However, suppliers emphasized that technology readiness is no longer the only challenge – financing, permitting, energy system integration and credible demand are also key variables. Supply has plateaued On the supply side, IEA tracking shows that primary near-zero steel projects in the 2030 pipeline have plateaued at ~10 million tonnes (Mt), against more than 100 Mt needed by 2030 on a net-zero pathway, highlighting the gap between ambition and bankable projects.104 Hydrogen-DRI can close a meaningful share of the emissions gap, but its cost competitiveness hinges on low-cost, reliable renewable power and hydrogen. IEA’s comparative cost analysis illustrates the sensitivity of hydrogen-DRI steel costs to electricity and hydrogen price trajectories.105 Demand is slowly growing Demand is nascent but growing. Buyers’ platforms and coalitions have begun to aggregate early volumes. Several global and regional initiatives – including the First Movers Coalition106 and the Rocky Mountain Institute (RMI)107 – are assembling future demand commitments to underwrite first- of-a-kind plants this decade. Yet as one supplier cautioned, buyers’ long-term commitments have softened with shifting macro conditions, even while the technology trajectory remains intact. On the policy front, CBAM’s 2026-2034 phase- in/phase-out with the EU ETS is the fulcrum for Europe’s investment logic; complementary lead- market ideas such as standardized definitions and green public procurement criteria are being actively developed to stabilize demand and price signals.108Supplier perspectives: key themes and insights Offtake and bankability are critical Bankability is the binding constraint. Many suppliers repeatedly stressed that moving from demonstration scale to commercial scale is fundamentally a financing problem linked to demand visibility. In iron-making projects especially, the development cycle is longer and more capital- intensive than incremental retrofits. This financing reality is reshaping commercial structures. Some suppliers are experimenting with new multi-party configurations, extending beyond traditional steelmaker-supplier relationships to include downstream OEMs and logistics partners. As one project start-up supplier commented, a project like theirs needs to be financed and pre-sell a very large portion of their books through offtake contracts. Permitting defines pathway Permitting and “time-to-grid” define the critical pathway. Access to suitable and affordable gigawatt-scale renewables, hydrogen and industrial interconnection requirements are colliding with permitting and local planning processes. Suppliers seeking to co-locate industrial loads with renewable resources also flagged grid congestion, land availability and community acceptance as variables that decide site selection and sequencing. Demand needs policy support Demand signals exist but are uneven and often conditional and not guaranteed. Where credible policy backstops and procurement standards are emerging, offtakes are advancing. One European supplier reported substantial future sales across sectors and tied these to buyers’ upstream raw material strategies. Still, several suppliers emphasized that policy certainty is as important as private coalitions. Early market offerings validate willingness to pay, albeit at limited volumes. Producers piloting low- emission grades in select markets are using these runs to test price premium, logistics and other operational and marketing parameters. This experimentation is essential for learning, yet suppliers noted that premium recovery seldom covers previous cost expenditures without policy support. We can make [our low-carbon steel product] commercially available, even if [volumes are] limited… to open up the market and test willingness to pay a premium. Supplier Turning Challenge into Opportunity: Supplier Voices from Heavy-Emitting Sectors 35

Turning Challenge into Opportunity 2025