Voestalpine's Green Steel Transformation Reaches Key Milestone

Voestalpine begins building its first electric arc furnace in Linz, a €1.5B decarbonization move backed by strong profits and EU carbon tariffs.

Austria's largest climate protection initiative is moving from blueprint to reality. Voestalpine has entered the operational phase of its landmark Greentec-Steel program, with the construction of its first electric arc furnace now underway in Linz. This pivot away from traditional blast furnaces represents the core of the company's strategy to decarbonize steel production.

Financial Foundation and Regulatory Tailwinds

The ambitious 1.5 billion euro transformation is underpinned by robust financial health. For the first three quarters of the 2025/26 fiscal year, Voestalpine reported a 20.9% increase in EBIT to 473 million euros. Pre-tax profit surged by an even more substantial 46.5%. Concurrently, net debt was reduced by 27.4% to 1.4 billion euros. Management has reaffirmed its full-year EBITDA guidance, projecting a result between 1.4 and 1.55 billion euros.

Structurally, the company stands to benefit significantly from the European Union's Carbon Border Adjustment Mechanism (CBAM), which has been fully in force since January 2026. This policy is estimated to increase the cost of steel imports from regions like China and Turkey by 40 to 70 euros per tonne, creating a direct competitive advantage for European manufacturers. From July 2026, import quotas are set to be halved and tariffs on exceeding volumes doubled, a move expected to further solidify this position.

The Roadmap to 2027 and Beyond

The construction timeline is now firmly established. The main hall structure for the new electric arc furnace (EAF) steel plant is scheduled for completion in April 2026. Commissioning of the furnace itself is targeted for February 2027. The program's central objective is to reduce CO? emissions by approximately 30% by 2029, equating to nearly 4 million tonnes annually. This reduction represents just under 5% of Austria's total national emissions.

Parallel Projects: Logistics and Hydrogen Innovation

Alongside the primary facility, work on critical supporting infrastructure will commence in spring 2026 with the installation of conveyor technology for the HBI supply system. The first EAF will require roughly 450,000 tonnes of this input material each year. The majority will be sourced from Texas, transported by sea to Koper, Slovenia, and then shipped by rail to Linz.

In a complementary pioneering effort, Voestalpine is advancing the "Hy4Smelt" project in partnership with Primetals Technologies and Rio Tinto. This venture, involving an investment of about 170 million euros, will establish the world's first industrial-scale demonstration plant combining hydrogen-based direct reduction with an electric smelting process.