Green Steel Transition to Boost EAF Market
The global market for Electric Arc Furnaces (EAF) is projected to reach $1.1 billion by 2030, growing at a CAGR of 5.6%. This growth is driven by the global steel industry's shift towards greener production methods, as EAFs are a key technology for recycling scrap steel and reducing carbon emissions.
- Electric Arc Furnaces (EAFs) produce steel with significantly lower carbon emissions, averaging around 0.77 tons of CO2 per ton of steel, compared to the 2.33 tons of CO2 per ton from traditional Blast Furnace-Basic Oxygen Furnace (BF-BOF) methods. - Turkey's steel industry is well-positioned for this transition, as EAFs already account for approximately 75% of the country's total steel production capacity. The nation's 27 EAF plants form the backbone of its production, which became the largest in Europe as of August 2025. - Major Turkish steel producers are investing heavily in renewable energy to power their operations. Tosyali Holding is investing nearly $1 billion in a 1.2 GW solar power project, and OYAK Mining Metallurgy Group plans to invest $3.2 billion by 2030 in its green transformation, including new EAFs and 2,200 MWe of solar capacity. - The Turkish government is actively encouraging this shift through new incentive systems. A presidential decree on May 31, 2025, provides VAT exemptions, customs duty relief, tax reductions, and land allocation for investments in green initiatives, energy efficiency, and emissions reduction. - A primary driver for Turkey's decarbonization is the European Union's Carbon Border Adjustment Mechanism (CBAM), which places a carbon price on imports. As a major steel supplier to the EU, the transition to greener methods is crucial for Turkish producers to maintain their competitiveness. - Turkey is developing its own national carbon market, with a pilot phase for an Emissions Trading System (ETS) scheduled for 2026-2027. This will create a domestic regulatory framework for emissions and further incentivize decarbonization in heavy industries like steel. - The next technological step involves using green hydrogen to produce Direct Reduced Iron (DRI), a clean feedstock for EAFs that avoids the use of fossil fuels entirely. This represents a significant opportunity for deeptech and climatetech startups focused on hydrogen production and industrial applications. - To support these goals, Turkey launched the Industrial Decarbonisation Investment Platform (TIDIP) with the EBRD and World Bank, aiming to deploy $5 billion by 2030 to reduce emissions in key sectors, including steel.
