The Iran war is impacting global greener steelmaking initiatives by disrupting trade, increasing costs for insurance and key inputs, and creating widespread uncertainty. Projections for global steel demand growth have been significantly lowered as a result.
The conflict has particularly affected the Persian Gulf, a region emerging as a prospective hub for lower-carbon iron and steel production. Geopolitical instability is now a major factor for investors in green iron and steel projects, raising questions about secure and insurable trade corridors. Direct attacks on steel plants in Iran and Bahrain have damaged or destroyed over 10% of global direct reduced iron (DRI) capacity. Projects in Oman, the UAE, and Saudi Arabia are facing delays in final investment decisions due to these security concerns.
Beyond the Gulf, steel mills in Southeast Asia are experiencing energy shortages, leading to potential delays in business expansions. India is seeing a renewed focus on coal gasification as a transitional strategy, despite research indicating it may not significantly reduce lifecycle emissions compared to current technologies. The war is prompting a global rethink of reliance on fossil fuel imports, potentially accelerating the development of renewables and the greener steel agenda.
Source: Down To Earth