Algoma Steel has begun producing green steel using an electric arc furnace

The company views the production from its first-of-its-kind electric arc furnace, launched last month, as a significant victory in the face of an existential threat posed by US tariffs.

Algoma CEO Michael Garcia stated in a recent earnings call, "We have reached a truly significant milestone for Algoma and the Canadian steel industry. Despite the uncertainty created by the trade war, this success reinforces our confidence in our transformation strategy.” As part of this strategy, the company aims to significantly reduce emissions to differentiate its products. In this regard, it has registered the “Volta” brand for clean steel produced from a low-emission iron ore and scrap metal blend.

Experts emphasize that the green steel market faces uncertainty due to high upfront investment requirements, customs duties, and price pressures. Chris Bataille of Columbia University's Center on Global Energy Policy stated, “The question is: Will there be sufficient demand for green steel in North America?” Bataille noted that the US had gained momentum in transformations such as electric vehicles and clean steel during the previous administration, but that the opposite trend had been observed in recent times.

Recalling that the use of coal in steel production leads to high carbon emissions, Bataille stated that, according to International Energy Agency data, global steel production accounts for approximately 8% of global carbon emissions. However, he said that despite the environmental benefits, the automotive sector is at the forefront of buyers willing to pay a premium for more environmentally friendly steel. He noted that in Europe, car manufacturers pay up to 40% more for clean steel due to its marketing advantage and low cost impact, while the construction sector is cautious.

Trade expert Tommaso Ferretti noted that there is structural demand in Europe, where Canada seeks to diversify its exports, but tariffs are causing disruptions in this market as well. Ferretti, from the Telfer School of Business at the University of Ottawa, commented, “There is structural demand in Europe, but the extent to which this demand will continue is a big question mark.”