Steel is everywhere, in bridges, buildings, vehicles and wind turbines, but its production remains one of the world’s biggest climate polluters.
According to the Air Pollution from the Global Steel Industry report, the sector is responsible for roughly 11 per cent of global CO₂ emissions, with traditional coal-fired blast furnaces emitting about 1.9 tonnes of carbon dioxide for every tonne of steel produced.
In response, governments and corporations are racing to green the industry using renewable energy and hydrogen-based technologies.
But this transition has also placed many local communities in the grip of a modern-day gold rush, with far-reaching consequences that range from environmental destruction and displacement to, in some cases, outright violence.
From Europe’s industrial heartlands to the Global South’s resource frontiers, green steel is reshaping livelihoods just as much as it is cutting emissions.
According to Dr Klemens Laschefski of the Federal University of Minas Gerais, the language of sustainable development is increasingly being used to justify the dispossession of local communities.
“Something is wrong,” he says, pointing to the conflict in Pindaíba, Brazil, where residents have been resisting the use of community land by large corporations for carbon credit projects.
Investigations by Deutsche Welle journalist Daniel Harrich show that eucalyptus plantations are rapidly replacing indigenous savanna woodlands in parts of Brazil, disrupting ecosystems and lowering water tables as rivers dry up.
In Minas Gerais alone, more than 540 such conflicts have been recorded. Steel companies, particularly in Brazil, rely on eucalyptus plantations to produce charcoal, a renewable alternative to fossil coal used in pig iron and steelmaking.
By substituting charcoal derived from fast-growing eucalyptus trees for coal, companies claim reduced net carbon emissions, arguing that the biomass is carbon-neutral because trees absorb CO₂ as they grow, offsetting emissions when burned.
This accounting allows firms to generate and sell carbon credits under mechanisms such as the Clean Development Mechanism or voluntary carbon markets, effectively monetizing the perceived avoidance of fossil fuel use.
At the same time, hydrogen is being promoted as a revolutionary solution for steelmaking. By replacing carbon with hydrogen as the reducing agent, particularly in direct reduced iron (DRI) processes, emissions can be drastically cut, producing water vapour instead of carbon dioxide.
Yet not all hydrogen qualifies as “green”. True green hydrogen is produced using renewable electricity and water, resulting in near-zero emissions.
In many regions, however, hydrogen is still derived from fossil fuels, offering limited climate benefits while reinforcing existing fossil dependencies.
Projects such as Sweden’s HYBRIT initiative demonstrate that genuinely green hydrogen-based steelmaking is technically viable.
But scaling these models depends on access to abundant renewable energy, conditions that do not exist in many fossil-heavy regions, raising questions about how universally applicable the green steel label truly is.
In Africa, Kenya is positioning itself as an emerging player in green steel by harnessing its abundant renewable energy, particularly solar and hydropower, to run electric arc furnaces for cleaner steel production.
Flagship initiatives such as the Kenya Green Steel Project aim to produce rebar using solar-powered EAFs fed by scrap metal and hot briquetted iron, while established manufacturers, including Mabati Rolling Mills, are integrating more sustainable practices into their operations.
Yet across the green steel value chain, indigenous and rural communities remain frequently sidelined. An estimated 54 per cent of critical minerals, many of them essential for hydrogen technologies, are located on or near indigenous lands.
Without meaningful consultation and safeguards, the green steel transition risks reproducing old patterns of rights violations and environmental harm, as the experience of communities like Pindaíba illustrates.
