Canada and the European Union stand to benefit from a renewed focus on "green steel," an emerging sector that could transform the traditional iron and steel value chain and significantly reduce industrial carbon emissions, according to experts and industry observers.
Currently, Canada primarily exports raw iron ore, while Europe processes the ore into iron and steel using methods that rely heavily on coal, contributing nearly two tonnes of CO2 per tonne of steel produced. This conventional process is a major source of industrial emissions in Europe. However, green steel offers a potential shift toward sustainability by decoupling ironmaking and steelmaking, allowing each stage to occur in locations best suited for low carbon output.
Canada, with its abundant renewable energy resources, is well positioned to produce "green iron" cleanly, reducing the carbon footprint associated with the initial ironmaking phase. By converting its iron ore into iron briquettes suitable for shipping, Canada could supply Europe with the raw material needed for steel production, enabling lower-emission steel manufacturing on the continent. This approach could also preserve jobs in European steelmaking and downstream manufacturing sectors, providing an environmentally responsible alternative to current practices.
The concept requires significant long-term investment and coordination between Canada and the EU to establish demand in Europe and develop sustainable supply capabilities in Canada. It represents a fundamental restructuring of the steel industry's value chain, moving beyond existing trade disputes, such as Canadian tariffs on European nails, which have minor economic impact in comparison.
Mark Carney, the former Bank of England governor and current government adviser, has sought to promote such green industrial initiatives, but has faced challenges in accelerating green transitions within Canada’s mining and industrial sectors. Both Canadian and European authorities emphasize goals of economic resilience and strategic autonomy, which proponents argue could be advanced through a cooperative green steel partnership.
Observers say embracing this partnership could shift focus away from smaller trade irritants toward a substantial opportunity for industrial decarbonization and economic modernization. Such collaboration could lay the groundwork for a competitive, low-emission steel industry bridging North America and Europe, aligning with broader climate targets and industrial policies on both sides of the Atlantic.