MENA poised to lead global green iron and steel transition
Key Takeaways:
The Middle East & North Africa (MENA) region has the potential to become the leader in the global industry's transition to green iron and steel.
The region is a leading hub for gas-based direct reduced iron (DRI) production, the ironmaking technology that has the flexibility to transition to using green hydrogen, enabling further emissions cuts.
MENA enjoys significant advantages, including reliable access to feedstocks including DR grade pellet and fossil gas as well as cheap renewable energy, that present a once-in-a-generation opportunity to capitalise on key markets for green iron and steel.
6 March 2025 (IEEFA Australia): Recent announcements have underlined the potential for the Middle East and North Africa (MENA) to lead global industry’s transition to green iron and steel, according to the Institute for Energy Economics and Financial Analysis (IEEFA).
On 25 February, Libya unveiled plans to become a supplier of direct reduced iron (DRI) in the Mediterranean basin and beyond with the announcement of a DRI complex to be built in the Benghazi region. That news followed earlier moves by Brazilian iron ore giant Vale to expand its iron ore concentrate and agglomerate capacity in the MENA region via its mega hub concept.
These developments align with the findings of new research from IEEFA. Soroush Basirat, Energy Finance Analyst, Global Steel at IEEFA, examined the competitive attributes that MENA enjoys as the global iron and steel industry races to decarbonise its production. Basirat’s latest briefing note provides a visualisation of the region’s advantages in this area, bolstered by major projects announced in renewables, green hydrogen, and iron and steel. It also provides an overview of the region’s current capacities, helping contextualise these developments.
“MENA has one of the world’s fastest growing steel industries and is the leading hub for gas-based production of direct reduced iron (DRI),” says Basirat. “Steelmaking from DRI using electric arc furnaces has lower emissions than traditional coal-based processes. It also offers the flexibility to transition from fossil gas to green hydrogen, enabling even greater emissions cuts.”
MENA’s DRI capacity is growing; in 2023, it accounted for 45% of global DRI production, up 11% from 2021. The region also enjoys a number of advantages that support this growth. While other regions see access to high-grade feedstocks as a barrier to decarbonising via DRI-EAF, MENA enjoys reliable availability of iron ore concentrate and pellets. This availability will grow further as a result of Vale’s expansion plans.
In addition, MENA is one of the world’s fastest-growing renewable energy markets and holds records for some of the cheapest renewable energy, supported by its unique solar and wind potential. As a result, the region is emerging as a leading green hydrogen hub, with deployment of green hydrogen in steelmaking already underway.
“MENA is well placed to become a leader in green iron and steel production,” says Basirat. “Its established infrastructure, combined with growing investment in low-emissions technologies, will provide a significant competitive advantage in the evolving green steel market.
“By taking the right steps now, the region can seize this once-in-a-generation opportunity to supply green iron and steel to key markets such as Europe and Asia.”
Read the analysis: MENA poised to lead global green iron and steel transition
Media contact: Amy Leiper, ph 0414 643 446, [email protected]
Author contact: Soroush Basirat, [email protected]
About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends, and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. (ieefa.org)
