Europe Green Steel Market Size Likely to Expand at a CAGR of 63.2% By 2034

Europe Green Steel Market Size

As per the Europe Green Steel Market size analysis conducted by the CMI Team, the Europe Green Steel Market is expected to record a CAGR of 63.2% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 1.25 Billion. By 2034, the valuation is anticipated to reach USD 64.82 Billion.

Europe Green Steel Market Overview

As per the industry experts at CMI, strict government regulations aimed at reducing carbon emissions, growing consumer demand for sustainable products, advancements in production technologies for green steel, renewable energy investments, and ever-increasing pressure for carbon neutrality across industries are the main drivers of the European green steel market.

Europe Green Steel Market Growth Factors and Dynamics

• Modern Innovations: Changes in the technological aspect keep on changing how the green steel market works; its advanced hydrogen-based steel production has seen much progress alongside electric arc furnaces. The cleaner method in steel production using hydrogen instead of the traditional coal-making has turned into a development of state-of-the-art solutions, reducing CO2 emissions drastically. Quite a major part of these developments, however, is the high upfront costs to put into practice these technologies, as well as the need for high investments in the different infrastructures required. However, the promise of sustainability by using such technologies in the long term becomes limited by their capital costs; thus, these costs generally inhibit immediate scaling up. To avoid such hindrances and fast-track mass adoption, continued research, development, and government support will be the most critical aspects.

• Regulatory Pressures: The European Union’s ambitious sustainability, the Green Deal, and carbon reduction ambitions are among the main drivers for the green steel market. Therefore, companies are pushed toward greener activities by regulations like the Carbon Border Adjustment Mechanism (CBAM). While these kinds of regulations offer better incentives, they also have a cost of compliance, which might increase the operating costs of companies failing to meet the regulatory compliance standards. Changes in the regulations, for example, tighter mandates for emission reductions, will continue to influence the dynamics of the market so that more companies are encouraged to innovate and adopt low-carbon production technologies to remain competitive players in the market.

• Supply Chain Challenges: Emerging by The ever-increasing demand for green steel was a supply chain challenge, particularly in sourcing sustainable raw materials, such as hydrogen and metal scraps. Therefore, because of the great need for green hydrogen used mainly in green steel production, pressure is on hydrogen production capacity. The other challenge emerging from the constraint in the supply of sustainable raw materials and the very high cost of production also limits the scaling up of green steel production. Firms, therefore, increasingly assess partnership options in broadening their supply chain networks and investing in sourcing alternatives to meet the rapidly rising demand for such production.

• Government Incentives and Policies: Various incentives and policies have been adopted by governments across Europe to promote the introduction of green steel technologies. These include funding programs, tax incentives, and research grants aimed at reducing CO₂ emissions in the steel sector. Among others, the EU’s commitment to a carbon-neutral future by the year 2050 and the financial support granted to firms through the Green Deal are very important drivers of market growth. Thus, governments help companies reduce their carbon emissions and help put a lower financial risk on companies making the switch to greener production methods, thereby ensuring, on the whole, an enabling environment for market growth.

• Increasing Demand for Sustainable Steel: There is increasing demand for sustainable materials, especially in the sectors of automotive, construction, and energy, which is the biggest driving force behind the green steel market. Consequently, industries are urged to meet their sustainability targets and reduce carbon footprints, which encourages the adoption of green steel. This trend is especially noticeable in the automotive sector, wherein manufacturers are progressively committing to integrating low-carbon materials into automobiles to uphold regulations as well as consumer demand for sustainable products. With global demand for environmentally sustainable products on the increase, the green steel market is anticipated to grow, whereby green steel takes precedence over other options for industries intending to achieve reduced environmental impacts.

• Advancements of Technology in Production for Green Steel: Technological advances in green steel production, such as Hydrogen-based direct reduction and electric arc furnaces, remain key drivers to market growth. The methods allow a decrease in the traditional coal-based process, ultimately reducing emissions and producing steel sustainably. Innovations in carbon capture and storage technologies enable extra efficiencies in production and more sustainability for the environment. As these technologies are developed and become cost-competitive, they will present avenues for scaling green steel production. Such developments resolve environmental concerns while improving the economic case for green steel, thus contributing to long-term market growth.

Report Scope

Europe Green Steel Market SWOT Analysis

• Strengths: Strong governmental policies and regulations aimed at CO₂ emission reduction, like the European Green Deal and the Carbon Border Adjustment Mechanism (CBAM), are substantial proponents of the market for green steel in Europe. These offer considerable financial incentives and market opportunities for companies to embrace low-carbon technologies. Furthermore, such influential international companies as SSAB, Tata Steel, and H2 Green Steel are investing enormously in innovative technologies such as hydrogen-based production and making Europe a global player in green steel manufacturing. The increasing demand for greener materials within the automotive, construction, and energy sectors fortifies this market further with an increasing pool of customers. All these facts combined make it evident that the European green steel market has a very strong base, which is open for considerable growth in the years to come.

• Weaknesses: Such strengths notwithstanding, there are many challenges the green steel market must contend with; these challenges mainly revolve around the high costs of production involved in green technologies. For instance, hydrogen-based steel production needs quite a lot of infrastructure, including hydrogen production plants, which inevitably raises the overall cost. The supply of green hydrogen, in addition, is limited, which raises the cost of green steel. Again, although the market is expanding, it is still slow in adoption rates concerning green steel in different regions, in particular for the smaller companies that do not have the deep pockets for such kinds of transitions. The high costs of renewable energy, an important building block of the green steel ecosystem, also add to the challenges. These weaknesses subject financial strains and may, in the near term, slow the expansion of mainstream acceptance.

• Opportunities: This is the opportunity European green steel has. The green steel market has good opportunities for growth with increasing demand for green products. Examples of such industries are automotive, construction, and energy, all of which quickly adopt modern green steel for internal sustainable operations and external regulations, thus offering opportunities for even broader markets. And, of course, government support-still pouring in finances through subsidies, grants, or tax incentives for companies that make significant investments in decarbonization-continues to be part of the green steel drive. Various improvements in green technologies, notably hydrogen-based reduction methods and electric arc furnaces, will eventually result in reduced production costs and make green steel affordable. Economics of green steel would improve further as the costs of renewable energy fall, thus catalyzing the rapid growth of the market. Sustainability in consumer products has also been harnessed to form new entryways for green steel into several applications in the industrial field.

• Threats: Concerning the green steel market, several external threats can hinder its prospects. One major threat that the green steel industry will face is the fluctuation in energy prices, mainly the cost of renewable energy, which is required in green steel production. High energy prices create a scenario where green steel production becomes economically unviable concerning traditional methods of steel production. Regulation or policy changes that may destabilize the green steel industry’s incentive and subsidy regime provide another type of threat. Changes in the legal regime and reduced government support can be detrimental to the momentum of the markets. Also, competition posed by countries such as China and India with much weaker regulations on environmental protection could erode that advantage from Europe, as those countries could dump cheap steel into European markets, hogging companies that will always prioritize low costs of production over sustainability. Last but not least, supply chain disruptions, in particular the securing of raw materials such as hydrogen, will limit the growth and scaling requirements of green steel production.

List of the prominent players in the Europe Green Steel Market:

• SSAB
• ArcelorMittal
• Thyssenkrupp
• Tata Steel
• Salzgitter AG
• Voestalpine AG
• H2 Green Steel
• POSCO
• Hyundai Steel
• Nucor Corporation
• JSW Steel
• S. Steel
• Sweden’s SSAB (HYBRIT project)
• Luxembourg’s Aperam
• Steel Dynamics
• AMETEK Inc.
• Baowu Steel Group
• Liberty Steel Group
• Riva Group
• Severstal
• Others

The Europe Green Steel Market is segmented as follows:

By Product Type

• Flat Steel Products
• Long Steel Products
• Others

By Application

• Automotive
• Construction
• Energy
• Appliances
• Others

Regional Coverage:

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe