The steel industry is increasingly shifting toward greener production as regulations tighten and customer preferences evolve, according to Meranti Green Steel founder and chief executive Sebastian Langendorf.

Speaking at an industry webinar, Langendorf noted that policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and rising carbon taxes in Southeast Asia are driving steelmakers to cut emissions. Singapore, for instance, will raise its carbon tax to $45 per tonne by 2026.

This shift is also reshaping demand, particularly in sectors like automotive and construction, where low-carbon steel is becoming a priority.

A key technology in green steel production is direct reduced iron (DRI), which uses cleaner fuels like natural gas or hydrogen and requires high-grade iron ore. Though DRI accounts for only a small fraction of global steel output, its demand is expected to grow rapidly.

Scrap steel is another crucial factor, with 800 million tonnes produced annually, a figure that could rise to 1.5 billion tonnes by 2050. However, iron ore-based steel will remain necessary, particularly in fast-growing regions like India and Africa.

Southeast Asia, currently producing around 80 million tonnes per year, may double its output by 2035. While traditional blast furnaces still dominate, early signs of green steel adoption are emerging, particularly in Thailand’s automotive sector and Singapore’s construction industry.

Langendorf emphasized that steelmakers are following two strategies—preparing to meet Europe’s rising demand for green steel while gradually developing local green markets in Southeast Asia. He affirmed that “the shift has started, and green steel is here to stay.”