The Middle East and North Africa (MENA) region stands on the verge of transforming into a global hub for green steel and iron production. As detailed in a report from the Institute for Energy Economics and Financial Analysis (IEEFA), leverages MENA’s rich solar energy resources for producing green hydrogen essential for direct reduced iron (DRI)-based steelmaking. This positions MENA as a prime supplier to significant steel markets, notably India and Europe, both keen on eco-friendly steel alternatives.
IEEFA’s lead steel analyst Simon Nicholas underscores MENA’s readiness, given its established DRI technology infrastructure and renewable energy resources. This combination positions the region for affordable green hydrogen production, pivotal for green iron manufacturing.
Contrasting traditional methods like carbon capture utilization and storage (CCUS) and blue hydrogen, green hydrogen emerges as a more cost-effective and efficient alternative. Soroush Basirat from IEEFA notes the expected shift in iron production to regions abundant in renewable resources, positioning MENA as a leader, yet in a competitive landscape with nations like Australia, Brazil, and Canada.
Europe’s carbon pricing strategies and the upcoming carbon border adjustment mechanism spotlight the need for MENA to evolve into a low-carbon steel industry. This evolution promises not only environmental alignment but also a competitive edge in the global market.
Saudi Arabia’s ambition to burgeon into a major car manufacturing hub signals a robust internal market for green steel, highlighting MENA’s capacity to cater to both local and international green steel demands.
The region’s current expansion in gas-based DRI plants, while a step towards reduced carbon intensity, adds to MENA’s carbon footprint. A strategic pivot towards more domestic use of green hydrogen, as opposed to export-focused strategies, could align MENA with its emission reduction goals while securing its position in the future of the global iron and steel sector.
With its natural resources and existing infrastructure, MENA is uniquely placed to lead the green iron and steel revolution, setting a global standard for sustainable industrial practices. This transformation presents MENA not just as a participant but as a frontrunner in the journey towards environmentally responsible industrialization.
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