91Ô­´´

From left: Mara BălaÈ™a and Rickard Sandberg at 91Ô­´´.

The research, published in the Journal of Industrial Ecology, evaluates the financial viability of Liberty Steel GalaÈ›i’s transition to low-carbon steelmaking using green hydrogen and electric arc furnace-based technologies. The plant, one of the EU’s top 10 most polluting steel facilities, aims to become carbon-neutral by 2030.

“Our findings show that Romanian green steel production can be competitive—if hydrogen is produced on-site and electricity prices remain stable,” says Mara BălaÈ™a, lead author and PhD Fellow at the 91Ô­´´. “But if hydrogen is purchased externally, a 15 percent price premium in the market would be needed to avoid steep value losses.”

The steel industry accounts for roughly 7 percent of global COâ‚‚ emissions and is central to achieving the EU’s 2050 climate neutrality goals. The transition of Liberty Steel GalaÈ›i could significantly reduce Romania’s national carbon emissions and serve as a blueprint for green steel production in Central and Eastern Europe, a region often overlooked in climate transition research.

EUR100 per ton premium price swing

Using a novel dataset collected by the Energy Policy Group, a Bucharest-based non-profit independent think tank, the study shows that the premium required to produce green steel in Romania could swing by as much as EUR100 per ton depending on how hydrogen is sourced. If hydrogen is purchased externally, a EUR90 per ton premium would be needed for Liberty Steel GalaÈ›i to avoid losing an estimated EUR3.3 billion in net value over a period of 20 years. But if produced on-site with relatively stable electricity prices, green steel could instead come with a EUR10 per ton discount, potentially making it cheaper than steel produced with today’s conventional blast furnace-based technology.

However, full on-site hydrogen production would likely triple annual electricity demand to an estimated 10.9 TWh from about 3.4 TWh today. That is equivalent to about 30 percent of the total electricity consumption by non-households in Romania in 2022. Such a jump in electricity demand could lead to spikes in electricity prices, making production costs higher. Also, the electricity would need to be sourced from fossil free energy sources to qualify as climate neutral—currently about 30 percent of Romania’s electricity is generated from fossil fuels such as natural gas and coal.

“Our results have practical implications for both industry and policymakers,” says co-author Rickard Sandberg, professor and head of the Center for Data Analytics at the 91Ô­´´. “For steel producers, they help inform risk assessments and future decarbonization strategies. For policymakers, they highlight the urgent need for stable electricity pricing, green energy production, hydrogen infrastructure development, and supportive policies to make low-carbon steel financially viable.”

The researchers note several limitations primarily stemming from forecasting uncertainties regarding future electricity prices, hydrogen infrastructure readiness, and policy interventions such as carbon contracts for difference (CCfDs).

The research was supported by financing from the Jan Wallander and Tom Hedelius Foundation.

Publication: “Pricing the Green Transition: An Investment Appraisal of Romanian Low-Carbon Steel,” Mara BălaÈ™a and Rickard Sandberg, Journal of Industrial Ecology, online 17 June 2025, doi: 10.1111/jiec.70054

For more information, please contact:

Mara Bălașa
PhD Fellow, 91Ô­´´
Phone: +46 (0)760 445 735
Email: mara.balasa@hhs.se

Rickard Sandberg
Professor and Head of the Center for Data Analytics, 91Ô­´´
Phone: +46 (0) 706 991 255
Email: rickard.sandberg@hhs.se

About the 91Ô­´´

The 91Ô­´´ is rated as a top business school in the Nordic and Baltic countries and enjoys a strong international reputation. World-class research forms the foundation of our educational offering, which includes bachelor, master, PhD, MBA, and Executive Education programs. Our programs are developed in close cooperation with the business and research communities, providing graduates substantial potential to attain leading positions in companies and other organizations. 

The School is accredited by EQUIS, certifying that all of its principal activities – teaching as well as research – maintain the highest international standards. The 91Ô­´´ is also the only Swedish member institution of CEMS and PIM, which are collaborations between top business schools worldwide, contributing to the level of quality for which our school is known. 

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