Voestalpine’s Green Steel Plant Takes Shape as Trade Winds Shift

Voestalpine finishes building electric arc furnace hall in Linz, targeting 2.5M tonnes of CO?-reduced steel by 2029, as EU carbon tariffs boost competitiveness.

The steelmaker’s 1.5-billion-euro transformation is moving from blueprint to reality. Walls now stand at the new electric arc furnace hall in Linz, marking the end of the construction phase and the start of equipment installation. Engineers will next fit the facility with handling systems for hot briquetted iron (HBI), the raw material set to replace coal in the production process.

Two furnaces are planned: the first in Linz is scheduled to begin operations in February 2027, followed by a second unit in Donawitz. Together, they are expected to produce around 2.5 million tonnes of CO?-reduced steel annually, cutting the group’s emissions by nearly a third by 2029. Voestalpine will source the necessary HBI from a Texas plant in which it holds a stake.

The timing of the ramp-up coincides with a shifting regulatory landscape. In Europe, the EU’s carbon border adjustment mechanism is making Asian steel imports noticeably more expensive. Mid-April saw Brussels tighten the screws further: duty-free quotas have been slashed, and punitive tariffs above those thresholds will double to 50 percent from summer. That gives low-emission producers like Voestalpine a clear pricing edge at home.

Across the Atlantic, the picture is less favourable. US trade policy is taking a direct toll on the group’s tubulars division, which sells seamless pipes into North America. Combined with depressed oil prices, the higher duties are expected to cost the company up to 80 million euros in earnings. CEO Herbert Eibensteiner has also flagged a structural bottleneck closer to home: the lack of sufficiently sized electricity and hydrogen grids to replace the traditional blast furnaces.

Despite these headwinds, the underlying business is providing a solid platform for the transition. In the first three quarters of the current financial year, operating profit reached one billion euros. Net debt has been trimmed significantly to 1.4 billion euros, even as the company pours capital into its green overhaul. The market took note: shares jumped 3.9 percent to 42.60 euros in Wednesday trading, with technical indicators suggesting the stock had been heavily oversold.

Management will open the books fully on 3 June, when it presents the annual report for the past fiscal year. The board is sticking to its full-year guidance of operating earnings between 1.4 billion and 1.55 billion euros. Analysts will be watching two metrics closely: utilisation rates at the new facilities and demand forecasts for the machinery and construction sectors. A month later, the annual general meeting is scheduled, where the company’s plan to link future dividend payments more tightly to its leverage ratio is likely to draw scrutiny.