The steel industry currently releases around one third of Germany’s industrial CO2 emissions. By 2045, the German steel industry targets climate neutral production (Wirtschaftsvereinigung Stahl 2024), and the utilization of steel scrap as a raw material is a key contributor to achieving this aim. The use of steel scrap as a raw material contributes to this. Every ton of remelted steel scrap saves approximately 1.66 tons of CO2 (World Steel Association 2021) compared to primary production. These savings are already possible with today’s technology. Additionally, the new climate-neutral production processes for primary steel, in particular the hydrogen-based direct reduction of iron ore in combination with electric arc furnaces, allow steel scrap to be used more flexibly than today’s blast furnaces.

This gives rise to three questions: How could the German steel industry’s demand for steel scrap develop up to 2045? How will the demand for high-quality scrap for the production of particularly demanding steels develop? And is there a risk of a shortage in Germany compared to current availability?

Methodology

The demand for steel scrap essentially depends on three factors: total crude steel production, the share of production processes (process routes) and the recycled content (share of scrap in the raw material mix) in these processes. The evolution of these factors up to 2045 is subject to considerable uncertainty.

We use scenarios to take account of uncertainties and determine a plausible range of steel scrap demand. Scenarios are consistent and coherent pictures of the future and are based on hypothetical sequences of events (Günther 2024). They are not forecasts.

The study develops a total of nine scenarios. The assumptions underlying our scenarios are based on current studies on the transformation of the steel industry towards climate neutrality, the analysis of trends and supplementary assumptions on recycled content in new production processes.

The scenarios differ from one another in terms of the development of crude steel production and recycled content for the new production processes. In the scenarios, we vary crude steel production between 35 and 41 million tons in 2030 and 28 and 40 million tons in 2045. Furthermore, the scenarios explore different assumptions about the recycling input rate for the new hydrogen-based processes. The composition of the process routes was not varied, as both studies and announcements by steel producers convey a similar picture: CO2 intensive blast furnaces are to be replaced by hydrogen-based processes by 2045 and the proportion of scrap-based electric furnaces is to be increased as well.

Scrap demand is (very likely) increasing

An increase in demand for steel scrap above 17.2 million tons – the average scrap input in steel production from 2015 to 2023 – appears likely. For 2030, the implied range of scrap demand is between 17.0 million tons and 22.7 million tons. For 2045, it is between 14.9 million tons and 27.6 million tons. In 2030, scrap demand is below the historical average in only one scenario, and in two scenarios in 2045.

The level of crude steel production appears to be the most important determinant for overall scrap demand. If crude steel production returns to pre-COVID levels, the demand for steel scrap could rise above the amount currently available. If crude steel production declines, the German steel industry’s demand for scrap could fall despite changes in production routes and rising recycled content levels.

High-quality scrap is likely to be in particularly high demand

The demand for high-quality scrap is likely to increase. The new technologies for hydrogen-based crude steel production allow for a more flexible use of scrap than the current blast furnace route yet require scrap without impurities. In 2030, the demand for high-quality scrap ranges from 4.3 million tons to 7.7 million tons. In 2045, it is between 2.7 million tons and 10.1 million tons. For comparison: between 2015 and 2023, an average of 4.8 million tons of steel scrap was used in the blast furnace route in Germany. Additional demand for high-quality scrap seems possible even if overall crude steel production falls, which marks a difference to the developments of overall scrap demand. The uncertainty regarding the required quantities is greater for high-quality scrap than for overall scrap demand.

Availability of steel scrap: quantity and quality

The (quantitative) availability of steel scrap in Germany is sufficient in the majority of scenarios – compared to today’s availability. Only in the case of a recovery of crude steel production paired with high scrap usage rates in the new production routes will an additional supply of scrap be required.

The availability of high-quality scrap for the production of sophisticated steels appears more critical in light of the results. In 7 (2030) and 6 (2045) out of 9 scenarios, the demand for high-quality scrap increases above the current 4.8 million tons. Availability of high-quality scrap is likely to decrease in Germany without further intervention because the supply will shift towards post-consumer scrap (Hundt and Pothen 2025).

Conclusions

The availability of high-quality scrap in Germany should be increased in order to counteract rising demand and falling supply. A dedicated market with higher willingness to pay for high-quality scrap appears important for this. Incentives should be created to improve the collection, sorting and processing of steel scrap. In addition, trade policy should create or maintain import opportunities for scrap. Scrap requirements should also be quantified at European level.

References

1. Hartung, Maik; Pothen, Frank; Hundt, Carolin (2025), Szenarien für den Stahlschrottbedarf der deutschen Stahlindustrie, Wirtschaftswissenschaftliche Schriften der Ernst-Abbe-Hochschule Jena 2025/2.
2. Hundt, Carolin; Pothen, Frank (2025), European Post-Consumer Steel Scrap in 2050: A Review of Estimates and Modeling Assumptions, Recycling 10(1): 21.
3. Günther, Edeltraud (2024), Gabler Wirtschaftslexikon: Szenarien, https://wirtschaftslexikon.gabler.de/definition/szenarien-53735, 18.10.2024.
4. Hans-Böckler-Stiftung (2024), Szenarien: Denken in Alternativen, https://www.mitbestimmung.de/html/arbeiten-mit-szenarien-3510.html, 18.10.2024.
5. Wirtschaftsvereinigung Stahl (2024), Daten und Fakten zur Stahlindustrie in Deutschland, https://www.wvstahl.de/wp-content/uploads/WV-Stahl_Daten-und-Fakten-2024_RZ-Web.pdf, 30.04.2025.
6. World Steel Association (2021), Life cycle inventory (LCI) study. 2021 data release, 30.04.2025.

Authors

Maik Hartung, Frank Pothen, Carolin Hundt

You can read the full study here.