Europe’s Green Steel Demand Stifled by High Premiums and Lack of Consumer Incentives

Demand for Green Steel in Europe Faces Challenges

Demand for green steel in Europe is low. High premiums and a lack of government projects limit purchases. There are few incentives for consumers to switch to these products, as reported by Fastmarkets.

Many companies struggle in a tough market, making low-carbon steel hard to obtain. Recently, fewer buyers are willing to pay extra for green steel. This reduced interest comes as steel production falls, lowering overall demand. Current premiums for green steel remain stable at €100-200 per tonne.

The European Steel Association (EUROFER) recently published the EU Action Plan for the steel industry. The plan recommends a coordinated approach to support steel producers during the green transition. It suggests that public procurement and auctions should drive demand for low-carbon steel. The industry should also develop a labeling system as a standard for these products.

Incentives for using green steel in major sectors like automotive and construction are also proposed. The report stresses the need for member states and the EU to create markets that boost demand for clean steel made in Europe.

The automotive industry could lead as a market for low-carbon steel in Europe. A study by Transport & Environment states that green steel produced with hydrogen and electric arc furnaces could cut carbon emissions from car production by 6.9 million tons by 2030.