A development that continues to drive the European steel market towards decarbonization: Swedish steelmaker SSAB has received funding of 20 million euros from the European Union. The funds are intended for a research and development program aimed at advancing the production of green steel through hydrogen-based direct reduction. The funding underscores the strategic importance of steel transformation for European climate policy and the building materials industry.
SSAB is pursuing a production approach with its HYBRIT project (Hydrogen Breakthrough Ironmaking Technology) that replaces fossil fuels with hydrogen. In contrast to conventional blast furnace technology, which produces structural steel with high CO₂ emissions of up to 1.9 tons of CO₂ per ton of steel, the DRI process with green hydrogen is intended to reduce emissions to nearly zero. The technology uses directly reduced iron (DRI) as feedstock for the electric arc furnace (EAF), eliminating the energy-intensive coke combustion. SSAB already conducted initial pilot deliveries of fossil-free steel to customers in the automotive and construction industries in 2021 and plans to begin commercial production from 2026 onwards.
EU funding positions SSAB in an increasingly competitive market environment. In parallel, ArcelorMittal and Thyssenkrupp are also investing massively in hydrogen-based steel production, with ArcelorMittal alone investing around one billion euros in a DRI facility in Hamburg. For the building materials industry, this development has immediate consequences: reinforcing steel with a low carbon footprint is becoming a prerequisite for climate-neutral construction projects, particularly in the context of the European CBAM mechanism, which will introduce CO₂ limit values for imported steel products from 2026 onwards.
Planners and procurement managers should consider the availability of green steel early in tender specifications. The price premium for fossil-free steel is currently around 15 to 25 percent compared to conventional material, but is likely to decline in the medium term through scaled production and regulatory incentives. Furthermore, EPDs for green steel enable precise CO₂ accounting in building certifications according to DGNB or comparable standards. The SSAB funding is thus not only a technological milestone but also a signal for the accelerated integration of sustainable steel products into European supply chains.
A related project demonstrates the breadth of cooperation possibilities: SSAB and Heidelberg Materials develop low-CO₂ cement from steel slag and demonstrate how by-products of the steel industry can be integrated into circular building materials economy.
