Top 10 Green Hydrogen DRI Plants: SSAB’s $500 M DOE Grant and Arcelor Mittal’s 2.3 Mtpa Project (2024 to 2026)

The global steel industry is advancing from pilot programs to commercial-scale green steel production, fueled by significant government policy and a strategic race to decarbonize. The primary challenge remains the economic viability of the “green premium, ” the added cost for low-carbon steel. This premium is estimated at $150 to $300 per ton for steel made with green hydrogen Direct Reduced Iron (DRI) compared to natural gas-based methods. The dominant theme for 2025 is bridging this cost gap, with pivotal developments like the U.S. Department of Energy’s allocation of up to $1 billion for two DRI projects and the EU’s Carbon Border Adjustment Mechanism (CBAM) set to reshape market economics starting in 2026. While the impact on final consumer goods like cars and buildings is projected to be less than a 1% price increase, market resistance to paying this premium, particularly in the U.S., presents a significant hurdle for producers.

1. Stegra (formerly H 2 Green Steel)

Company: Stegra
Capacity: 2.5 Mtpa
Application: Green Hydrogen DRI-EAF, powered by a 690 MW electrolyzer.
Source: STEGRA: welcoming a new era of green steel production

2. Arcelor Mittal DRI Facility

Company: Arcelor Mittal
Capacity: 2.3 Mtpa
Application: Hydrogen-ready DRI plant aiming for 100% green hydrogen by 2027.
Source: Transition to green steel in Europe: what went wrong? – GMK Center

3. Vulcan Green Steel

Company: Vulcan Green Steel
Capacity: 5.0 Mtpa (HBI/DRI)
Application: Hydrogen-ready DRI plant supplied by Danieli and Tenova.
Source: [PDF] IEEFA report_Oman at the frontline of the green steel …

4. Jindal Steel & Power (Jindal Shadeed)

Company: Jindal Steel & Power
Capacity: 5.0 Mtpa (HBI/DRI)
Application: Second hydrogen-ready DRI plant.
Source: [PDF] IEEFA report_Oman at the frontline of the green steel …

5. SSAB Green Hydrogen DRI Plant

Company: SSAB
Capacity: TBD
Application: First commercial-scale U.S. facility using 100% green hydrogen for DRI production.
Source: US pledges up to $1 B for two pioneering ‘green steel’ projects

6. Cleveland-Cliffs H 2-Ready DRI Plant

Company: Cleveland-Cliffs
Capacity: TBD
Application: New hydrogen-ready DRI plant supported by up to $500 million from the U.S. DOE.
Source: US pledges up to $1 B for two pioneering ‘green steel’ projects

7. Thyssenkrupp DR Plant

Company: Thyssenkrupp
Capacity: 2.5 Mtpa
Application: Germany’s largest direct reduction plant, aiming to reduce emissions by 30%.
Source: [PDF] International Iron Ore and Green Steel Summit 2025. Conference …

8. Hydnum Steel

Company: Hydnum Steel
Capacity: 2.6 Mtpa
Application: Green hydrogen-based steel production with an initial €1.65 billion investment.
Source: Meet the green technologies set to transform the geopolitics of …

9. Salzgitter AG (SALCOS®)

Company: Salzgitter AG
Capacity: 1.9 Mtpa
Application: Transition to hydrogen-based DRI supported by a 100 MW electrolysis plant.
Source: electrolysis – EUROMETAL

10. Baosteel Zhanjiang DRI Plant

Company: Baosteel
Capacity: TBD
Application: DRI plant using refined coke oven gas containing over 60% hydrogen as a transitional step.
Source: China’s greener steelmakers spread overseas

Table: Top 10 Green Steel DRI Projects (2026 Outlook)

Green Steel Adoption, Automotive and Construction Demand Drives Offtake Agreements

The transition to green steel is heavily reliant on securing demand from carbon-conscious buyers, primarily in the automotive and construction sectors. These giga-scale projects require massive upfront capital, and long-term offtake agreements are essential to de-risk investments and guarantee a market for the higher-priced product. The willingness of end-users to absorb the green premium is a critical factor. While analysis shows the final cost impact on a car or building is negligible—less than 1%—the initial sticker shock at the raw material level is a barrier. For example, as of August 2024, no domestic premium had been paid for green steel in the U.S., signaling significant market resistance. This contrasts with other markets, like Australian aluminum, where customers were reportedly paying a 5% premium for low-carbon products, indicating that regional dynamics and corporate sustainability goals heavily influence market acceptance.

Automotive and Construction Demand Drive Adoption

This chart identifies key market drivers, highlighting growth in the automotive and construction industries as a major opportunity, which directly supports the section’s focus on offtake agreements from these sectors.

(Source: Coherent Market Insights)

Europe vs. USA vs. MENA, SSAB Leads US Push with $500 M Grant

A clear geographical divergence is emerging in the green steel landscape. Europe, with projects like Stegra in Sweden, Salzgitter in Germany, and Arcelor Mittal in Spain, is an early leader driven by ambitious climate targets and the impending CBAM. However, these projects face challenges related to high renewable energy costs. In contrast, the United States is rapidly accelerating its position through decisive industrial policy. The Department of Energy’s commitment of up to $1 billion for projects by SSAB and Cleveland-Cliffs is a direct catalyst. Meanwhile, the MENA region, particularly Oman, is positioning itself as a future global hub for green iron production. Projects from Vulcan Green Steel and Jindal Steel & Power leverage the region’s potential for low-cost solar energy to produce green hydrogen, aiming to export cost-competitive green Hot Briquetted Iron (HBI) to industrial centers in Europe and Asia.

Stegra’s 690 MW Electrolyzer Signals Giga-Scale Hydrogen DRI Maturity (2026)

The planned installations reveal two distinct strategic pathways reflecting the sector’s technological maturity. The first is the “pure-play” greenfield model, exemplified by Stegra (formerly H 2 Green Steel). This approach involves building a fully integrated, giga-scale production facility from the ground up, complete with massive dedicated electrolyzer capacity (690 MW). This allows for optimized, purpose-built infrastructure but requires immense capital and longer lead times. The second pathway is the retrofitting model pursued by incumbents like Arcelor Mittal and Thyssenkrupp. They are leveraging existing plant footprints to install “hydrogen-ready” DRI units, which can initially operate on natural gas and transition to green hydrogen as it becomes available and cost-effective. This phased approach reduces initial capital expenditure and accelerates decarbonization timelines. Projects like Baosteel’s use of hydrogen-rich coke oven gas represent a third, transitional step, highlighting how operators are using available resources to lower carbon intensity incrementally.

$1 B in US Funding, Green Steel’s Green Premium Cost Challenge

The single most critical factor for the green steel market through 2026 will be the reconciliation of production costs with market prices. The green premium’s future is tied directly to the cost of green hydrogen and the strength of carbon pricing policies. If the cost of green hydrogen falls towards the $1.3/kg target, the premium could be eliminated, making hydrogen-based DRI steel cost-competitive with conventional methods. Watch these signals closely:

• Gaining Traction: Government-backed industrial policy is proving to be the most powerful catalyst. The $500 million grants for both SSAB and Cleveland-Cliffs in the U.S. are directly accelerating commercial-scale deployment and creating a domestic supply chain.
• Losing Steam: Voluntary market adoption of the green premium is facing headwinds. Reports from mid-2024 indicate that U.S. buyers are not yet willing to pay more for green steel, citing already high baseline prices. This reluctance could delay investment decisions for projects without government subsidies.
• Potential Disruption: The enforcement of the EU’s Carbon Border Adjustment Mechanism (CBAM) in 2026 is a pivotal event. By placing a cost on the carbon content of imported steel, it will create a protected, high-value market for European green steel producers and financially penalize carbon-intensive production methods.

Green Premium Hinges on Hydrogen Cost

This chart perfectly matches the section by showing how the ‘green premium’ for steel is highly dependent on the cost of hydrogen, visually explaining the core cost challenge discussed.

(Source: Transition Asia)

The questions your competitors are already asking

This report covers one angle of the transition to commercial-scale green steel DRI. The questions that matter most depend on your work.

• Which steelmakers like ArcelorMittal and SSAB are gaining or losing ground in the race to commercialize green hydrogen DRI?
• What is the outlook for green hydrogen DRI deployment by 2026, considering the EU’s Carbon Border Adjustment Mechanism (CBAM)?
• What is the actual cost breakdown of the ‘green premium’ for steel made with green hydrogen DRI versus natural gas-based methods?

This report does not answer these. Enki Brief Pro does.

Your question, your angle, your framework. SWOT, PESTL, scenario modelling. The same niche depth, built around the decision your work actually depends on.

Run your first brief in Enki Brief Pro