Opinion & Analysis

Can the cars we buy drive green steel production?

Green steel production is starting to emerge in Europe. Most steelmakers have developed decarbonisation roadmaps and announced transformational investments in green steelmaking production facilities. Some new entrants have also started construction of green steelmaking sites. These early investments tend to be supported by project-based funding, or innovation funding aimed at demonstrating new technologies. Existing early-stage innovation financing exists at Member State level as state aid, but also EU level through Horizon funding or the ETS Innovation Fund.

Scaling-up green steel manufacturing beyond pilot projects towards full commercial deployment will depend on there being sufficient demand for green steel specifically, not just steel in general.

This CEPS Explainer examines the possible enablers to leverage demand for automotive steel to become an accelerator for the decarbonisation of the entire steel sector . In short, can automotive steel become a green steel lead market, understood as a market driving early investment and deployment, with the aim of driving lower technology costs through economies of scale and learning effects.

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