Zheng Hao See
26 March 2026
New survey: Is SE Asia ready to pay for low emission steel?
Everybody wants decarbonised steel, yet few want to pay for it. A recent survey by the National University of Singapore and Ramboll captures why steel producers in the Southeast Asia region, a global powerhouse for steel production, are hesitating to adopt lower-emission steel – and explores what could help change their minds. Get the overview in this article.
Global production of lower emission steel is steadily growing and today accounts for 29.1 percent of total output[1]. However, regional differences exist and in Southeast Asia carbon intensive Blast Furnace-Basic Oxygen Furnace (BF-BOF) capacity is expanding[2]. To gain new insights into future steel demand in the region, Ramboll and the National University of Singapore recently conducted a survey of major steel consumers including real estate and infrastructure developers about their willingness to pay for lower-emission steel and the barriers to adoption.
Steel sits at the centre of the global energy transition. It is an essential component of buildings, transport infrastructure, renewable energy, and manufacturing, yet it is also responsible for around eight percent of global carbon emissions. New policy frameworks, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), are reshaping procurement decisions and accelerating investment in lower-emission steelmaking technologies.
In Southeast Asia, where steel production has quadrupled over the past three decades[3], the picture is less clear cut. A new survey conducted by Ramboll and the National University of Singapore explores how organisations across the region perceive the transition to lower-emission steel and whether they are willing to pay a premium for it.
"The findings reveal a market that recognises the inevitability of change in adopting lower-emission steel but remains constrained by cost pressures, market uncertainty, and a lack of operational readiness."
Price sensitivity is high across the region, impacting willingness to pay
When asked about barriers to adopting lower-emission steel, respondents consistently identified cost as their primary constraint. One of the clearest signals from the survey is that price sensitivity is high across the region. In a scenario with a 25 percent reduction in steel carbon emissions, 33 percent of respondents are prepared to pay a modest price premium, mostly between 5 and 10 percent more than for conventional steel.
This indicates that the appetite for lower emission steel in Southeast Asia appears to be lower than the global average. In a previous worldwide survey conducted by Ramboll and Climate Group, 45 percent of all respondents said they would be willing to pay a premium for emissions reductions of 25 percent or higher for steel.
Higher cost premiums only really emerge for near-zero emissions steel with 57.1% of respondents willing to pay 25% to 50% more for emissions reductions of 90%. While this suggests that organisations are willing to reconsider procurement norms, they remain reluctant to accept major budget disruptions without the clear strategic or reputational returns that are likely to accompany a new-zero emissions product.
Worries persist about technical risk and performance requirements
Many respondents also raised concerns regarding the ability of lower emission steel options to meet the performance requirements of high-stress, high-grade applications, typically in specialised industries’ applications.
This reservation reflects the region’s current production landscape: Southeast Asia remains heavily dominated by BF-BOF capacity with relatively young assets. This reality contributes to a perception that lower emission production pathways may introduce technical or operational risks that buyers are not yet confident of managing.
Lack of standardised certification hurts procurement
Equally significant are data and transparency challenges. Respondents' express uncertainty about the reliability of emissions information provided by steel mills, citing inconsistent reporting boundaries, different life-cycle assumptions and fragmented certification frameworks.
Regional certification schemes vary in Southeast Asia and this lack of alignment limits comparability and erodes procurement confidence. In the absence of robust, standardised Monitoring, Reporting, and Verification (MRV) and certification structures, organisations find it a challenge to distinguish genuinely lower-emission steel from claims that cannot be independently validated.
Limited readiness for adopting lower emission steel
A minority of organisations have integrated lower emission steel into their decarbonisation strategies, procurement processes, or sustainability frameworks. Current emission-reduction targets remain modest, with most organisations prioritising small, incremental reductions rather than pursuing deeper decarbonisation goals required to align with global net zero ambitions.
"The survey indicates that while organisations report strong interest from senior leadership in lower emission steel, operational readiness for adopting it remains limited."
Policy support is strongest enabler for faster uptake
In both Ramboll’s global and Southeast Asian surveys, policy support in the form of tax incentives, credits, and subsidies is seen as the single most important intervention for ramping up lower emission steel supply and demand. In addition, mandatory environmental declarations, harmonised standards, and green building codes are seen as impactful mechanisms for catalysing demand. Public sector procurement of lower-emission steel is also particularly important given the disproportionate influence this has on regional steel consumption.
These needs mirror the conditions being established in other regions such as Europe where regulatory clarity and fiscal support are seen as essential to de-risking early adoption by producers.
Key takeaways
- The transition to lower emission steel is generally lagging in Southeast Asia and systemic alignment and clear enabling conditions are required to accelerate uptake.
- The survey results depict a region that is aware of the need to decarbonise through the adoption of lower emission steels but remains operationally and structurally unprepared for the transition.
- While steel consumers are willing to explore, and to some extent, pay for lower-emission steel, procurement is constrained by high cost sensitivity, limited confidence in material quality, and the absence of consistent standards.
- Producers have viable decarbonisation pathways available yet face uncertain demand and fragmented certification mechanisms.
Want to know more?
Zheng Hao See
Senior Consultant
+65 6958 2300
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