vale’s commitment to reduce 15% of net scope 3 emissions by 2035.

Green steel development galvanised by COP27 and COP28

The prospects for green steel globally have been boosted by COP27, following discussions between governments and industry stakeholders on how to tackle emissions from the sector. For example, an international group of steelmakers, including Nucor, CELSA Group, Steel Dynamics Inc (SDI), Commercial Metals Company and the Institute of Scrap Recycling Industries announced the formation of the Global Steel Climate Council (GSCC) on November 17 2022. The coalition intends to hasten the shift to green steel among its members by promoting collaboration and advocating for a global standard to accomplish this goal. Furthermore, under the ‘Breakthrough Agenda’  governments from countries representing more than 50% of global GDP set out sector-specific ‘Priority Actions’ to decarbonise five high-emitting sectors, among them the steel sector. As part of the agenda, the governments have launched a package of 25 new collaborative actions to be delivered by COP28 to accelerate the decarbonisation process.

Pressure to achieve results and present progress by COP28 in November in the UAE is likely to fuel advancement in the green steel sector over the coming year, as private and public partnerships collaborate to expedite the transition to decarbonise the global steel sector. Furthermore, the UAE’s domestic green steel sector will also likely receive a boost from COP28 as the host nation looks to promote itself as a global leader in sustainability and decarbonisation.

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