The lagging US primary steel industry risks falling further behind in a rapidly decarbonizing global market absent large-scale investment in a transition to low- or zero-emissions “green” steelmaking, according to our latest report.
US primary steelmaking has already lost considerable ground to China and greater Asia, which collectively produced 70% of the world’s crude steel in 2024. Now China is signalling it may begin its pivot toward industrial decarbonization at scale and other regions are following suit. Growing demand for low-carbon green steel presents new market opportunities, but legislation passed by the Trump administration has unraveled federal investment in industrial decarbonization, incentivizing domestic steel manufacturers to double down on carbon-intensive “traditional” steelmaking.
“Without large-scale investment and political willpower, the opportunity for a US renaissance in steelmaking, driven in part by decarbonization investments, may be slipping away,” said Justine Hackimer, Industrial Decarbonization Program Manager with the Ohio River Valley Institute.
Nippon’s acquisition of US Steel offers a potential opportunity for US steelmakers to make up ground in the global market, creating new steelmaking jobs and slashing harmful, climate-warming emissions from a historically hard-to-decarbonize industry. The Japanese steelmaker has committed $5.5 billion in upgrades between Pennsylvania’s Mon Valley Works and Indiana’s Gary Works, along with an additional $1 billion to construct a new mill at a site yet to be determined.
“If smartly invested in forward-thinking, low-carbon modernization upgrades and the construction of new green steelmaking capacity, Nippon’s investment could reverse course for the declining US steelmaking industry, creating safe, good-paying American jobs and seeding safer, healthier, and more prosperous communities across Pennsylvania and Indiana,” said co-author Nick Messenger, an economist and senior researcher with the Ohio River Valley Institute.
“Green steelmaking presents an opportunity to lead in developing markets for lower-emissions steel by gaining advantages in trade with Asia and Europe through border adjustment mechanisms and emerging green premiums,” said co-author and Ohio River Valley Institute Research Fellow Kathy Hipple. “Making the green steel transition may also provide the single best opportunity for US steel companies and steel communities to reverse several decades of eroding steel jobs, wages, and market share.”
On Tuesday, November 4, US Steel released details of its multi-year growth plan, including plans to build a hot strip mill at its Edgar Thomson Works Plant in Braddock, PA.
“Rather than making the capital investments needed to bring upstream iron and steelmaking into the 21st century, the company appears to be doubling down on outdated, coke-based methods at Clairton and Edgar Thomson,” Hackimer said of the plan. “Maintaining the status quo isn’t cheap — relining and operating outdated infrastructure is enormously capital- and pollution-intensive. A true commitment to the Mon Valley’s future would mean investing in cleaner, more efficient technologies that protect both good union jobs and the workforce’s future in a decarbonizing global market, and the health of our communities for generations to come.”
“Falling Further Behind: How a Failure to Transition to Green Steel Could Cost US Steelmakers, Western Pennsylvania Communities, and the Environment” presents one of the most extensive overviews of the current state of the global steel industry and the economic opportunities achievable through the pursuit of low-carbon green steel, in particular. It updates and expands upon previous research finding that a transition to fossil fuel-free steelmaking in Pennsylvania’s Mon Valley could slash 4 million metric tons of CO2e annually and grow steelmaking-supported jobs by up to 43% by 2031, forestalling projected job losses.