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.
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
Local contractor wins $143m Jeddah sewage contracts19 February 2026
-
Saudi Arabia prequalifies firms for gas transmission grids19 February 2026
-
SAR tenders phosphate rail project management deal18 February 2026
-
Veolia wins Jordan water services contract18 February 2026
-
PIF-backed firm signs worker accommodation deal17 February 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Local contractor wins $143m Jeddah sewage contracts
19 February 2026
Register for MEED’s 14-day trial access
Saudi Arabia’s National Water Company (NWC) has awarded two sewage network contracts worth a combined SR536.3m ($143m) to local contractor Civil Works Company.
The projects will be implemented over 32 months from site handover and will serve northern Jeddah districts.
The first contract, valued at SR278.5m ($74.3m), covers incomplete main lines and secondary sewage networks serving parts of the Al-Bashair, Al-Asala and Al-Falah neighbourhoods.
The scope includes pipelines ranging from 200mm to 800mm in diameter with a total length of about 54.8 kilometres (km).
The package also includes sewage tunnels with diameters ranging from 600mm to 1,800mm and a total length of approximately 6.5km. Works will also serve the Taybah, Abhar Al-Shamaliyah and Al-Hamdaniyah districts.
The second contract is valued at SR257.8m ($68.8m). It covers the implementation of main lines and sub-networks to serve part of the Al-Hamdaniya neighbourhood.
The works include pipelines ranging from 200mm to 1,500mm in diameter with a total length of about 78.5km. The scope also includes horizontal drilling works for sewage tunnels with diameters from 1,200mm to 1,400mm and a total length of approximately 205 metres.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15699620/main.jpg -
Saudi Arabia prequalifies firms for gas transmission grids
19 February 2026
Register for MEED’s 14-day trial access
Saudi Arabia's Energy Ministry has prequalified companies to develop natural gas distribution networks in five industrial cities in the kingdom on a build-own-operate (BOO) basis.
The industrial zones earmarked are Al-Kharj Industrial City; Sudair City for Industry and Business; and the First, Second and Third Industrial Cities in Jeddah, the Energy Ministry said in a statement.
The contractors prequalified to bid for the natural gas transmission grids BOO scheme include eight standalone firms and seven consortiums:
- East Gas (Egypt)
- Natural Gas Distribution Company (Saudi Arabia)
- Egyptian Kuwaiti Advanced Operation and Maintenance (Saudi Arabia)
- Modern Gas (Egypt)
- Saab Energy Solutions (Saudi Arabia)
- Sergas Contracting (Saudi Arabia)
- Bharat Petroleum Corporation (India)
- UniGas Arabia (Saudi Arabia)
- Best Gas Carrier / Khazeen / Mubadra (Saudi Arabia)
- Al Sharif Contracting (Saudi Arabia) / Anton Oilfield Services Group (China) China Oil and Gas Group
- Hulul (owned by Saudi Arabia’s National Gas and Industrialization Company) /Al-Fanar Gas Group (UAE)
- Indraprastha Gas (India) / Masah Contracting (Saudi Arabia)
- Expertise Contracting / PGL Pipelines (UK)
- National Gas Company (Egypt) / Egypt Gas (Egypt)
- Taqa Arabia (Egypt) / Taqa Group (UAE)
The Energy Ministry has set a deadline of 23 April for these prequalified contractors to submit technical bids.
The ministry added in its statement that it has identified a total of 36 industrial cities in Saudi Arabia for gas infrastructure development.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15699582/main0334.png -
Veolia wins Jordan water services contract
18 February 2026
Register for MEED’s 14-day trial access
France's Veolia has signed a four-year performance-based management contract with the Water Authority of Jordan to support water and wastewater services in the country’s northern governorates.
Under the contract, Veolia will provide operations, maintenance and management services to Yarmouk Water Company, the public utility responsible for water supply and wastewater services in the region.
The agreement covers Irbid, Jerash, Ajloun and Mafraq, an area spanning nearly 30,000 square kilometres and covering about 3 million people.
The scope includes water and wastewater operations, maintenance, billing and collection, and customer service.
According to the firm, the performance-based structure prioritises measurable improvements, including service delivery, cost efficiency and revenue management.
The company said it will deploy technical and management specialists to support operations, rehabilitation works and investment initiatives.
The contract builds on Veolia’s existing operational role in Jordan’s water sector. The company operates the Disi-Amman scheme, which supplies about 100 million cubic metres of drinking water a year, under an operations and maintenance contract.
It also operates the Al-Samra wastewater treatment plant, which produces about 133 million cubic metres of treated wastewater annually for agricultural reuse.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15684109/main0535.jpg -
SAR tenders phosphate rail project management deal
18 February 2026
Register for MEED’s 14-day trial access
Saudi Arabian Railways (SAR) has floated another tender inviting firms to bid for a contract covering the project management consultancy services for its Phosphate 3 rail programme.
The tender was issued on 15 February with a bid submission deadline of 5 April.
The contract duration is 54 months.
The latest tender follows SAR floating a multibillion-riyal tender to double the tracks on the existing phosphate transport railway network connecting the Waad Al-Shamal mines to Ras Al-Khair in the kingdom’s Eastern Province.
The tender – covering the second section of the track-doubling works, spanning more than 150 kilometres (km) – was issued on 9 February. The bid submission deadline is 15 April.
Earlier this month, MEED reported that SAR received bids from contractors on 1 February for the project’s first phase, which spans about 100km from the AZ1/Nariyah Yard to Ras Al-Khair.
The scope includes track doubling, alignment modifications, new utility bridges, culvert widening and hydrological structures, as well as the conversion of the AZ1 siding into a mainline track.
The scope also covers support for signalling and telecommunications systems.
The tender notice was issued in late November with a bid submission deadline of 20 January.
Switzerland-based engineering firm ARX is the project consultant.
MEED understands that SAR is expected to tender a total of four packages for the phosphate railway line.
The other packages expected to be tendered shortly include the depot and the systems package.
In 2023, MEED reported that SAR was planning two projects to increase its freight capacity, including an estimated SR4.2bn ($1.1bn) project to install a second track along the North Train freight line and construct three new freight yards.
Formerly known as the North-South Railway, the North Train is a 1,550km-long freight line running from the phosphate and bauxite mines in the far north of the kingdom to the Al-Baithah junction. There, it diverges into a line southwards to Riyadh and a second line running east to downstream fertiliser production and alumina refining facilities at Ras Al-Khair on the Gulf coast.
Adding a second track and the freight yards will significantly increase the network’s cargo-carrying capacity and facilitate increased industrial production. Project implementation is expected to take four years.
State-owned SAR is also considering increasing the localisation of railway materials and equipment, including the construction of a cement sleeper manufacturing facility.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15684025/main.jpg -
PIF-backed firm signs worker accommodation deal
17 February 2026
Register for MEED’s 14-day trial access
Saudi Arabia's Smart Accommodation for Residential Complexes Company (Sarcc) has signed an agreement with Riyadh-based Mawref Company to develop a 12,000-bed worker accommodation project in North Riyadh.
The project will cover about 120,000 square metres (sq m), with a total built-up area of 150,000 sq m.
The development is expected to cost over SR669m ($178m), with the first phase slated for completion in 2029.
Sarcc is backed by the Public Investment Fund (PIF), the Saudi sovereign wealth vehicle.
The agreement follows Sarcc signing another agreement in September last year with privately-owned local firm Tamimi Global Company to explore collaboration in developing worker accommodation facilities in the kingdom.
The PIF launched Sarcc in October 2024 with the aim of developing and operating staff housing and accommodation assets in the kingdom.
Sarcc will develop and operate the staff accommodation facilities at major construction projects in Saudi Arabia.
The company will seek opportunities to invest in the sector to strengthen staff housing standards. Sarcc will also look to engage the private sector by enabling investment and partnership opportunities in sectors including construction, catering, transportation and retail.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15672262/main.gif