RMI and the Energy Transitions Commission Release Report Outlining Investment-Ready Options for US Steelmakers to Make the Leap to Green Steel Production
US steelmakers are poised to take the lead in the global race for green steel, as market conditions and historic federal funding opportunities converge to make clean steel production immediately cost-competitive with traditional, fossil-intensive steelmaking.
Boulder, CO – March 15, 2023
A new report prepared by clean energy nonprofit RMI (founded as Rocky Mountain Institute) for the Energy Transitions Commission finds that US steelmakers are at a historic crossroads, as aging, fossil-intensive assets reach the end of their lives and new, green hydrogen-fueled production technologies become cost-competitive after historic incentives passed in the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. US first movers stand to gain market share of a global market for green steel projected to total $15 trillion through 2050.
With several green steel project types already economically viable, the report demonstrates the feasibility of the first domestic near-zero emissions steelmaking projects to break ground within the next five years. The report’s analysis of low-emissions steel project costs was informed by input from US steel industry leaders participating in forums organized by RMI in collaboration with the Energy Transitions Commission and Breakthrough Energy.
“The United States has an opportunity to forge ahead and both decarbonize its own industry and ensure security of supply of this vital commodity,” said Adair Turner, Chair of the Energy Transitions Commission. “Seizing the moment to become a pioneer in low-emissions primary steel will require collaboration from government, industry, finance and communities working together to strengthen the investment case for breakthrough technologies and turn favorable conditions into real-world economic advantage.”
The report, Unlocking the First Wave of Breakthrough Steel Investments in the United States, details key conditions needed to secure the investment case for low-emissions steel production in the United States, including:
- Developing partnerships across the steel value chain, including with green hydrogen and iron ore producers, to focus efforts on industrial hubs and de-risk green infrastructure investment
- Ensuring industrial projects immediately and effectively use public funding opportunities, mindful that some funding sunsets as early as 2026
- Tapping into public and private funding opportunities available to sustainable investments, through routes such as ESG-focused investment funds and the US Department of Energy’s Loan Programs Office
- Securing off-take agreements for low-emissions steel, with clear timelines and tangible volumes, are central to send a strong demand signal to stimulate breakthrough low-emissions steel supply
By taking the lead in green steel, the United States stands to increase supply security of this vital commodity — as steel plays a critical role in the energy transition and domestic reshoring of supply lines. The US green steel market is expected to grow to a $30 billion market by 2050, due in part to steel needed for renewable energy buildout and the anticipated growth of domestic auto manufacturing.
“For the global steel industry to be on a 1.5°C-aligned pathway, 70 near-zero emissions primary steel mills need to be operational by 2030, according to our analysis,” said Bryan Fisher, Managing Director of the Climate-Aligned Industries program at RMI and Director of Hubs at the Mission Possible Partnership. “US steelmakers can and should lead the charge on getting these first projects off the ground.”
The US report is the second in a four-part series developed by the ETC which highlights the key actions needed by industry and government to enable a first wave of near-zero emissions ore-based steelmaking projects in some of the world’s key markets in the world. The first report, focused on the United Kingdom, was published in early February, with studies on Southern Europe and France forthcoming. The open access model used in generating the analysis across all regions in this series is also available to be downloaded and used for those looking to run additional sensitivities beyond those provided in each report.
“The report and model are coming at the perfect time to inform the type of transformative, near-zero steel projects the US Department of Energy can support through its new Industrial Demonstrations Program”, said Robin Millican, Senior Director of U.S. Policy and Advocacy at Breakthrough Energy. “As one of the highest and best uses of clean hydrogen for decarbonization, green steel production will create demand to meet the hydrogen supply incentivized in IIJA and IRA. RMI’s analysis demonstrates the power of these combined policies to accelerate the first final investment decision for a U.S. near-zero steel plant.”
Media Inquiries please contact:
Alexandra Jardine Wall, Strategic Communications Manager, Climate-Aligned Industries, RMI. Email: email@example.com
RMI, founded as Rocky Mountain Institute, is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C future and secure a clean, prosperous, zero-carbon future for all. We work in the world’s most critical geographies and engage businesses, policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50 percent by 2030. RMI has offices in Basalt and Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing. More information on RMI can be found at www.rmi.org or follow us on Twitter @RockyMtnInst.
About the Energy Transitions Commission
The Energy Transitions Commission (ETC) is a global coalition of leaders from across the energy landscape committed to achieving net-zero emissions by mid-century, in line with the Paris climate objective of limiting global warming to well below 2°C and ideally to 1.5°C. Our Commissioners come from a range of organizations – energy producers, energy-intensive industries, technology providers, finance players and environmental NGOs – which operate across developed and developing countries and play different roles in the energy transition. This diversity of viewpoints informs our work: our analyses are developed with a systems perspective through extensive exchanges with experts and practitioners.