Steel sits at the heart of Europe’s decarbonisation challenge. No other material combines such economic importance with such carbon intensity. Transitioning to green steel is therefore not a minor industrial tweak—it is a structural transformation reshaping value chains, trade flows, and regional competitiveness. South-East Europe occupies a pivotal yet uneven position: some countries are integrating into Europe’s green-steel ecosystem, while others risk being left behind, trapped between legacy assets and future requirements they cannot meet.
The defining feature of green steel is systems integration. Hydrogen-based direct reduction (H-DRI), electric-arc furnaces (EAFs), scrap optimisation, electrified reheating, and advanced automation must operate seamlessly together. Success depends less on iron ore access and more on engineering expertise, energy integration, and grid capacity. South-East Europe’s relevance lies in its ability to integrate into Europe’s evolving steel network, not merely the size of its steel plants.
Legacy Steel vs. Green Steel in SEE
Traditional steelmaking in SEE developed under different conditions: cheap energy, limited emissions regulation, and scale-driven competitiveness. Today, these conditions no longer exist. The green-steel transition rewards flexibility, engineering sophistication, and clean-energy proximity, while penalising rigid legacy configurations and weak grid integration. This shift creates divergence among SEE countries.
Romania: Scale Meets Opportunity and Risk
Romania hosts significant steelmaking capacity and benefits from EU membership, including access to funding and policy support. However, grid limitations and limited hydrogen infrastructure constrain integration. Romania’s success in green steel depends on modernising electric-arc furnaces, optimising scrap flows, and integrating renewable power at scale. Without rapid engineering upgrades, Romania risks retaining capacity without competitiveness.
Bulgaria: Niche Integration Over Scale
Bulgaria’s steel sector is smaller, and its energy mix and legacy infrastructure create vulnerabilities. High energy costs and limited decarbonisation pathways threaten long-term viability. Bulgaria’s path forward relies on niche integration, leveraging targeted capabilities rather than attempting large-scale green-steel leadership.
Greece: Integration Through Logistics and Energy Corridors
Greece plays an indirect but strategic role. While it lacks major steelmaking capacity, it controls critical ports and energy infrastructure. Greek logistics and energy corridors increasingly support green-steel supply chains across Europe, integrating flows without producing steel directly.
Serbia: Engineering as a Strategic Advantage
Serbia occupies a unique position. While its steelmaking capacity is limited, its engineering ecosystem allows it to integrate into green-steel projects across Europe. Serbia provides design, modelling, automation, and integration expertise, enabling hydrogen-DRI and EAF projects to function efficiently. This contribution may be less visible than steel tonnage but is strategically essential.
Green steel requires massive quantities of clean electricity and eventually hydrogen. Grid stability, transmission capacity, and power-quality management are critical. SEE regions that can integrate industrial loads into evolving grids gain a competitive edge. Serbia’s experience with high-voltage (HV) and medium-voltage (MV) systems allows it to support energy integration even beyond its borders.
High-quality scrap is a cornerstone of green steel, reducing emissions and energy consumption. Managing scrap flows, upgrading scrap quality, and integrating recycling into steelmaking requires engineering precision. SEE countries with strong recycling and processing capabilities, especially Serbia, are well-positioned to integrate effectively into green-steel value chains.
Avoiding Fragmentation: The Case for Regional Integration
The risk for SEE is fragmentation. Independent, uncoordinated green-steel projects could misallocate resources and weaken competitiveness. The opportunity lies in strategic integration, where countries play complementary roles:
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Serbia: Engineering and integration hub
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Romania: Scale and production capacity
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Greece: Logistics and energy corridors
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Bulgaria: Niche metallurgical capabilities
Together, these strengths could form a resilient regional green-steel ecosystem.
Green steel will not immediately replace traditional steel, markets will increasingly differentiate between low-carbon and high-carbon steel. Regions that fail to integrate engineering, energy, and recycling will face declining margins and shrinking markets. South-East Europe stands at this crossroads: those who integrate remain relevant; those who do not will be left behind.
