meed-logo

line1 line2 line3
SIGN IN / REGISTER

Gulf charts pathway to clean steel production

1 August 2024

 

Steel manufacturing accounts for 7%-9% of global carbon dioxide (CO2) emissions and is considered a hard-to-abate industry. With a forecast for strong growth in global steel production in the coming decades, changes need to be implemented to bring steelmaking in line with the UN Paris Climate Agreement goal of limiting global warming to 1.5 degrees Celsius.

The need for the international steel industry to slash CO2 and greenhouse gas emissions dominated the agenda at UN climate change summit Cop28 in Dubai last December, with about 35 companies and six industry associations, including the World Steel Association, endorsing the Industrial Transition Accelerator. The initiative aims to scale implementation and delivery of decarbonisation in the steel, aluminum, cement, transportation and energy sectors.

There are many levers for steel decarbonisation, including the electrification of heat generation, improving energy efficiency and increasing the utilisation of scrap steel. However, to reach net-zero, further steps are needed to address the emissions associated with coal’s role as a reducing agent in ironmaking. Breakthrough technologies that can accomplish this include hydrogen direct reduction to replace coal; carbon capture, utilisation and storage; and electrolysis-based, or green hydrogen-supported, production processes.

The Middle East and North Africa accounts for just 5% of global steel output. Despite this low market share, however, steelmakers in the region – particularly in the Gulf – have committed billions of dollars to investments in steel projects that could implement most proven clean technologies.

To reach net-zero, further steps are needed to address the emissions associated with coal’s role as a reducing agent in ironmaking

Saudi clean steel projects

Saudi Aramco, the kingdom’s sovereign wealth institution the Public Investment Fund (PIF) and Chinese steel manufacturing conglomerate Baoshan Iron & Steel Company (Baosteel) signed a joint venture agreement in May 2023 to establish an integrated steel plate manufacturing complex in Saudi Arabia’s Ras Al-Khair Industrial City.

The facility is expected to have a production capacity of up to 1.5 million tonnes a year (t/y). It will mainly cater to industrial sectors such as pipelines, shipbuilding, rig manufacturing, offshore platform fabrication and tank and pressure vessel manufacturing, as well as the construction, renewables and marine sectors.

The plant will be equipped with a natural gas-based direct reduced iron (DRI) furnace and an electric arc furnace to reduce CO2 emissions from the steelmaking process by up to 60% compared to a traditional blast furnace. The DRI plant will be compatible with hydrogen without major equipment modifications, potentially reducing CO2 emissions by up to 90% in the future, Aramco says.

The partners have invited contractors to submit engineering, procurement, installation and construction proposals for the project, which are due by 30 July.

Separately, Indian industrial conglomerate Essar Group is advancing its planned $4bn Green Steel Arabia project, which will also be located in Ras Al-Khair. Essar’s integrated steel complex will have a production capacity of 4 million t/y, and a cold rolling capacity of 1 million t/y, along with galvanising and tin plate lines. The complex will also have two DRI plants, each with a production capacity of 2.5 million t/y.

In September 2023, Essar signed a memorandum of understanding (MoU) with Jeddah-based Desert Technologies to develop solar energy solutions to power its Green Steel Arabia project. Under the agreement, Essar and Desert Technologies will look to develop solutions for renewable energy generation – mainly solar photovoltaic power – and storage for the planned complex.

The parties will also explore opportunities for other similar projects in the region, Mumbai-headquartered Essar said at the time.

A third major clean steel project in the kingdom has been announced by Turkish steelmaker Tosyali Holding, which will invest up to $5bn in the venture. Tosyali said in January that it intends to produce steel with the help of green energy sources and will increase its solar energy output 10-fold to 2,500MW, up from the 240MW it currently uses.

Fuat Tosyali, Tosyali’s chairman, said the increase in solar output will be facilitated by a $1.5bn investment, as well as through plans to buy a stake in a hydrogen energy company.

UAE makes strides

Clean steel production efforts in the UAE have been led by Emirates Steel Arkan, the country’s largest steel manufacturer. The company has partnered with Japan's Itochu to develop a low-carbon iron processing plant in Abu Dhabi that will be capable of processing high-grade Brazilian iron ore into reduced iron, which will be sent to Japan.

The proposed plant will be built in collaboration with Japan’s JFE Steel and is expected to produce about 2.5 million metric tonnes a year of reduced iron starting in 2027. CSN Mineracao, a Brazilian company in which Itochu maintains a stake, will supply the iron ore.

Emirates Steel and Abu Dhabi National Energy Company (Taqa) have also started the concept design for an electrolyser plant that they are jointly developing. Powered by renewable energy, the plant will have a hydrogen output capacity of 160MW, which will be used in the production of steel.

Abu Dhabi aims to establish a large-scale steel production hub with an overall capacity of 15 million t/y. This projected capacity will be in addition to Emirates Steel Arkan's existing production level of 3.5 million t/y, according to the firm's group chief projects officer, Hassan Shashaa.

Meanwhile, Dubai-headquartered Liberty Steel signed an MoU in December 2023 with Abu Dhabi’s AD Ports Group to invest in a green iron production facility in Khalifa Economic Zones Abu Dhabi.

Under the MoU, the two companies will explore the establishment of a green iron production facility and related port infrastructure and conveyor system at Khalifa Port in Abu Dhabi. The MoU is part of Liberty’s early-stage concept development to convert its magnetite ore into green iron in the UAE, using gas and transitioning to green hydrogen once it becomes available at scale in the next decade.

Green steel producers [in Oman] could benefit from cheap, locally available green hydrogen feedstock

Oman’s green steel plans

The largest green steel project in Oman is being developed by Vulcan Green Steel (VGS), the steel arm of Vulcan Green, which is owned by India’s Jindal Steel Group. VGS broke ground on the estimated $3bn project in December 2023.

The planned facility, covering 2 square kilometres in the Special Economic Zone at Duqm (Sezad), will have two production lines of 2.5 million t/y each, comprising DRI units, an electric arc furnace and a hot strip mill. 

Set for completion by 2026, the planned facility will primarily utilise green hydrogen to produce 5 million t/y of green steel. This will make it the world’s largest renewable energy-based green steel manufacturing complex once it is commissioned.

Sezad could also host another large-scale green steel project if Japanese steel manufacturer Kobe Steel and Tokyo-based Mitsui & Company are able to achieve the final investment decision on a preliminary agreement they signed in April last year to develop a low-carbon iron metallics project.

The two Japanese firms agreed to conduct a detailed business study in line with the goal of commencing low-carbon dioxide iron metallics production by 2027. The project is expected to produce 5 million t/y of DRI using a process called Midrex, where DRI is produced from iron ores through a natural gas or hydrogen-based shaft furnace.

Green steel producers in the sultanate could benefit from cheap, locally-available green hydrogen feedstock if the Amnah consortium – which won the first land block contract that Hydrogen Oman (Hydrom) auctioned last year – achieves the financial investment decision on its planned project by 2026.

The estimated $6bn-$7bn project will supply green hydrogen to domestic and overseas steel producers, Amnah project director Mark Geilenkirchen told MEED last year.

The planned integrated facility is expected to have a capacity of 220,000 t/y of green hydrogen and will require up to 4.5GW of renewable energy capacity. Unlike other projects in the region that aim almost exclusively to export their green hydrogen derivative products such as ammonia, Amnah is considering converting or using green hydrogen to support sustainable steel production.

https://image.digitalinsightresearch.in/uploads/NewsArticle/12176557/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Dubai advances Auto Market construction

    6 May 2026

     

    The construction works on the Dubai Auto Market, which is set to become one of the world’s largest and most advanced automotive trading hubs, are progressing.

    Enabling works are under way, being carried out by local contractor Rad International Road Construction.

    US-based engineering firm Aecom is serving as the project consultant.

    In November last year, Dubai Municipality signed a partnership agreement with DP World’s Economic Zones division to establish and manage the market, as MEED reported. Under the agreement, DP World will provide integrated logistics and zone management services, including e-commerce and trade finance solutions.

    The Dubai Auto Market will span a 22 million-square-foot complex, to be developed by DP World. It is planned to include more than 1,500 showrooms, clustered workshop zones, warehouses and multi-storey parking facilities, alongside a convention centre, hotel, auction house, retail outlets, and food and beverage areas.

    The facility is designed to handle more than 800,000 vehicles a year, including new and used electric, hybrid and conventional models.

    The UAE’s construction industry is projected to expand by 5% in real terms in 2026, supported by rising foreign direct investment (FDI), growth in the construction sector and increased oil sector activity.

    According to the UAE’s Federal Competitiveness and Statistics Centre, construction value added rose by 8.8% year on year (YoY) in Q2 2025, following YoY growth of 7% in Q1 2025 and 10.8% in Q4 2024.

    The commercial construction sector is forecast to grow by 6.4% in 2026 and to record average annual growth of 4.9% from 2027 to 2030, supported by investment in tourism and hotel facilities.

    The industrial construction sector is expected to expand by 4.1% in real terms in 2026, then to average 4.4% annually from 2027 to 2030, supported by improved investment in manufacturing facilities.

    The infrastructure construction sector is projected to grow by 5.8% in real terms in 2026, before averaging 4.3% annual growth from 2027 to 2030, supported by the government’s focus on improving regional connectivity through road and rail development.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16700367/main.png
    Yasir Iqbal
  • Saudi Arabia extends bid deadline for solar projects

    6 May 2026

     

    Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), has extended the deadline for developers bidding for four solar projects under the seventh round of the National Renewable Energy Programme (NREP).

    Round seven of the NREP comprises solar photovoltaic (PV) and wind independent power producer (IPP) projects with a combined capacity of 5,300MW. The renewables programme is being led and supervised by the Ministry of Energy.

    The four solar PV projects comprise:

    • 1,400MW Tabjal 2 solar PV IPP (Tabrijal, Al-Jouf province)
    • 600MW Mawqqaq solar PV IPP (Mawqqaq, Hail province)
    • 600MW Tathleeth solar PV IPP (Tathleeth, Aseer province)
    • 500MW South Al-Ula solar PV IPP (Al-Ula, Medina province)

    The projects were tendered in January, with an initial bid submission deadline of 30 April.

    The new deadline is 30 June.

    The solar projects are the latest in a string of large-scale power and water developments across the region to have bidding extended in recent weeks.

    In the UAE, the bid deadline for the seventh phase of Dubai Electricity & Water Authority’s Mohammed Bin Rashid Al-Maktoum Solar Park was recently pushed back to 1 July. 

    Bids for the 1,300MW Bilgah and 900MW Shagra wind IPPs are currently still due by 14 May, according to a source.

    In January, MEED reported that 16 developers qualified to bid as both managing and technical members for the four solar PV projects under the seventh round of the NREP.

    These include:

    • Abu Dhabi Future Energy Company (Masdar) 
    • Alfanar Company (Saudi Arabia)
    • Al-Gihaz Holding Company (Saudi Arabia)
    • EDF Power Solutions (France)
    • Kahrabel (Engie) (UAE / France)
    • Sembcorp Utilities (Singapore)
    • Jinko Power (HK) (China)
    • TotalEnergies Renewables (France)
    • Al-Jomaih Energy & Water (Saudi Arabia)
    • Korea Electric Power Corporation (Kepco) (South Korea)
    • Nesma Renewable Energy (Saudi Arabia)
    • Korea Western Power (South Korea)
    • Marubeni Corporation (Japan)
    • SPIC Shanghai Electric Power (China)
    • WahajPeak Holdings (Saudi Arabia)
    • FAS Energy for Trading Company (Saudi Arabia)

    A further six companies qualified to bid as a managing member only for the solar PV projects. These include:

    • Saudi Electricity Company (Saudi Arabia)
    • Grupo Empresarial Enhol (Spain)
    • Power Construction Corporation of China (Power China) (China)
    • GD Power Development (China)
    • Gulf Development Public Company (Thailand)
    • Reliance NU Energies Private (India)

    The renewable energy programme aims to supply 50% of the kingdom’s electricity from renewable energy by 2030.

    Earlier rounds under the NREP have already put in place large capacities. Last October, SPPC awarded contracts to develop and operate five renewable energy projects under round six of the NREP.

    These comprise four solar PV IPP projects and one wind IPP project with a total combined capacity of 4,500MW.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16700361/main.jpg
    Mark Dowdall
  • EtihadWE awards EPC contract for Fujairah IWP

    6 May 2026

    Etihad Water & Electricity (EtihadWE) has awarded an engineering, procurement and construction (EPC) contract for the Fujairah 1 independent water producer (IWP) project.

    The agreement was signed with a consortium of UAE-based NMDC Infra and Spain’s Lantania Aguas. 

    The EPC works will be delivered by Lantania NMDC Water. The company was formed after NMDC Infra acquired a 51% stake in Lantania Aguas in January 2026.

    Fujairah 1 is the second desalination project procured by EtihadWE under a public-private partnership (PPP) model. It follows the 150-million-imperial-gallon-a-day (MIGD) Naqa’a IWP in Umm Al-Quwain.

    The project involves developing a 60 MIGD seawater reverse osmosis (SWRO) desalination plant. The total investment is valued at AED1.046bn ($285m), the utility said in a statement.

    The plant will be located at the Port of Fujairah on the Gulf of Oman and will include storage capacity equivalent to 18 hours of production.

    Construction is expected to take about 30 months. Initial operations will begin at partial capacity, followed by ramp-up to full output.

    Details of the water offtake agreement for Fujairah 1 have not been disclosed. EtihadWE previously signed a 35-year water-purchase agreement for the Naqa’a project.

    Mohammed Al-Shehhi, CEO of the development and investment arm of EtihadWE, said the company is “currently developing multiple SWRO projects to be announced in due course”.

    In January, Dubai International Financial Centre-based Deloitte Professional Services submitted the lowest bid for a contract to provide consultancy services to Dubai Electricity & Water Authority (Dewa) and EtihadWE.

    The contract scope includes conducting a pre-feasibility study for an SWRO IWP and water transmission pipelines project.

    The study will assess potential project sites, optimal plant capacity, technical and commercial parameters and the viability of associated water transmission infrastructure.

    According to a source, the study’s consultant has not yet been appointed.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16700218/main.jpg
    Mark Dowdall
  • June deadline for Riyadh section of Saudi Landbridge

    6 May 2026

     

    Saudi Arabia Railways (SAR) has set a 2 June bid submission deadline for a design-and-build contract to construct the Riyadh Rail Link, a new railway line running north to south across Riyadh.

    The tender was issued on 29 January. The previous bid submission deadline was 29 April.

    The scope of work includes constructing a 35-kilometre-long double-track railway line connecting SAR’s North-South railway to the Eastern railway network.

    The contract also covers the procurement, construction and installation of associated infrastructure such as viaducts, civil works, utility installations, signalling systems and other related works.

    The project is expected to form a key component of the Saudi Landbridge railway.

    In January, SAR said it would deliver the Saudi Landbridge project through a “new mechanism” by 2034, after failing to reach an agreement with a Chinese consortium to construct it, as MEED reported.

    In an interview with local media, SAR CEO Bashar Bin Khalid Al-Malik said the consortium failed to meet local content requirements and that the project would now be delivered in several phases under a different procurement model.

    The project has been under negotiation between Saudi Arabia and China-backed investors keen to develop it through a public-private partnership.

    Al-Malik said that the project cost is about SR100bn ($26.6bn).

    It comprises more than 1,500km of new track. The core component is a 900km new railway between Riyadh and Jeddah, which will provide direct freight access to the capital from King Abdullah Port on the Red Sea.

    Other key sections include upgrading the existing Riyadh-Dammam line, a bypass around the capital called the Riyadh Link, and a link between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. Plans to develop it were first announced in 2004, but put on hold in 2010 before being revived a year later. Key stumbling blocks were rights-of-way issues, route alignment and its high cost.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16698846/main.jpg
    Yasir Iqbal
  • Bid deadline extended for Kuwait oil pipeline

    6 May 2026

    State-owned upstream operator Kuwait Oil Company (KOC) has extended the bid deadline for a project to develop a crude oil pipeline in the country.

    The invitation to bid was originally tendered in October last year, with a bid deadline of 18 January 2026.

    Since then, the deadline has been extended several times, and the latest announced bid deadline is 31 May 2026.

    The new pipeline will have a diameter of 20 inches and will carry the crude oil blend known as Ratawi-Burgen.

    The project scope will involve replacing a 30-kilometre section of the pipeline known as CR-058.

    The pipeline originates from the Wafra field and feeds crude oil into the larger 36-inch CR-088 crude oil pipeline.

    The pipelines on this network have had documented corrosion issues in the past, which were linked to slow flow rates within the pipelines.

    The Wafra field is located in the Partitioned Zone between Kuwait and Saudi Arabia.

    Both countries equally share the natural resources contained in this region.

    Kuwait is currently pushing to increase its oil production capacity.

    In 2024, Kuwait Petroleum Corporation’s chief executive, Sheikh Nawaf Al-Sabah, reiterated that his company plans to increase Kuwait’s oil production capacity to 4 million barrels a day (b/d) by 2035.                             

    In September last year, Kuwaiti Oil Minister Tareq Al‑Roumi announced that the country’s oil production capacity had reached 3.2 million b/d, its highest level in more than 10 years.

    Kuwait had a similar capacity in the late 2000s, peaking at a recorded 3.3 million b/d in 2010.

    Since the US and Israel’s attack on Iran on 28 February, Kuwait’s oil and gas sector has been rocked by the disruption to shipping through the Strait of Hormuz, through which all of the country’s crude is normally exported.

    Kuwait recorded zero crude oil exports in April for the first time since the end of the Gulf War in 1991, according to shipping monitor TankerTrackers.com.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16691664/main5905.jpg
    Wil Crisp