Global energy and commodity price reporting agency Argus has launched a series of cost indexes that bring transparency to the process of creating "green steel" in Europe.

Steel, a common alloy of iron, is an indispensable foundation of modern life — yet the sector accounts for 8% of global carbon emissions. The majority of these occur as part of the ironmaking phase, which historically has involved the use of fossil fuels, usually coal, to 'reduce' the oxides and remove impurities found in naturally occurring iron ore.

Today, most primary steel that is not made from recycled scrap is made from iron produced in a coal-fired blast furnace. A far smaller share of global ironmaking is done using the direct reduction process, a much less carbon-intensive process that can use methane as the reducing agent. Methane itself has a not insignificant carbon footprint, but can be substituted with "green" hydrogen produced using renewable energy. The output is carbon-free directly reduced iron (DRI), which can be smelted into "green" steel in an electric arc furnace, if that in turn is powered by renewable electricity.

While there are a range of technologies to reduce emissions in the iron and steelmaking process, direct reduction using zero-carbon hydrogen is currently the most technologically viable route to emission-free steelmaking.

The new Argus Green DRI indexes show the theoretical cost of this process in northern Europe, drawing on Argus assessments of the price of iron ore, energy and hydrogen production costs in the region. They will be published weekly alongside costs for natural gas-based DRI, allowing direct comparison between green and non-green steelmaking feedstocks — including hydrogen made with fossil fuels.