Right now, there is no universal definition of green steel. It is often used as an umbrella term to describe any steel with reduced carbon emissions during production. We think only steel with the lowest possible carbon emissions should be called “green.” meaning steel produced using direct reduced iron + green hydrogen or an electric arc furnace + 100% scrap and renewable electricity to eliminate emissions as far as possible. Other steel with lower emissions is “carbon reduced.”
When will green steel be available?
Green steel from scrap and other carbon-reduced steel products are available today – especially for long steel. Green steel from green hydrogen is at the pilot stage. Commercial uptake is expected in 2024/25. Scaling up volumes will take time, as this requires a) established steel producers to change their production processes or b) new entrants using new technologies (such as H2 Green Steel) to reach industrial production size.
What quantities will be available?
Green steel from scrap and other carbon-reduced steel products can be purchased at industrial volumes from Kloeckner today. Thanks to key partnerships, we will be the first to sell >250,000 tons of green steel from hydrogen per year starting in 2025.
Will green steel be more expensive?
Studies and early pilot projects indicate that there will be a significant premium due to higher production costs and initial scarcity.
How will green steel be labelled? What does it mean for the customer process?
Right now, there is no single label or certification that allows a customer to claim that they are purchasing green steel. Some steel producers are starting to have their products certified as green, but these certifications differ and are hard to compare. We want to make this easier for customers, so we have developed a universal standard and label.
How can Kloeckner help customers drive sustainability in their steel supply chain?
We are looking to help customers in three ways: 1. We help them gain a better understanding of the changing steel landscape and what this means for their organization. 2. We will enhance transparency for them by tracking emissions for our steel products including the entire supply chain. 3. Thanks to our long-term partnerships, we secure reliable volumes of hard-to-source green steel and other carbon-reduced steel products for them even in times of scarcity.
How much carbon will green steel save?
How much green steel will save in terms of emissions depends on the starting point. Presuming an average ton of flat steel from a blast furnace as the starting point, green steel can reduce Scope 1 and 2 emissions by up to ~95%. Carbon-reduced steel from an electric arc furnace achieves a 45% reduction, while scrap-based EAF steel reduces emissions by ~75%.
Is there a minimum purchase for green steel?
We do not require a minimum purchase. But the overall market volume and the amount we can procure will be less than the demand for green steel and other carbon-reduced steel products. The earlier you contact us, the better your chances of early access and larger quantities.
Can green steel be purchased on the spot market?
In the future, green steel and other carbon-reduced steel products are likely to be attainable on spot markets. For the former, this will take years as production is scaling up and planned volumes are being pre-purchased today. For both varieties, it will be tricky in the beginning to ensure that you are actually getting what you want.
Will Kloeckner make the emissions of its steel transparent?
We are working with our suppliers to provide transparency on the emission intensity of our carbon reduced steel products. We will validate this information and pass it on to our customers. We will disclose all emissions data from cradle to gate.
What is Kloeckner doing about its own emissions?
Avoiding and reducing emissions is a top priority for us. We have set ambitious SBTi*-certified reduction targets and are actually carbon neutral ourselves today. We use high-quality, certified compensation options to achieve this. Because as far as our planet is concerned, offsetting is not the same as actual emission reductions.
*Science Based Targets initiative, the leading certification of corporate decarbonization targets. It collaborates closely with the Carbon Disclosure Project and the GHG Protocol.
