Middle East steel going green

Green steel production in the Middle East gets a new lease of life as the region injects funding into growing the green economy

Green transition. Aerial view of a train driving through a forest.

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LuPa Creative/Getty Images/iStockphoto

The Middle East and North Africa (MENA) region is ramping up efforts to produce greener steel and develop a clean energy grid to help lower carbon emissions. Steel production in the Middle East is relatively clean compared to the rest of the world due to the region’s extensive natural gas reserves.

But for the MENA region to truly champion ‘green steel’, it must deploy an adequate renewable energy infrastructure that allows it to move away from natural gas. 

Clean energy projects we’re keeping an eye on 

The Middle East currently produces less than 3% of global steel but has over 50 million tonnes of surplus capacity. Demand for green steel is rising daily. The Middle East is advantaged to scale up its green economy, attract global investment and take advantage of this demand.  

The green steel trade advantage 

The MENA region also has the potential to transition from a steel trading hub to become a global net-exporter – if positioned correctly. Opportunities to trade are more in favor of low-carbon exporting regions. The EU’s carbon border adjustment mechanism (CBAM) is a perfect example of this as it offers a cost advantage on the carbon emissions linked to steel imported. Suppose the Middle East was to utilize its dormant capacity alongside improving its clean energy grid – the region could reposition itself as a global net-exporter and become a green steel hub over the next 20-30 years.

The growing importance of Middle Eastern steel production and the region’s natural resources to the global decarbonization challenge 
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