Continuing EPICO’s Green Steel Dialogues series, we sat down with Giovanni Marinoni, vice president of ORI Martin, to unpack the potential of scrap in steel decarbonisation.
Founded in the early 20th century by Belgian entrepreneur Oger Martin, ORI Martin was born out of bold vision and craftsmanship. In 1933, Martin set up the company in Brescia, Italy, targeting the production of high-quality steel products. Today, ORI Martin stands as one of Europe's foremost integrated steel groups.
At the heart of ORI Martin’s steelmaking operations lies a strong commitment to sustainability and innovation. The company has fully embraced Electric Arc Furnace (EAF) technology, using electricity to melt recycled scrap metal instead of relying on traditional, carbon-intensive blast furnaces. This approach allows ORI Martin to support the circular economy while significantly reducing carbon emissions. In 1998, ORI Martin made history by commissioning Europe’s first Consteel EAF, supplied by Tenova. This pioneering step marked an important milestone in the journey towards more sustainable steel production. Since then, the company has continuously modernised and refined the system to improve both efficiency and environmental performance.
A further breakthrough came in 2015, when ORI Martin introduced a heat recovery system that captures energy from furnace off gases. This technology produces steam for Brescia’s district heating network and electricity through an Organic Rankine Cycle (ORC) generator, demonstrating a smart and practical example of industrial symbiosis.
Today, scrap recycling remains central to ORI Martin’s steelmaking philosophy. In 2022, the company produced around 559,446 tonnes of steel from recycled scrap, contributing to a total output of 650,000 tonnes at its modern EAF plant in Brescia, Italy.
In this edition, we’re zooming in on the potentials of scrap in EAFs as a pragmatic decarbonisation pathway for the steel industry through the work of ORI Martin and the perspectives of Mr Marinoni. Italian steel plants are European leaders in terms of volumes recycled, recovering more than 76% of waste generated by steelmaking processes. ORI Martin shares the opportunities of scrap-based EAF-steelmaking, and what strategic measures Europe should take to foster this decarbonisation pathway. The EAF producing pathway is currently facing challenges due to high energy prices, competition from cheaper foreign producers, and European plans for green labelling that neglects the sustainable benefits of scrap recycling, a regretful situation in the eyes of many (but not limited to) Italian EAF-steel makers.
Electric Arc Furnaces and Steel decarbonisation
Ori Martin has embraced EAFs and secondary steel making. The scrap-based EAF route dramatically reduces carbon emissions, which delivers as low as ~0.3 t CO₂ per ton of steel, compared to 2.0–2.2 t CO₂ via traditional blast furnace/basic oxygen furnace (BF-BOF) processes (Fastmarkets, 2024). This is based on the current average of embedded emissions between the two pathways. The EAF route is expected to decrease further compared to BF-BOFs, as the electricity grid also decarbonises and EAFs are supplied with an increasingshare of clean energy sources.
There are two fundamentally different ways to make steel today.
- The integrated blast-furnace/basic-oxygen route (BF/BOF): it starts from iron ore and coal. Big capital plants, high throughput, heavy emissions per ton.
- Scrap-based electric-arc furnace (EAF) route: it starts from metal (scrap), runs on electricity and is already much closer to being decarbonised — provided the electricity is clean.
EAFs represent approximately 85% of national output in Italy, way above the European average of the EU 45%. To decarbonise the European steel sector, shifting a meaningful share of production from BF-BOF to scrap-EAF is therefore a high-impact lever to cut CO₂ quickly, especially as the European grid decarbonises.
As you can see in (Table 1), the real decarbonisation potential of EAFs in unlocked with scrap; but what exactly is scrap, and what type of scrap are we interested in?
What is scrap?
Despite the word ‘scrap’ suggesting waste, it is in fact a crucial and valuable raw material used in all steelmaking processes.
Steel, like all materials, has a life cycle. When it reaches the end of its usefulness, whether as a car body, a household appliance or part of a building, it becomes what is known as post-consumer scrap. At the same time, during the manufacture of new steel products, leftover pieces and offcuts are produced, referred to as pre-consumer scrap.
The simple act of recycling scrap metal holds enormous potential for both the planet and Europe’s industrial competitiveness.
Using scrap instead of producing new steel from iron ore does more than cut CO₂ emissions; it transforms the entire environmental equation. Recycling requires up to 75% less energy and around 40% less water than the traditional, primary production route. These are major savings in both resources and emissions, simply by giving existing materials a second life.
The benefits extend beyond sustainability. Maximising the use of scrap also strengthens Europe’s energy security. According to a recent Joint Research Centre (JRC) analysis exploring circular economy (CE) levers for the steel sector, expanding scrap-based production together with other CE levers could reduce EU fossil fuel imports by up to 95% of the total potential decrease in fuel use for steelmaking.
In other words, every tonne of recycled steel is not only a win for the climate but also a strategic step towards a more resilient and energy-independent Europe. For Giovanni, it’s clear, that the more scrap and less coal and BF-BOFs you use, the cleaner the steel.
What you need to do is to make the scrap cheaper and to give an advantage of using scrap.
Because of the great abilities of scrap to decarbonise the steel making, it should be made cheaper and more accessible. The scrap market is slowly expanding, because of this increased focus on the sustainable benefits of using scrap compared to virgin iron-ore. Moreover, high raw material prices are also putting the spotlight on scrap, while technological advancements in recycling and processing are enhancing the quality and efficiency of steel scrap utilisation.
End-of-life-cycle scrap is expected to increase, reaching up to 1 billion tons of scrap, that can be used to reduce the need for materials and emissions in steel making (World Steel, 2021). Still, incentives to invest in steel recycling and innovation need to be reflected in policies. Critics of scrap as a sustainable solution argue that scrap is a finite resource and cannot therefore be relied upon as a decarbonization pathway. However, as the hydrogen economy is waiting to take off, Europe needs to be pragmatic about what competitive advantages it has in the green transition. Scrap maximization should be a goal, but it needs to be supported by appropiate incentives. A recent report found significant opportunities for increasing steel recycling,including achieving collection rates above 90% through the implementation of Deposit Return Schemes (DRS) and advancing sorting technologies capable of delivering material recovery rates well above 90% (JRC, 2025).
Form Giovanni’s point of view, keeping scrap in Europe is a realistic and pragmatic sequence for enabling Europe to shift to green steel. Today millions of tonnes of scrap leave Europe to be processed cheaply elsewhere (Turkey, India, China), and that exported scrap feedsfurnaces with higher CO₂ intensity abroad while Europe continued to deindustrialise . He suggests that if we stopped or strongly disincentivised scrap exports, that scrap would become available to European EAFs and converters immediately.
Some would argue that keeping more scrap in Europe is not the solution, as over 80% of the scrap in Europe is being used; moreover, there is already a low-domestic demand for long steel products, of which Europe is a net-exporter. Therefore, the EU should phase out BF-BOFs and build more EAF plants that can absorb the increased scrap.
The question of how to increase demand for recycled steel begins by looking at sectors that have traditionally relied on primary, rather than secondary steel, with one of the most prominent being the automotive industry. Despite its vast material requirements, the sector’s use of recycled steel remains limited. The main obstacle lies in the high levels of copper contamination found in scrap-based steel (Oeko-Institut, 2025 February).
Copper impurities pose a serious challenge during production: they can cause “hot shortness,” a defect that leads to surface cracking during hot rolling and forming. Because of its strict safety standards, the automotive industry demands exceptionally pure steel, that can meet strict requirements on strength, corrosion, toughness, ductility, creep, cryogenic response and resistance to hydrogen embrittlement. Because of this, copper content in many flat steel components must not exceed 0.1%, and for critical structural parts such as the body-in-white, the limit can be as low as 0.06%.
To address this barrier, Giovanni highlights how Ori Martin is pursuing an R&D project aimed at improving tolerance to copper contamination in scrap. The project explores the development of copper-tolerant steel alloys through advanced thermal treatments, enabling the use of lower-quality recycled scrap without compromising performance.
Other similar projects are also looking into dealing with the challenges of copper, focusing more on removing the copper such as the MEDALS project and PURESCRAP project. Supporting these initiatives and the work Ori Martin does is necessary to increase the use of low-quality scrap which is cheaper and more accessible.
Trade measures: Industrial strategic rethinking of scrap
So, how can we think differently about scrap when shaping our trade policies, to think more strategically on a decarbonisation pathway for European steel?
Giovanni raises a point of both keeping the advantage we have but also consider measures to protect European markets. European steel making is already greener than steel production in India and China, even without hydrogen, simply because its input is greener. At least for the EAF production in Europe, it carries all the benefits of scrap mentioned above, while not relying on coal. On this, Giovanni raises three points; 1) Keep more of the scrap in Europe; 2) put high tariffs on countries with high polluting steel making; 3) Liberize DRI trade to make DRI imports cheaper, using them as a complimentary green input in steelmaking alongside scrap.
Today, Europe exports large share of its scrap to third countries, especially to Türkiye and India. In 2023, the two accounted for 50 percent of total scrap steel imports in the world, with Türkiye being more dependent on scrap at 85% of its production, making foreign scrapindispensable to keep its production going. Why is such a large share of European scrap being exported to these countries? Giovanni explains that because of the lower cost of the scrap-melting process in India and Türkiye - primarily because of inexpensive electricity generated from low-cost coal and the absence of emissions-related charges -, they are able to absorb more of the cost of high scrap prices and are therefore able to pay a higher price than on the domestic EU market (paying ‘50 to 100 euros more per million tons of scrap’,according to Giovanni). For Ori Martin, this is selling off valuable input without considering the strategic value of keeping the scrap Europe.
Giovanni calls for export restrictions on scrap, especially to Türkiye, India, and China,seeing this as an opportunity to retain part of the 20 Mt of scrap that could cut EU steel CO₂ emissions by up to 40% (from 177 Mt to ~107 Mt) without new investments. But simply reusingthis scrap in Europe instead of exporting it to third countries is not the goal itself. The aim is to properly recognize the potential of scrap and to provide the right incentives to support the additional cost of transforming steel into scrap, thereby enabling European recyclers to receive a higher price for it. Lastly, to compensate for the restrictions of exporting scrap, the EU should liberalize imports on DRI. The think tank Agora found that integrating green HBI imports could lower European steel production costs by ~12–15% by 2040, claiming thatgreen Iron trade can complete domestic production and lower the cost for European Producers (Agora, September 2025).
Sliding scale
When we talk about the opportunities of scrap in steel production, the conversation always circles back to one crucial topic: incentives. As Giovanni often points out, Indian steel can cost up to 30% less than steel produced by Ori Martin in Italy. Yet, that lower price comes at a steep environmental cost, with Indian steel being three to four times more polluting; moreover, when exported to Europe, transport emissions add to the problem.
For downstream sectors buying the steel, such as automotive manufacturers, this creates a dilemma. Why would a carmaker pay 30% more for Ori Martin’s low-carbon steel when cheaper, higher-emission steel is available? The answer lies in what we choose to support.
If Europe wants a truly sustainable steel industry, it needs to decide clearly what counts as ‘green steel’. Additional incentives to then buy ‘green’ would send the right signal for off-takers, creating a stable demand for steel producers who can’t compete solely on price conditions.
The EU’s Steel Action Plan set out to make the European steel sector more competitive but stopped short of defining that crucial term. The debate over a green steel label has protracted for years, marked by technical disagreements and political hesitation.
Now, however, a turning point may be near. The forthcoming Industrial Accelerator Act (IAA) - previously known as the IDAA - is expected to finally provide clarity on the matter. Early signals suggest that the IAA will adopt the LESS label, also referred to as a sliding scale, as the European standard for green steel.
As EPICO and other industry observers have pointed out, the sliding scale could unintentionally penalise scrap recycling, one of Europe’s strongest circular advantages. Under this system, a steelmaker using EAFs and large amounts of scrap could find themselves in a lower ‘green’ category (C or D), even if their actual emissions are lower than those from other production routes.
With the sliding scale, we legitimise the import of more finished products from DRI-EAF producers in North Africa. These imports undercut cleaner European products and have significantly higher emissions.
Using scrap steel offers enormous material efficiency benefits and remains one of Europe’s key advantages in building a circular economy. Penalising scrap recycling in order to promote hydrogen-based direct reduced iron (H₂-DRI) might be defensible as a way to support decarbonising primary ironmaking and cutting hard-to-abate emissions. However, Giovanni thinks the narrative that decarbonising the steel industry should only focus on Iron is misleading, and that scrap is a valuable resource that should not be sidelined in the process.
Giovanni is not only critical of how the label is designed, but also of how CO₂ performance is measured. He argues that for a green steel label to be genuinely meaningful, it must take into account emissions from the entire upstream value chain, including electricity, lime, and oxygen. Without, the label risks failing to show the true environmental impact and cannot actually claim to define what ‘green’ means.
Why labelling and IAA-like traceability matter
If public buyers and major industrial customers such as automakers, construction contractors and appliance manufacturers cannot clearly see and trust the audited CO₂ content of the steel they purchase, price inevitably remains the only decisive factor. In that situation, customers will continue to buy the cheapest parts available, even if those parts were produced with more emissions. Without reliable and comparable information on carbon intensity, the market cannot reward cleaner production.
That is why steel labelling schemes, combined with an IAA-style traceability system, are essential. Such a system would provide transparent and verifiable data on the origin, production process, and carbon intensity of steel across the entire melt-and-pour value chain. This approach serves three critical purposes.
First, it exposes the real embedded emissions of steel products. The emissions contained in a finished part are the sum of emissions from every stage of its production, including the electricity source, lime and alloy production, upstream inputs and overall process efficiency. A meaningful label must therefore reflect the true life-cycle emissions and be independently auditable to ensure credibility.
Second, it levels the playing field for green European producers. When buyers can clearly see the CO₂ footprint of each product, they are able to prefer low-carbon, locally melted and poured steel. This transparency shifts demand towards the cleanest producers and rewards those investing in decarbonisation, rather than allowing imported, high-emission steel to undercut them on price alone.
Third, it supports smarter procurement and industrial policy. Public procurement that recognises and rewards genuinely low-emission steel, while requiring European melt-and-pour content, can direct billions in public spending towards local, sustainable production. In this way, traceable labelling becomes not only an environmental measure but also a cornerstone of industrial policy that sustains European jobs and capabilities.
The way forward for a sector under pressure
Across Europe, the steel industry is facing severe strain. Many major producers have already reduced or shut down capacity. What was once envisioned as a Green Deal for a sustainable and competitive Europe is now threatened by rising unemployment and accelerating deindustrialisation.
Giovanni argues that strategic action is urgently needed to prevent this outcome from manifesting fully. Europe must keep scrap within the region through appropriate tariffs, open pathways for using DRI through smart trade liberalisation, and create a strong market signal with a transparent label for green steel that reflects actual CO₂ performance, without neglecting the essential role of recycling in steelmaking.
Only by combining these measures with coherent traceability and labelling policies can Europe ensure that its Green Deal strengthens, rather than undermines its industrial base. Without such strategic thinking, the EU risks turning its climate ambitions into a process of deindustrialisation, leaving Europe dependent on imported steel from India, China and other regions with far higher carbon footprints.