Meranti launched its green steel project in 2023.(Photo: Meranti)
Meranti, a steel manufacturer headquartered in Singapore, pledges to build Southeast Asia's first green flat steel plant in Thailand. The company plans to use hydrogen to replace coal in its operations, coupled with electric arc furnace technology powered by renewable energy to produce green steel. This initiative aims not only to help Thailand reduce its dependence on imported steel but also to contribute to the decarbonization of the electric vehicle industry.
Meranti develops green energy electric arc furnaces
In 2023, Meranti announced its green steel project, marking a significant milestone in Thailand's steel industry's decarbonization efforts. The plant is expected to be operational by 2027, with an annual production capacity of 2 million tons, resulting in a yearly reduction of 4 million tons of carbon emissions—equivalent to planting 200 million trees annually.
Green steel, simply put, is steel produced without the use of fossil fuels. It can use green hydrogen to replace coal in the production of Direct Reduced Iron (DRI), followed by steelmaking in an electric arc furnace powered by renewable energy. This method significantly reduces carbon emissions compared to traditional steelmaking processes. Meranti aims to increase the proportion of green hydrogen steelmaking to 90%, thereby reducing carbon emissions by over 70%.
With over 200 years of experience in steel manufacturing, Meranti is promoting its green steel initiative through the establishment of a new brand and multinational collaborations for sourcing materials and technology. Notable partners include Green Steel of Western Australia (GSWA), Global Power Synergy in Thailand, and Italian steel giant Danieli.
Thailand's steel production capacity utilization hit record low
Traditionally, carbon emissions from steel production exceed 2,000 kilograms per ton of finished steel. If we project Southeast Asia's steel output to reach 100 million tons by 2030, the annual carbon emissions could reach 200 million tons. Experts generally believe that the green transformation of the steel industry could reduce carbon emissions to below 200 kilograms per ton of steel produced.
Meranti estimates that, driven by the trend towards net-zero emissions, global demand for green steel could increase 15-fold by 2035. Flat steel, commonly used in construction, machinery, and manufacturing, may see its low-carbon steel share reach over 25% by 2040.
Thailand imports 11 million tons of steel annually, accounting for 60% of its total demand, highlighting the country’s inability to meet market needs through domestic production. With modern development in Vietnam and Indonesia, coupled with China's large-scale production driving prices down, Thailand has become heavily reliant on steel imports. The country's steel production capacity utilization rate fell below 30% in the first half of this year, reaching a low of 29.3%, the lowest in seven years.
Thailand’s manufacturing sector ranks among the top in the region for steel procurement. By developing green steel, Meranti aims to not only reduce reliance on steel imports but also capitalize on the fact that steel is an essential material in automobile manufacturing. With the Thai government vigorously promoting electric vehicles, the demand for low-carbon materials is expected to rise.
