Opinion: North Africa has potential as Europe’s green steel partner

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While North Africa may not have the financial muscle of Gulf countries to drive large-scale industrialisation, Soumya Ranjan Pradhan suggests that by 2030, the region will emerge as Europe’s premier green steel partner. North Africa, he notes, compensates for its financial limitations with strategic geography, abundant resources and timing.

• Mr Pradhan is the Head of Metals Division at BDB India Private Limited. He is an expert in the global steel industry with 14+ years of experience across the entire value chain.

• He argues that North Africa’s proximity to European markets, combined with significant iron ore reserves and massive renewable energy potential, positions the region to supply low-carbon steel and green hydrogen at scale.

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As global steelmaking transitions towards decarbonization, North Africa is positioning itself as a strategic hub for low-carbon steel and green hydrogen. While much of the spotlight has been on the Gulf Cooperation Council (GCC), I remain consistently bullish on North African steelmakers due to two enduring advantages: strategic geography and raw material security.

With the EU’s Carbon Border Adjustment Mechanism (CBAM) coming into effect in January 2027, European steelmakers will need low-carbon feedstock to replace blast furnace pig iron. North Africa’s proximity to Europe offers clear advantages over Gulf exporters, with lower logistics costs, shorter transit times, and reduced Scope 3 emissions, making steel exports even more competitive in a carbon-sensitive market. Simply put, the Mediterranean advantage makes Egypt, Algeria, Morocco, Tunisia, Libya, and Mauritania natural partners for the EU’s green steel transition.

North Africa’s resource profile mirrors the GCC, but with greater emphasis on iron ore and renewable potential. The region holds significant iron ore reserves in Mauritania, Morocco, Algeria, Libya, and Egypt. Its EAF-based steelmaking structures are already aligned with decarbonization goals, operating largely on natural gas-based DRI (NG-DRI). In addition, the massive potential for renewable power from solar and wind can fuel green hydrogen-driven DRI, ensuring a pathway to full carbon neutrality. This combination of raw material security and renewable energy abundance positions the region to lead in green DRI exports to Europe.

Several ambitious projects underline the region’s intent to scale green steel production. In Mauritania, SNIM and CWP Global are developing a 2.5 MTPA green DRI plant, integrated with 5.5 GW of renewable power and green hydrogen capacity. Egypt is advancing a €1B 2.5 MTPA DRI project in the Suez zone, expandable to 4 MTPA. Algeria is moving forward with Copresud and CEIP Scarl’s €1B DRI plant, estimated at around 2.5 MTPA. Libya’s Tosyali and SULB are planning an 8.1 MTPA DRI facility, set to be the largest in the world. Morocco, meanwhile, has included H₂-DRI and green ammonia projects as part of its $32B “Moroccan Offer.” Collectively, these projects reflect a regional green steel boom with clear orientation towards European demand.

Decarbonization success depends on scaling renewable energy and green hydrogen, and North Africa is on the move. Egypt plans for its renewable energy share to reach 42% by 2030 and 58% by 2040. Algeria has 22 GW of renewable capacity planned by 2030. Tunisia is targeting 35% renewable energy in its power mix by 2030 and 50% by 2035. Morocco aims for 52% renewable energy in the mix by 2030. Mauritania is developing 16 GW of renewable energy capacity tied to green hydrogen projects by 2030. Such targets directly enable green hydrogen-based steelmaking, reinforcing export competitiveness under CBAM.

Unlike the GCC, however, North Africa lacks deep sovereign wealth funds to bankroll multi-billion-dollar projects independently. Instead, the region relies on international financing from institutions such as the EIB, AfDB, World Bank, and EBRD, which introduces constraints. Political risks, especially in Libya, also have the potential to slow progress. Yet, despite financing hurdles, the EU’s urgent need for green steel and hydrogen imports post-2027 ensures that investment flows will continue. The opportunity is simply too large to ignore.

North Africa has several distinct advantages that make me bullish on its steel sector. Its proximity to Europe makes it a natural supplier under CBAM. Its iron ore security guarantees feedstock availability. Its renewable potential ensures the viability of a green transition. And its growing DRI capacity aligns directly with the EU’s low-carbon needs. North Africa may not have the financial muscle of the Gulf, but it has geography, resources, and timing on its side. By the 2030s, I expect the region to emerge as Europe’s primary green steel and green hydrogen partner, creating new industrial and trade linkages that could reshape the global steel value chain.