Prospective environmental and economic assessment of green steel production in the Middle East

The transition to low-carbon steel is important for achieving net-zero emissions while opening market opportunities for the Middle East. However, a comprehensive environmental and economic assessment of low-carbon steelmaking in the region that accounts future scenarios has been lacking. This study evaluates two low-carbon pathways for steelmaking: the green hydrogen-based direct reduction of iron ore with an electric arc furnace (H2-DRI-EAF) and natural gas-based DRI-EAF with carbon capture and storage (NG-DRI/CCS-EAF). The results show climate impact reductions of 68 % using H₂-DRI-EAF and 61 % using NG-DRI/CCS-EAF by 2060 under the 2 °C energy systems scenario. Green hydrogen outperforms CCS in climate impact but has trade-offs regarding non-climate impacts due to material demands for photovoltaic and electrolyzer systems. The cost analysis discusses the importance of carbon pricing and subsidy reform as key drivers of competitiveness and decarbonization. This study highlights the systemic energy, industrial, and policy changes required to achieve green steel production.