PwC analysis questions viability of EU green‑steel subsidies

A PwC study finds that producing primary steel in Europe with hydrogen or other low‑carbon methods is not economically viable under projected energy prices, limited hydrogen supply and the EU carbon‑border adjustment mechanism. The analysis, covering three future scenarios, predicts a substantial loss of primary steel output for Germany and Austria, with production likely shifting to regions where ore and energy are cheaper, such as the Gulf states and India.

German authorities have earmarked €5.9 billion in state aid to convert the domestic steel sector from blast‑furnace to hydrogen‑based processes, citing projects like Salzgitter’s transition. However, the PwC report warns that even with this funding, the cost advantage of European steel will disappear by the 2030s, leaving only Scandinavia potentially competitive under high carbon‑price regimes. The study also notes new direct‑reduction plants being built in Oman by the Naveen Jindal Group and Singapore’s Meranti Green Steel, with buyers already secured including Thyssenkrupp Materials Trading and Vale.