LeadIT analysis: 2026 set to test green steel as project pipeline loses momentum

After several years of rising expectations, the global green steel and green iron sector is entering a decisive phase. According to the Leadership Group for Industry Transition (LeadIT) Green Steel Tracker, the pace of new project announcements slowed sharply in 2025, falling from a peak of 15 projects in 2021 to just two last year.

Despite the weaker pipeline, 2026 is shaping up as a crucial year for execution rather than announcements. Planned primary green steel capacity for 2050 still represents less than 2% of today’s global steel output, underlining how early the transition remains.

One of the most closely watched milestones is Stegra’s project in Boden, Sweden, which LeadIT identifies as the first potential full-scale commercial commissioning of green steel. Several pilot and demonstration projects are also expected to move forward this year, including initiatives in Germany and the United States.

“Successful commissioning of Stegra in Boden in 2026 and the roll-out of longer-term projects in the Hybrit alliance of SSAB, LKAB and Vattenfall, alongside pilot projects globally, will impact the sector in the coming years. These projects will influence confidence and the pace of transition not just in Sweden and not just in steel production but internationally and across industry,” said Per Andersson, Head of Secretariat, LeadIT.

At the same time, the Tracker highlights growing execution risks. Delays are common among projects with published commissioning dates, while limited transparency makes timelines difficult to assess for many others. In 2025, several high-profile European projects were paused or cancelled, reflecting cost pressures, weak demand and an uncertain policy environment.

LeadIT estimates that by 2050, planned capacity amounts to around 28 million tonnes per year of primary green steel and 18 million tonnes per year of green iron for steelmaking. That compares with today’s global steel production of roughly 1.8 billion tonnes per year, showing the scale of the gap that still needs to be closed.

Actual production remains marginal. Only about 270,000 tonnes per year of green iron capacity and 60,000 tonnes per year of green steel capacity are currently operational, meaning only a small fraction of announced projects has reached the production stage.

While major steelmakers continue to signal commitment to decarbonisation, the combination of higher costs, weak markets and policy uncertainty is slowing investment decisions. LeadIT argues that targeted policy support will be critical to keep projects moving until low-carbon steel becomes competitive at scale.

“Policy support to get first-of-a-kind green steel projects up and running can deliver benefits far beyond any single plant by accelerating learning, proving the technology at scale, and helping create early markets and confidence across the entire sector,” said Aaron Maltais, Policy Lead, LeadIT.

Source: SEI, Photo: Fotolia