Posted on 07 May 2025
The global steel industry is starting to move towards “greener” production as rules tighten and customer preferences change, Sebastian Langendorf, founder and chief executive of Meranti Green Steel, said during an industry webinar attended by Kallanish.
He explained that regulations like the EU’s Carbon Border Adjustment Mechanism (CBAM) and rising carbon taxes in Southeast Asia are pushing steelmakers to reduce emissions. For example, Singapore’s carbon tax is set to rise to $45/tonne by 2026.
This is also changing what customers want, especially in sectors like carmaking and construction, where low-carbon steel is becoming more important.
One key part of green steel is direct reduced iron, which uses cleaner fuels like natural gas or hydrogen. DRI needs high-grade iron ore with 67-68% iron content. Right now, DRI-based steelmaking only makes up a small share of global steel production, but demand is expected to grow quickly.
Scrap steel is also playing a bigger role. Around 800 million tonnes/year of steel is made from scrap, and this could rise to 1.5 billion tonnes by 2050. Still, iron ore-based steel will continue to be needed, especially in fast-growing regions like India and Africa, Langendorf highlighted.
Southeast Asia, which currently produces around 80m t/y of steel, could double its output by 2035. While most production still comes from traditional blast furnaces, signs of green steel demand are starting to appear, for example, in Thailand’s car industry and Singapore’s building sector.
“Steelmakers are starting to follow two paths,” said Langendorf. “They are preparing to supply Europe’s future demand for green steel while also slowly building local green markets in Southeast Asia. The shift has started and green steel is here to stay.”
Source:Kallanish
