Smelting Barriers: The Innovators Forging a New Future for Iron and Steel

The report analyzes the transition of the steel industry toward net-zero emissions, highlighting the role of emerging technologies and startups. It identifies the dominance of coal-based blast furnace-basic oxygen furnace (BF-BOF) facilities, which contribute approximately 8 percent of global greenhouse gas emissions, and examines alternatives such as Hydrogen-Direct Reduced Iron (H2-DRI) and scrap-based electric arc furnaces (EAFs). The document categorizes innovations into three pathways: reducing demand ('Make Less'), improving existing processes ('Make Better'), and developing disruptive technologies ('Make New'). It emphasizes the need for strategic investor-offtakers in high-growth markets like Asia and Africa, the potential of modular furnace technologies, and the strategy of generating early revenue through high-margin, low-volume products to derisk commercial scaling.

• The global steel industry is a $1.5 trillion business producing approximately 1.8 billion metric tons annually, but it is responsible for about 8 percent of global greenhouse gas emissions due to a heavy reliance on coal in blast furnaces.
• Integrated blast furnace-basic oxygen furnace (BF-BOF) facilities represent roughly 70 percent of global crude steel production and are highly inefficient, emitting approximately two tons of carbon dioxide for every ton of steel produced.
• Hydrogen-Direct Reduced Iron (H2-DRI) is currently the only available commercial production technology capable of net-zero emissions, though high costs and limited hydrogen access have hindered its scale; Stegra is the only commercial-scale project to date resulting from multinational commitments in the US and Europe.
• Global steel demand is projected to increase by 39 percent by 2050, potentially reaching 2.5 billion metric tons, with significant growth expected in Africa, India, and Southeast Asia.
• Innovation in the 'Make New' category includes low-temperature reduction systems (operating below 350°C) that can be paired with variable renewable energy, and modular furnaces that allow for decentralized production near energy sources or customers.
• Startups are overcoming capital intensity and the lack of 'green premiums' by targeting high-margin, low-volume products such as high-purity iron (HPI) for medical and magnet applications to generate early revenue.
• The report identifies a geographic misalignment where promising technologies are developed in the US and Europe, while the primary growth markets are in Asia and Africa, suggesting a need for investor-offtakers who can bridge these regions.

APA

RMI (2025). Smelting Barriers: The Innovators Forging a New Future for Iron and Steel. https://rmi.org/resources/smelting-barriers-the-innovators-forging-a-new-future-for-iron-and-steel/

Chicago

RMI. Smelting Barriers: The Innovators Forging a New Future for Iron and Steel. 2025. https://rmi.org/resources/smelting-barriers-the-innovators-forging-a-new-future-for-iron-and-steel/.

Wikipedia

{{cite report |author=RMI |title=Smelting Barriers: The Innovators Forging a New Future for Iron and Steel |date=8 December 2025 |url=https://rmi.org/resources/smelting-barriers-the-innovators-forging-a-new-future-for-iron-and-steel/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025smelting, author = {{RMI}}, title = {{Smelting Barriers: The Innovators Forging a New Future for Iron and Steel}}, institution = {RMI}, year = {2025}, month = dec, url = {https://rmi.org/resources/smelting-barriers-the-innovators-forging-a-new-future-for-iron-and-steel/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }