Green Steel vs. Cheap Steel: Can Sustainability Compete in Heavy Industry?

In Western countries, green steel production is gaining momentum. Green steel—produced using renewable energy or with significantly reduced carbon emissions—has already become part of national climate strategies in countries like Germany, Sweden, and the Netherlands. For example, Swedish company H2 Green Steel plans to release its first hydrogen-based steel in 2025, aiming for near-zero carbon emissions. Similar projects are underway in Germany, where companies like ArcelorMittal and ThyssenKrupp are receiving public funding to launch green steel production lines.

However, competing with cheap, mass-produced steel—particularly from China and India—remains a major challenge. China currently accounts for 52% of global steel output, with India in second place. Both countries rely heavily on coal-powered production, keeping prices low. As of now, green steel makes up only about 2% of global steel production, underscoring that the technology is still in its early phase. On top of that, green steel is currently 20–40% more expensive than conventional alternatives, which often becomes a decisive factor in large-scale construction. According to McKinsey, the global green steel market could reach 300 million tons by 2030, but that would still represent just 15–20% of total demand.

In Europe, environmental regulations are supporting green steel through direct subsidies and preferential treatment of low-emission products. The EU’s Carbon Border Adjustment Mechanism (CBAM) aims to enhance the competitiveness of low-carbon materials in global trade. In the U.S., the Inflation Reduction Act (IRA) provides tax incentives for green technologies, already attracting investment into green steel infrastructure.

In Georgia, the market currently shows almost no demand for green steel. The construction sector prioritizes cost efficiency, with most steel imports coming from Turkey and Russia—countries where ecological standards are far from matching green steel benchmarks. However, if cooperation with European corporations expands and green procurement criteria are introduced in Georgian construction projects, the structure of demand could gradually shift. While the topic is still mostly limited to expert discussions, tightening climate policies and pressure from international partners may soon bring it to the forefront of the local agenda.