Industry Decarbonisation | History of Hydrogen Steelmaking

Hydrogen Steelmaking Evolution

Steel production accounts for approximately 7% of global greenhouse gas emissions, making decarbonisation of the industry critical for meeting international climate goals. Since 2004, when the European ULCOS project was launched, the steel industry has gradually developed technologies to reduce its carbon footprint, with hydrogen-based processes emerging as a promising pathway to near-zero emissions steelmaking.

This timeline documents the evolution of steel industry decarbonisation efforts, from early carbon capture projects to the current wave of hydrogen-based direct reduction technologies. Major initiatives such as HYBRIT, SALCOS and H2 Green Steel are transforming production methods by replacing coal and coke with green hydrogen, while traditional steelmakers invest billions in retrofitting existing facilities. These innovations represent a fundamental shift in an industry that has relied on carbon-intensive blast furnace technology for centuries.

The record through to 2026 divides into two phases. The first, running from ULCOS in 2004 to roughly 2023, was largely a question of technical feasibility: could iron be reduced with hydrogen at industrial scale? The second, which 2026 has brought sharply into focus, is a question of commercial viability – who pays for it, and on what policy architecture. See our analysis of why green steel timelines keep slipping.

2004: European steel industry launches ULCOS Project.
2005: European Emissions Trading Scheme (ETS) launched as pillar of EU energy policy.
2006: ULCORED process is designed by a team led by LKAB, Voest-alpine and MEFOS.
2008: Commencement of Phase 2 of EU Emissions Trading Scheme.
2010: Tata Steel builds €20m ULCOS HIsarna pilot plant at IJmuiden.
2012: ArcelorMittal withdraws from ULCOS CCS project at Florange, citing technical difficulties.
2013: Commencement of Phase 3 of ETS.
2015: Paris Agreement on climate change and CO₂ targets is adopted by 196 parties.
2016: The HYBRIT initiative is launched in spring 2016.
2016: Abu Dhabi starts up world's first commercial steel carbon capture project.
2017: Cancellation of ROAD CCS project in Rotterdam.
2017: Construction of Kemper County Energy carbon capture facility is abandoned.
2018: Start-up of world's first waste gas to ethanol plant.
2019: Thyssenkrupp Stahl starts trials with blast furnace hydrogen injection.
2019: ArcelorMittal signs agreement with Midrex to build pilot hydrogen-only DRI plant in Hamburg.
2019: Salzgitter Flachstahl GmbH (SZFG) awards electrolysis plant contract to Siemens Gas and Power.
2020: Anglo moves to decarbonised mining with hydrogen truck project.
2020: HYBRIT commissions bio-oil plant at LKAB's Malmberget works.
2020: HYBRIT receives financial support from Swedish Energy Agency.
2020: European Investment Bank provides support to Steelanol project through €75m loan.
2020: Fortescue invests in hydrogen coaches at Christmas Creek.
2020: Ovako successfully uses hydrogen in Hofors reheat furnaces.
2020: Construction completed of SIDERWIN pilot plant building at Metz, France.
2020: BHP and China Baowu form carbon capture and storage JV.
2021: Start of Emissions Trading Scheme, Phase 4.
2021: Tenaris invests in hydrogen steelmaking in Italy.
2021: Voestalpine invests in new 250 kt hydrogen-based pilot DRI plant in Austria.
2021: IOC joins forces with SHS and Paul Wurth to explore production of low emissions HBI.
2021: Liberty signs MoU with Paul Wurth & Stahl-Holding-Saar for H₂ steelmaking trials.
2021: H2GS signals plans to build greenfield hydrogen steelmaking facility in Boden, near Luleå (5 Mt capacity by 2030).
2021: Outokumpu joins TOCANEM to support carbon neutrality.
2021: SSAB, LKAB and Vattenfall commence construction of H₂ storage rock cavern.
2021: Volvo, SSAB collaborate on first vehicles made of fossil-free steel.
2021: Hybrit pilot plant successfully produces ~100 tonnes of hydrogen-reduced sponge iron.
2022: Voestalpine studies use of hydrogen plasma for green steel production.
2022: Shanghai University team completes development test of blast furnace smelting with pure hydrogen.
2022: Anglo American unveils prototype of the world's largest hydrogen-powered mine haul truck.
2022: Rio Tinto signs MOU with Salzgitter to develop carbon-free SALCOS steelmaking.
2022: Hitachi signs MoU with H2GS for green steel collaboration, including electrolyser construction.
2022: Tata Steel threatens to close down UK steelmaking unless given £1.5bn in Aid.
2022: BMW Group signs agreement with H2GS for green steel supply.
2023: SSAB started first fossil-free steel production using HYBRIT technology.
2023: H2 Green Steel secured €3.5bn financing for Boden plant.
2023: ArcelorMittal announces plans for hydrogen-ready DRI plant in Bremen.
2023: Thyssenkrupp launches direct reduction test facility in Duisburg.
2023: Salzgitter receives approval for SALCOS programme implementation.
2023: Ovako commissioned hydrogen heating technology for steel production.
2024: ArcelorMittal Poland investing in hydrogen facility in Kraków.
2024: BHP and Rio Tinto developing low-carbon iron pilot plant.
2024: Stegra signs power agreement for green hydrogen-based steel plant.
2024: European steelmakers urge mandatory green steel quotas for cars.
2025: Hybrit completes hydrogen storage pilot for green steel production.
2025: Metinvest partners with Danieli for green steel production in Piombino.
2025: Salzgitter begins construction of 100 MW hydrogen plant.
2025: Blastr completes financing for European low-CO2 steel production.
2025: EU works on 'Green Action Plan' for clean steel viability.
2025: ArcelorMittal cancels German EAF-DRI decarbonisation project.
2025: Salzgitter postpones SALCOS stages 2 and 3 by three years.
2025: Financial crisis emerges as Stegra seeks €975m emergency funding.
2026: EU CBAM enters its definitive regime on 1 January.
2026: ArcelorMittal commits €1.3bn to a new EAF at Dunkirk.
2026: European Commission proposes the Industrial Accelerator Act on 4 March.
2026: UK Government formally adopts its new Steel Strategy.
2026: Stegra secures a further €1.4bn of financing for the Boden plant.
2026: SSAB moves fossil-free steel into commercial sale.
2026: China resumes capacity-replacement rules and extends its national ETS to steel.
2026: Thyssenkrupp hydrogen procurement difficulties expose the green premium gap.
2026: LKAB receives environmental permit for HYBRIT demonstration plant at Malmberget, Gällivare.
2026: Hydnum Steel secures €60m PERTE funding for its Puertollano green steel plant.
2026: Nippon Steel approves €0.9bn EAF at U.S. Steel Košice.
2026: Tata Steel and Dutch government extend IJmuiden green steel letter of intent to March 2027.
2026: Stegra seeks further capital and appoints a new CEO.
2026: SSAB permanently shuts the Oxelösund blast furnace ahead of EAF start-up.
2026: H₂-DRI start-ups slip to 2027 and beyond, while scrap-based EAF conversions take the lead.

Notes

2004: ULCOS denotes ultra low CO₂ steelmaking. Initial ULCOS aim was to reduce steelmaking CO₂ emissions by 50% by 2050. Some 47 partners across 15 European countries were involved in the ULCOS launch.
2005: Phase 1 of the ETS during 2005–2007 was essentially a 3-year pilot programme that helped to establish a carbon price; and set up an infrastructure in order to monitor, report and verify emissions from the relevant businesses.
2006: The ULCORED process produces DRI (direct reduced iron) in a shaft furnace, either from natural gas or from reducing gas obtained by gasification of coal, using 100% O2. Offgas from the shaft is recycled after the capture of the CO₂ (which can then be stored).
2008: Phase 2 of the ETS took place over the period 2008–2012. During this period, concrete emission reduction targets were set, and trading in emissions allowances was allowed to develop. The aviation sector was brought into the EU ETS on 1 January 2012.
2010: HIsarna is a converter-based iron-making technology that directly converts iron ore and coal into iron (without raw material pre-treatment). HIsarna reduces CO₂ emissions by ~20% compared to conventional ironmaking; and by up to 70% if used in conjunction with CCS.
2012: ArcelorMittal's withdrawal, as project Sponsor, from the ULCOS CCS project at Florange was ostensibly due to insurmountable technical challenges. The European Investment Bank had however subjected this and other ULCOS projects to a detailed technical and financial due diligence assessment some months previously, using blue-chip engineering consultancies for these evaluations. Notwithstanding ArcelorMittal's comments, these consultancies had deemed the CCS (and other ULCOS projects) to be sound.
2013: Phase 3 of the ETS took place between 2013–2020. During this period, a single EU-wide cap on emissions was introduced instead of the previous system of national emission allocations. Auctioning also became the default method for allocating allowances (instead of free allocation).
2015: Paris Agreement, agreed at COP21, is a legally binding international treaty on climate change that entered into force on 4 November 2016. Its goal is to limit global warming to well below 2, preferably to 1.5°C, compared to pre-industrial levels.
2016: HYBRIT (an acronym for Hydrogen Breakthrough Ironmaking Technology) is a joint venture owned by the steel manufacturer SSAB, the mining company LKAB and the energy company Vattenfall. Its aim is the development of fossil-free ore-based steel manufacturing (using fossil-free electricity and hydrogen instead of coke and coal in steel production) with the target of having an operational industrial process in place by 2035.
2016: The Al Reyadah carbon-capture project (an Adnoc and Masdar joint venture) took 4 years to complete. Some 800,000 tonnes a year of carbon dioxide is taken from Emirates Steel's manufacturing plants in Abu Dhabi and transferred to the Al Reyadah plant for compression and dehydration. Gas is then exported through a buried pipeline for storage within Adnoc's NEB and Bab onshore oilfields.
2017: ROAD (which denotes Rotterdam Opslag en Afvang Demonstratieproject) was a demonstration project focusing on the capture of carbon dioxide at one of the coal-fired plants in Rotterdam and its storage in an empty gas field in the North Sea seabed. The project ran from 2009 to 2017 and was a joint project of Uniper (formerly E.ON) and Engie (formerly Electrabel and GDF Suez), and was financed by the European Commission, the Dutch Government and the Port of Rotterdam amongst others. A collapse in the carbon price undermined the original business case ultimately leading to the project's failure.
2017: Kemper County Energy Facility is an electricity generating plant based in Kemper County, Mississippi, USA. Its construction started in 2010, with initial plans for power generation being based on the use of locally-mined brown coal (lignite) as well as carbon capture and storage. As the project progressed, capital investment costs rose from US$2.4bn in 2014 to over US$7.5bn by 2017. In mid-2017, Mississippi Power announced that the power plant would switch to use of natural gas. Investment in the Kemper Project CCS facility was abandoned at that point.
2018: Carbon recycling firm LanzaTech and its joint venture partner Shougang Group announced the successful start-up of the world’s first commercial facility converting industrial carbon monoxide-containing waste gases to ethanol. The facility, located at the Jingtang Steel Mill in Hebei Province, began operations in May 2018 and produces 16 million gallons of ethanol per year in an anaerobic fermentation reaction.
2019: Thyssenkrupp Stahl trials involved injection of hydrogen into one of the 28 tuyeres on blast furnace 9 at the Duisburg-Hamborn site on 11 November 2019.
2019: ArcelorMittal Hamburg plant will have a DRI production capacity of 100 kt/yr.
2019: Salzgitter steelmaking electrolysis plant is a 2.2 megawatt PEM facility (PEM = Proton Exchange Membrane) and is due to commence operation in the Q4 2020. Requisite electrical power will be generated by seven wind turbines with a capacity of 30 megawatt. Salzgitter project for greater use of hydrogen in steelmaking operations, jointly undertaken with the Fraunhofer Institute, is called SALCOS^®.
2020: Ovako trial undertaken in collaboration with Linde, heating the steel to 1,200°C with hydrogen rather than LPG at the Hofors steel rolling mill in Sweden.
2020: SIDERWIN technology is based on reduction of iron ore by low-temperature electrolysis [electrowinning]. ArcelorMittal is the main Sponsor of the Siderwin project, which is supported by €7m of funding from the EU Horizon 2020 Programme. In 2021, the Siderwin technology will be further evaluated at the engineering-scale pilot plant at Metz. The SIDERWIN process is actually based on ULCOWIN technology, developed since 2004 under ULCOS. ULCOWIN is a low-temperature electrolysis process that produces solid state elemental iron from iron ore. Hematite (Fe₂O₃) particles are suspended in an alkaline electrolyte solution at about 100–110°C. An electrical current is passed through the solution, from anode to cathode. Oxygen particles are attracted to the anode, and are released at the surface of the solution, and elemental iron forms crystals on the surface of the cathode. This iron is then fed into an electric arc furnace (EAF) with a small amount of coke or other carbon source to make crude liquid steel.
2020: HYBRIT pilot plant for hydrogen direct reduction of iron ore starts operation in Luleå on 31 August. Construction of a storage facility for hydrogen fuel at the HYBRIT pilot plant was a notable element in the total construction cost.
2020: ENGIE is providing the renewable hydrogen solution for Anglo American, which involves supply of hydrogen from the Nel Hydrogen Electrolyser AS for use in Anglo's fleet of haul trucks at its Mogalakwena mine.
2020: Steelanol consortium comprises ArcelorMittal, LanzaTech, Primetals and E4tech. Using LanzaTech's fermentation technology, this group is to construct an industrial-scale demonstration plant for the production of ethanol from blast furnace gas at ArcelorMittal's steel-making site in Ghent, Belgium.
2020: Fortescue coach project centres a US$32m agreement with BOC to establish a renewable hydrogen supply at the Christmas Creek iron ore mine in Western Australia. Investment in hydrogen production and refuelling infrastructure will be for a fleet of hydrogen coaches that transports workers from their base camp to the mine.
2020: LKAB reported that use of biofuel as a heat source for one of its pelletising plants at Malmberget reduced carbon emissions by as much as 40%.
2020: BHP joint venture with Baowu Steel Group involves US$35m investment to investigate carbon capture, use and storage at one of Baowu's Chinese blast furnaces.
2021: Phase 4 of the European Emissions Trading Scheme is expected to run between 2021–2030. Its aim is to ensure implementation by 2030 of targeted EU greenhouse gas emission reductions. To increase the pace of emission cuts, the overall number of emission allowances will decline each year during Phase 4. Note that in order to achieve the EU's overall greenhouse gas emissions reduction target for 2030, the sectors covered by the EU ETS must reduce their emissions by 43% compared to 2005 levels.
2021: Tenaris plan, being jointly developed with Italian energy suppliers Edison and SNAM, is to increase use of hydrogen in EAF steelmaking at the Dalmine seamless tube plant in Italy.
2021: Voestalpine pilot DRI facility is being built by Mitsubishi Heavy Industries.
2021: IOC investigation into the potential for industrial scale low-carbon iron production in Canada is scheduled for completion in late 2021, with an investment decision on a hydrogen-based direct reduction iron (DRI) plant at industrial scale expected to follow. Iron Ore Company of Canada (IOC) will supply high-grade iron ores and expertise in mining, processing and pelletising. Note that Rio Tinto owns 58.7% of IOC, with Mitsubishi Corp. and Labrador Iron Ore Royalty Corp. holding the rest. Paul Wurth has process knowledge in the field of highly efficient hydrogen generation. SHS group, which owns Europe-based Dillinger and Saarstahl, brings iron and steel making expertise.
2021: Liberty's pan-European partnership will work on construction of a two million tonne / year Direct Reduced Iron (DRI) plant with an integrated 1 GW capacity hydrogen electrolysis production unit based in Dunkerque, France. The DRI facility will initially use a mix of hydrogen and natural gas as the reductant to produce DRI and hot-briquetted iron (HBI). It will transition to use of 100% hydrogen once the electrolysis production unit is fully operational. The DRI will primarily be used in Liberty's Ascoval electric arc furnace in France.
2021: H2GS project in Boden, near Luleå (northern Sweden) is to produce hot and cold rolled coil, as well as galvanised sheet. Power is to be sourced from hydroelectric facilities in the area, as well as from wind farms. Construction is expected to start by mid-2022, with 2.5 Mt/yr of HRC and CRC capacity in place by 2026 and final capacity to be close to 5 million tonnes. Total capex cost is estimated at US$3.04bn.
2021: TOCANEM denotes 'Towards Carbon Neutral Metals'. It is a three year research programme involving a consortium of multiple metal industry companies. The project is geared to enable a shift to carbon neutral metal production in Finland.
2021: SSAB, LKAB and Vattenfall hydrogen storage facility in Svartöberget is to be located next to the investors' pilot HYBRIT facility in Luleå, Sweden. The cavern will have a storage volume of 100 cubic metres; will be located 30 metres underground; and its walls will be covered with a carefully selected material as a sealing layer (to ensure cost-effective storage under pressure).
2021: Volvo will start manufacturing the first concept vehicles and machines with hydrogen steel from SSAB in 2021. Plans are for small-scale serial production to start during 2022 and for a gradual escalation towards mass production to follow.
2021: The June 2021 technological breakthrough at HYBRIT in the production of DRI used hydrogen generated by electrolysis of water with fossil-free electricity.
2022: Voest Alpine hydrogen plasma research is to be undertaken at a new pilot facility at the firm's Donawitz site in southern Austria.
2022: Hitachi / H2GS MoU is based on three pillars 1) Hitachi Energy's equity investment in H2 Green Steel 2) Support from Hitachi Energy in order to construct and improve the electrical infrastructure to power steel production – including a large-scale electrolyser plant 3) Boden green steel to then be used in the manufacturing of Hitachi Energy’s products, once H2 Green Steel commences production.
2022: Rio Tinto / Salzgitter project is intended to jointly study the use of Rio's Canadian and Australian iron ores for Salzgitter's SALCOS green steel smelting project in Germany.
2023: H2GS signed debt agreements with commercial banks BNP Paribas, ING, UniCredit, Société Générale and KfW IPEX-Bank, as well as with the Swedish Export Credit Corporation.
2023: The contract for the engineering, delivery and construction of the hydrogen-powered direct reduction plant, including two innovative smelters and associated auxiliary units at Duisburg was placed with SMS.
2023: The Hofors facility in Sweden becomes the world's first plant to use hydrogen gas in a reheat furnace, for the reheating of steel prior to rolling.
2023: Linde Gaz Polska, in cooperation with ArcelorMittal Poland, is to build the Krakow hydrogen production plant. The new facility will supply process gas to two galvanising plants.
2024: BHP / Rio initiative will develop technology to enable the use of Pilbara iron ore to produce iron without the need for a traditional blast furnace.
2024: Stegra long-term power purchase agreement (PPA) was signed with Uniper. It secures Stegra a supply of electricity over the 6-year period 2027–2032, for large scale production of green hydrogen, green iron and green steel.
2024: Mandatory automotive 'EU 'green steel' quotas idea put forward by coalition of steelmakers, hydrogen producers and the think-tank T&E. According to one T&E suggestion, at least 40% of steel in new cars should be required to be green by 2030, rising to 75% in 2035 and 100% in 2040.
2025: Swedish Energy Agency reported that large-scale storage of fossil-free hydrogen gas had been successfully proven. This test was completed at a 100 m³ hydrogen storage facility built in a steel-lined rock cavern in Svartöberget, located adjacent to the DR pilot for sponge iron production in Luleå, Sweden.
2025: Metinvest / Danieli agreement is for the construction of a 2.7 Mt/yr green steel plant in Piombino, Italy. The new plant will use electric arc furnace technology and recycled materials, including scrap, pig iron and direct reduced iron.
2025: Andritz was selected to build the 100 MW electrolysis plant at the Salzgitter Flachstahl GmbH site on an EPC basis.
2025: New Blastr financing round includes three new investors: Aurora Infrastructure / Onvest Oy / Security Trading Oy. Proceeds of the financing are to be used to progress construction of Blastr's steel plant in Inkoo, Finland, and to further develop Blastr's 6 Mt/yr DR pellet plant.
2025: The focus of the EU Action Plan is to restore steel's competitiveness, to facilitate the green transition as well as to protect steelworkers’ jobs across Europe.
2025: ArcelorMittal cancelled the EAF-DRI project aimed at decarbonising its plants in Bremen and Eisenhüttenstadt in June 2025. The agreement with the German government included €1.3bn in state aid and required construction to begin by June 2025. The company cited challenging market conditions, high electricity prices compared to international competitors and the lack of economic viability for green steel production.
2025: In September 2025 Salzgitter postponed stages 2 and 3 of its SALCOS programme by three years, citing economic and regulatory headwinds. Stage 1 continues.
2025: In Q4 2025 Stegra was reported to be seeking up to €975m (US$1.1bn) in new financing, as cost overruns mounted and government grants were delayed. Creditors engaged financial advisers, and construction slowed for several months while new capital was sought.
2026: From 1 January 2026, EU importers of iron and steel became subject to the full CBAM regime, including the purchase and surrender of certificates covering embedded emissions. The transitional reporting-only phase is over. This is arguably the most consequential regulatory development of the year for the sector, because it converts the carbon intensity of imported steel from a reporting obligation into a direct cost, and therefore into a factor in landed-cost calculations and sourcing decisions.
2026: ArcelorMittal confirmed the €1.3bn Dunkirk EAF investment on 10 February, with start-up expected in 2029 and a substantial emissions reduction against the incumbent BF/BOF route. Its significance lies in the reversal: the same company had cancelled its German EAF-DRI programme only eight months earlier (see 2025 above). Electrification is proceeding where the power economics and the state aid package work, and stalling where they do not.
2026: The Industrial Accelerator Act, proposed by the European Commission on 4 March, ties industrial competitiveness explicitly to decarbonisation. It provides for faster permitting and for measures intended to stimulate demand for low-carbon products. The shift of emphasis matters as much as the content: European policy is moving from carbon pricing alone toward industrial policy that includes a demand-side lever, which is the element the first wave of decarbonisation projects most conspicuously lacked.
2026: The UK Steel Strategy, adopted in March 2026, places decarbonisation at the centre of national industrial policy and includes support for EAF production at Port Talbot. With Tata's transformation, Port Talbot becomes one of the larger European worked examples of a BF-to-EAF transition at an integrated coastal site.
2026: Stegra's financing round across April and June 2026 raised a further €1.4bn, led by Wallenberg Investments, to complete the hydrogen-DRI/EAF plant at Boden. The project is sized at roughly 2.5 million tonnes per year, which would make it among the largest genuinely hydrogen-based primary steel projects anywhere. Note the contrast with the €975m emergency raise sought in late 2025 (see above): the capital has so far been found, but the cost of reaching commercial operation has repeatedly exceeded the estimate (see September 2026 below).
2026: SSAB began commercial sales of fossil-free steel during 2026 while its Swedish production transformation continued. The Luleå conversion alone represents approximately €4.5bn of investment, replacing conventional production with electric steelmaking. This is one of the first instances of ultra-low-carbon steel moving from demonstration volumes into ordinary commercial supply.
2026: China reintroduced capacity-replacement rules after an extended suspension and continued extending its national ETS to cover steel. Given the scale of Chinese output, the framework matters disproportionately: replacement capacity is now steered toward lower-emission and EAF routes rather than further conventional BF additions.
2026: Thyssenkrupp's difficulties securing hydrogen on viable terms are the clearest single illustration of the year's central problem. High electricity and hydrogen costs, weak European demand and limited customer willingness to pay a green premium have caused projects across the region to be delayed, downsized or reconsidered. The question has moved from whether green steel can be built to who funds the gap between its cost and its market price. In August 2026 the European Commission approved an amendment to the state aid for Thyssenkrupp's 2.5 Mt/yr Duisburg DRI plant (around two-thirds of its ~€3bn cost) so that the plant can start operation without hydrogen.
2026: On 15 June 2026 the Land and Environment Court in Umeå approved LKAB's plans for a fossil-free sponge iron plant at Malmberget, Gällivare – the HYBRIT demonstration plant, sized at up to 1.5 Mt/yr. The ruling can be appealed and no investment decision has yet been taken. Estimated cost has risen from over SEK 20 billion (2023) to SEK 31–33 billion, and the supporting 60 km power line has been delayed by permitting; LKAB targets operation in 2029. Sweden's National Audit Office observed in 2025 that profitability is "far from certain".
2026: Hydnum Steel formally secured €60m under Spain's PERTE programme in July 2026 for a 1.5 Mt/yr flat steel plant at Puertollano, Castilla-La Mancha, to run on fossil-free power and progressively on green hydrogen. A further €150m commitment comes from the state co-investment fund FOCO, managed by COFIDES. Construction is expected to begin in early 2027. With ArcelorMittal's hydrogen DRI plans at Gijón suspended since November 2024, Hydnum is now Spain's principal greenfield green steel initiative.
2026: On 16 September 2026 Nippon Steel approved a €0.9bn investment at U.S. Steel Košice in Slovakia: a 1.6 Mt/yr EAF due to start in 2030 and an air separation unit due in 2029, supported by up to €350m from the EU Modernisation Fund. The EAF will operate alongside the existing blast furnaces rather than replace them – a smaller scope than earlier plans to replace two blast furnaces, and an indication that Central European decarbonisation is proceeding incrementally.
2026: On 25 September 2026 Tata Steel, the Dutch government and the Province of North Holland extended their non-binding Joint Letter of Intent on the IJmuiden Green Steel Project to 1 March 2027. The original 2025 letter carried potential state support of up to €2bn. Basic engineering is nearly complete, but no final investment decision has been taken; the parties cited changed circumstances, including the Commission's revised timetable for phasing out free ETS allowances.
2026: On 30 September 2026 Stegra announced that the cost of completing Boden was significantly higher than estimated in June, mainly because of the cost of re-accelerating construction after a prolonged slowdown earlier in the year, together with inflation. Press reports put the additional requirement at not less than SEK 10 billion (~€880m). Håkan Buskhe, former CEO of Saab and a Wallenberg Investments executive, succeeded Henrik Henriksson as CEO from 1 November. Shareholders and lenders had by then provided almost €8bn in equity and debt.
2026: SSAB permanently shut down the Oxelösund blast furnace on 19 October 2026. A 1.2 Mt/yr EAF, operating on scrap and fossil-free sponge iron, is due to start production in Q2 2027, after power-line appeals delayed it by a quarter. SSAB's new Luleå mill remains scheduled for late 2029. Both can run on scrap and purchased sponge iron ahead of supply from HYBRIT's Gällivare plant.
2026: Contrary to earlier expectations, 2026 did not see hydrogen direct reduction reach commercial operation in Europe. Stegra required further capital in September, with production not expected before 2027; Thyssenkrupp's Duisburg DRI plant will start on natural gas; and the HYBRIT demonstration plant at Gällivare still awaits an investment decision. The projects actually approaching start-up are scrap-based EAF conversions at existing integrated sites, led by SSAB Oxelösund. The direction of travel is from hydrogen ambition to EAF pragmatism.

2026: Decarbonisation Meets Economics

Read as a whole, 2026 does not support the reading that green steel simply accelerated. The year's developments only appear contradictory – Stegra raising €1.4bn (and then needing more within months) and ArcelorMittal committing €1.3bn at Dunkirk while other European projects were delayed or abandoned – if they are read as a single trend. They are better understood as an unresolved three-way tension between carbon regulation that penalises high-carbon steel, capital expenditure running to billions per site, and a market of weak demand, Chinese overcapacity and high European electricity prices in which that investment is difficult to underwrite.

The first wave of decarbonisation was a test of technology: H₂-DRI, electric arc melting, CCS and renewable power. The second wave, which 2026 opened, is a test of commercial viability – and it is being decided by electricity prices, state aid design and demand-side policy rather than by metallurgy. On the evidence of this year, that is the more important development: the sector has moved from technology optimism to a contest over the economics and the policy architecture required to make low-carbon steel commercially sustainable. Related reading: green steel essentials and assessing green steel demand.

Definitions and Technical Terms

CCS: Denotes carbon capture and storage. It refers to a process of capturing and storing carbon dioxide (CO₂) before the gas is released into the atmosphere.
Greenhouse gases: Refer to carbon dioxide CO₂, methane CH₄ and nitrous oxide N₂O. GHGs also include methane, nitrous oxide and fluorinated gases such as hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride and nitrogen trifluoride.
CBAM: Denotes the Carbon Border Adjustment Mechanism, the EU measure that applies a carbon cost to imported goods, including iron and steel, equivalent to that borne by EU producers under the ETS. Its definitive regime, requiring the surrender of certificates against embedded emissions, began on 1 January 2026.
H₂-DRI: Hydrogen-based direct reduction of iron. Iron ore is reduced to metallic iron in the solid state using hydrogen rather than carbon monoxide from coke or natural gas, the by-product being water rather than carbon dioxide. The resulting sponge iron is then melted in an electric arc furnace (EAF).
SALCOS (Salzgitter Low CO₂ Steelmaking): A technology approach developed by Salzgitter AG in collaboration with the Fraunhofer Institute that aims to gradually replace conventional blast furnace routes with direct reduction plants and electric arc furnaces powered by hydrogen and renewable electricity, reducing carbon emissions by up to 95%. The SALCOS project is mentioned multiple times in the timeline above as a major European decarbonisation initiative.

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