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I spent much of 2024 writing about the ambitious plans that U.S. steelmakers had to clean up the coal-reliant industry. But by the start of 2025, it was fast becoming clear that those green-steel dreams were in serious trouble.
Under the Biden administration, two big companies had proposed pioneering projects for cleaner steelmaking that were slated to receive $1 billion in federal support and would serve the growing market for lower-carbon metal. The industry seemed poised to begin a new chapter in the storied history of American iron and steel.
The manufacturer SSAB planned to produce iron — the key ingredient in steel — using green hydrogen in Mississippi. Then early last January, I saw the Swedish company had quietly withdrawn from award negotiations with the U.S. Department of Energy following the demise of its would-be hydrogen supplier, Hy Stor Energy. Soon after, President Donald Trump took office for a second time, moving swiftly to rescind grants and dismantle federal programs meant to advance clean energy and curb industrial emissions.
It wasn’t long before Cleveland-Cliffs, the other award recipient, shelved its own initiative for a hydrogen-ready ironmaking plant in Ohio. Today, the company is working with the Trump administration to develop a new scope for the project, one that preserves the use of fossil fuels. And SSAB recently told me that it’s not planning to revive any hydrogen-based projects in the United States.
Green hydrogen, which is made with renewable energy, has long been considered the Holy Grail for decarbonizing heavy industries because it can be used to replace fossil fuels in existing technologies and manufacturing methods. But now the U.S. green hydrogen boom itself has collapsed, taking the steel industry’s ambitions down with it.
At the dawn of 2026, America’s steel producers have no major green hydrogen initiatives slated to start this decade. Supplies of the low-carbon fuel remain scarce and expensive, and there’s no serious, coordinated attempt by the U.S. government to help resolve these stubborn barriers to cleaner steelmaking.
But while it may seem as if the industry has given up on decarbonizing U.S. steel production, the reality is much more nuanced.
Despite the high-profile retreats, manufacturers are still steadily making progress to clean up the country’s nearly 2-century-old industry. Legacy companies are investing in new steel-recycling mills, and startups are building facilities and raising private funding to scale novel technologies. Tech giants are boosting demand for cleaner construction materials as they work to limit the climate impact of the data center boom.
So what should we expect in the year ahead? There is no one clear path forward in the transition to greener steelmaking but rather many winding roads, with some heading toward progress and others looping back to the past. Here are three broad developments I’ll be keeping an eye on.
America’s modern steel era began in the late 19th century, fueled by scorching blast furnaces that use coke — a purified form of coal — to transform iron ore into molten iron, which is then turned into steel. This is still the main way that virgin, or “primary,” steel is made today, and it’s responsible for the bulk of the industry’s carbon emissions and toxic air pollution.
In recent decades, U.S. manufacturers have largely shifted to making “secondary” steel by recycling scrap metal in electric arc furnaces. But a dozen blast furnaces still operate in a handful of states, and their owners say they’re committed to keeping the facilities running well into the future.
U.S. Steel, which is now a subsidiary of Japan’s Nippon Steel, is set to “reline” its largest blast furnace in Gary, Indiana — a major maintenance project that could extend the aging furnace’s operating life by up to 20 years. In late December, U.S. Steel’s board of directors approved $350 million for the undertaking. The company also announced that it will restart operations at an idled blast furnace in southern Illinois to meet rising demand for domestic steel.
Cleveland-Cliffs, which relined one of its blast furnaces in Cleveland in 2022, plans to make similar upgrades at two other mills. The company will reline a blast furnace in Burns Harbor, Indiana, in 2027 and do the same in Middletown, Ohio — the site of its previous hydrogen project — “in the next four to five years,” according to CEO Lourenco Goncalves.
“Reality is back. La-la land is gone,” he said about the change of plans during an earnings call last May.
The manufacturers argue that propping up existing infrastructure is the better choice economically for maintaining and expanding their steelmaking capacity, versus building a new furnace or adopting other technologies. In the long run, however, those coal-fueled furnaces could become big liabilities as automakers, data center developers, and other key customers look to suppliers that offer less-carbon-intensive metal.
“The real challenge, from a technology perspective, is that there’s not really a path for a blast furnace to make the [low-carbon] products that are increasingly being demanded in the market,” said Kaitlyn Ramirez, a senior associate in RMI’s Climate-Aligned Industries Program. “There’s no solution that’s going to be cost-competitive to do that.” She added that the relining decisions represent a “window of opportunity” for steel producers to pivot away from coal instead.
Even as the two steel giants throw a lifeline to a few old dirty furnaces, they and other companies are still making investments to expand lower-carbon production of the ubiquitous, sturdy metal.
Nippon Steel, for its part, recently announced plans to build a $4 billion plant somewhere in the U.S. with two new electric arc furnaces, which typically combine a little bit of iron with a lot of scrap metal. These facilities can curb carbon emissions by 75%, compared to traditional steel mills, because they require using dramatically less coal, a figure that will grow as the nation’s grid increasingly runs on clean energy, according to industry reports.
Its subsidiary U.S. Steel already operates a sprawling steel-recycling operation in Osceola, Arkansas. I visited the Big River Steel site in late 2023, when U.S. Steel was building a second multibillion-dollar plant to make steel specifically for electric vehicle motors, solar panels, and power generators and transformers. Right next door was a field of flattened dirt where Entergy’s 250-megawatt solar farm was soon to be installed.
U.S. Steel finished the construction last year, and the company plans to buy enough clean electricity from the completed solar project to cover 40% of the second plant’s operations. Major steel recyclers like Nucor and Steel Dynamics have also struck deals with clean energy developers in other states to help reduce the emissions associated with running their power-hungry furnaces.
U.S. Steel is also set to construct a “direct reduced iron” facility at the Big River Steel site as it works to lead the industry in “advanced, sustainable steel production,” spokesperson Amanda Malkowski told the Arkansas news site Talk Business & Politics.
Neither Nippon Steel nor its subsidiary has given many specifics about the new ironmaking project. But most DRI facilities operating today use fossil gas to remove oxygen from iron ore, which yields lumps of iron that are fed into electric arc furnaces. This process emits about half as much CO2 as a coal-fired blast furnace. Using green hydrogen can curb overall emissions even further, by up to 90%, experts say.
Based on what’s happened in recent years, I’d be surprised if Nippon Steel plans to source green hydrogen for the project. But another major steelmaker claims to be committed to using the fuel down the road. Hyundai Motor Group says it plans to build a $6 billion steel plant in Louisiana by 2029 that will include a DRI facility and an electric arc furnace. The Korean automaker reportedly intends to start producing green hydrogen at the facility in 2034, though it hasn’t said much publicly about how it will manage such a feat.
Industrial giants aren’t the only ones working to clean up U.S. steelmaking. A handful of well-funded startups are steadily advancing newer ways of making the high-strength metal without using coal.
Last year, Boston Metal said it gotten one step closer to commercializing its “molten oxide electrolysis” technology after it fired up an industrial-size reactor at its facility in Massachusetts. Electra unveiled the site of its first demonstration plant in Colorado, where the company will produce iron with electrochemical devices powered by renewables. And in Texas, the startup Hertha Metals is turning iron ore directly into steel using a high-temperature, single-step process that currently runs on fossil gas but could switch to green hydrogen whenever supplies become commercially available, Hertha’s CEO Laureen Meroueh told me.
These novel efforts are drawing investment from not just global mining giants and metals manufacturers but also companies that use lots of steel — and see the material as a major source of their own supply chain emissions. Meta, for example, has agreed to buy certificates from Electra that will allow the tech company to count the emissions reductions associated with each ton of Electra’s clean iron toward Meta’s climate targets.
“Many of the long-term-focused large companies are looking at sustainability goals that last 10 to 20 years,” said Greg Matlock, the Americas metals and mining tax leader at accounting firm Ernst & Young. “Regardless of what the current political landscape is, I do think there’s absolutely still an appetite [for industrial decarbonization], and it’s a global appetite.”
The European Union is driving much of that global momentum. On Jan. 1, the 27-member bloc began implementing a carbon border tariff, which charges fees on imports of steel, aluminum, and other industrial products made in dirtier facilities abroad. The idea is to level the playing field for European manufacturers that invest in cleaner and potentially costlier facilities, while also encouraging other countries to regulate their own industrial CO2 emissions.
The carbon tariff won’t directly affect U.S. steelmakers all that much, given that they export only a tiny amount of metal to EU-member countries. But the policy’s ripple effects are already transforming the broader industry and putting pressure on all steel producers to modernize and clean up. Countries such as Brazil and Turkey have introduced domestic carbon-pricing policies in response to the EU’s moves. China has started shipping steel made using hydrogen to Italy, which experts say could set the stage for boosting Chinese green-steel exports.
“We’re moving toward a global standard … for lower-carbon steel, so American companies will be well positioned to compete in [global] markets if they continue to decarbonize,” said Angela Anderson, director of industrial innovation for the World Resources Institute. “It’s not likely that those trends are going to just dry up or reverse anytime soon.”
The U.S. has a chance to be at the cutting edge of cleaner steelmaking. Right now, the question seems to be not if we’ll take it, but when — and how far we’ll fall behind the rest of the world in the low-carbon industrial revolution.
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