Green Steel Gains Momentum as Major Companies Commit to Net- Zero Emissions

Steel Industry will have to cut emissions 90 percent by 2050 to reach net-zero Emissions.

E-commerce and cloud software powerhouse Amazon and building technology company Johnson Controls are joining a corporate coalition to procure at least 1 million tons of “near-zero emissions steel” annually by 2080. As part of the Sustainable Steel Buyers Platform, this commitment is intended to foster the market for green steel which is the bone of contention in achieving net zero emissions by 2050. 

Steel is produced with a near-zero emissions carbon steel technology in which the amount of emissions generated is reduced to between 0.05 and 0.4 metric tons of carbon dioxide per ton of steel produced, contrary to an average of 1.4 to 1.85 tons. Illustrating demand for low-carbon steel as RMI estimates the Us market could reach as much as 6.7 million tons of this sustainable steel by 2030. Presently nearly 82 million tons of steel are produced by U.S. steel manufacturers each year. 

The coalition, announced on September 24, spans companies from Microsoft, Dvele, Invenergy, Nextracker, Trammell Crow addressing every industry, all pledging to green up their supply chain by incorporating green steel. Other initiatives like First Movers Coalition and SteelZero are also pushing green steel movement, through which members such as the Ford Motors and General Motors have come to pledge 10% of their steel procurement for attaining net- zero emissions steel by 2030, and SteelZero, a group of 40 companies are committed to net-zero steel sources by 2050.

Industrial Emissions and Net-zero Targets

The Steel industry, accountable for more than 7 percent of global greenhouse gas emissions related to the energy sector or about 2.6 billion metric tons, plays a vital role in the global effort to mitigate climate change. This is largely due to smelting iron ore requiring the high temperatures traditionally fuelled by coal. This percentage will have to be cut down to 90%, in order to reach net zero emissions by 2050, according to the International Energy Agency.

Innovative startups like Boston Metal, Electra and Stegra (formerly H2 Green Steel)are developing new technologies that will aid this transition, while Cleveland-cliffs has secured $500 million in federal funding to build a green hydrogen- powered plant in Ohio. Meanwhile, Rival U.S. steel after a merger with Nippon Steel, announced on September 24, 2024 that its plant in Osceola, Arkansas, has earned a certification from Responsible Steel Initiative.

Despite these progresses, infrastructure investments for green steel remain capital- intensive, with steel makers seeking assurance from buyers, especially in the automotive sector, will to pay a premium to cover the transition costs.

“European automakers have been at the forefront,” said Chathurika Gamage of RMI, Principal climate- aligned industries at RMI. The success of this transition will also depend on government incentives and regulations, such as Europe’s Carbon Border Adjustment Mechanism (CBAM), which will introduce carbon tariffs on imported steel starting in 2026.

Some other notable transitions are the HVAC equipment, a supplier Trane Technologies, part of the First Movers and SteelZero, has decided to use low-carbon steel made in electric and furnace3 for 20% of its annual purchases, reducing emissions by about 16,000 metric tons of carbon dioxide annually.

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