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Is it wise to invest in green steel in the Netherlands?

The debate on green steel has become strikingly sharp in recent months. Not only in politics, but particularly among economists and other scholars. In a blog on ESB, 117 economists argued against government support for more sustainable steel production in the Netherlands. According to them, public funds could be spent more effectively elsewhere. A group of scientists responded with a counterargument, advocating investment instead. This sense of nuance is also shared at the University of Twente, says Professor of Nonlinear Solid Mechanics Ton van den Boogaard.

Photo of Robin Kwakman
Robin Kwakman
Molten steel flowing from an industrial furnace

Why steel will remain a key material

“Steel is an enormously important material for society,” says Van den Boogaard. “And that will not change over the next hundred years.” Steel is essential to the energy transition, for example in wind turbines, high-voltage pylons and infrastructure. It is also used in vehicles, appliances and industrial machinery.

Moreover, steel is not a single, uniform material. There are countless grades, which continue to evolve. “The idea that steel is a ‘finished’ material is simply untrue,” Van den Boogaard explains. “There is still a great deal of innovation happening, especially in high‑quality steel grades.”

Pollution is undeniable and must be reduced

Steel production currently causes substantial CO₂ emissions and other harmful pollutants, with direct consequences for the health of nearby residents. Van den Boogaard knows this impact first-hand. “I grew up near Tata. From my bedroom I could see the polluted air.”

Although the situation has improved significantly over recent decades, he stresses that this is still not enough. This is precisely why he argues for targeted investments in greening. “If you really want to achieve climate impact, you have to look at the major polluters. That’s where the biggest gains can be made.”

Why relocation is not a simple solution

The economists suggest that steel production could be relocated to countries with lower costs. Van den Boogaard sees this as an oversimplification. “From an ethical point of view, that’s questionable,” he says. “You don’t solve the problem by exporting polluting production to another country and then importing the steel back again.”

Strategic interests also play a role. Europe wants to be less dependent on other parts of the world for essential materials. “In times of crisis, you want to be able to produce locally,” Van den Boogaard argues. “Steel is simply part of that.”

Green steel requires collaboration across the entire chain

The National Growth Fund programme Groeien met Groen Staal (Growing with Green Steel) brings together economists, engineers and public administration scholars. According to Van den Boogaard, this is necessary because sustainability goes beyond technology alone. “It’s about entire production chains: suppliers, Tata itself and customers. All those links have to be involved and benefit from the transition.”

The ultimate goal is a circular steel industry, in which scrap steel is reused while maintaining quality. This requires smart supply chain management, clear agreements and, at times, government steering. “Without those boundary conditions, such a circular system will grind to a halt.”

Groeien met Groen Staal is a consortium of 31 partners, including the University of Twente. At its core is the development of a range of technologies based on hydrogen, renewable energy and circular iron and steel processing. The programme aims to transform the entire steel cycle in the Netherlands, with the ultimate goal of a CO₂‑neutral steel sector by 2050. In addition to the technologies needed to develop green steel, the researchers also explore effective pathways for the transition to a new ecosystem.

Circular steel requires different technology

Circular steel is technically more complex than primary steel. Its composition is less predictable, which affects manufacturing processes at customers’ facilities. “Sometimes the steel is just slightly weaker,” Van den Boogaard explains. “Then you have to adjust the production process.”

This may mean, for example, setting industrial presses slightly differently, applying just a bit more force. Thanks to models, sensors and data, this can be done with increasing precision. “You measure what happens and correct it immediately. That’s what smart, digital industry is all about.”

More than just technology

According to Van den Boogaard, the debate on green steel touches on broader questions: industrial policy, strategic autonomy and the role of government. “Ultimately, this is also a political game,” he says. “But one with major consequences for the future of our industry.”

The key question, therefore, is not only whether the Netherlands should invest in green steel, but above all how thoughtfully and consistently this is done — and what role science dares to take in that process.

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