Muscat – Oman is well placed to become a global leader in the emerging green iron and steel industry, leveraging its natural advantages and strong industrial foundations through strategic planning, according to the US-based Institute for Energy Economics and Financial Analysis (IEEFA).

A new report from IEEFA evaluates Oman’s industrial landscape as the decarbonisation of iron and steelmaking accelerates. The sultanate, the report noted, is making a compelling case to capitalise on this transition and establish itself as a leading international hub.

‘Oman is emerging as a global green iron and steel hub, thanks to its vast renewable energy potential, growing hydrogen initiatives, abundant land for project development, strategic location with access to open seas, and a supportive regulatory framework’, the report highlighted.

Soroush Basirat, Energy Finance Analyst, Global Steel at IEEFA and author of the report titled Oman at the Frontline of the Green Steel Transition, said, “Oman is one of the few nations in the MENA region with an integrated steelmaking supply chain. Having this established industrial base gives it a solid foundation for transitioning towards low-emission iron and steel production – and ultimately green iron and steel.”

IEEFA noted that Oman’s iron and steel supply chain includes iron ore concentration, pelletising, direct reduction, and electric arc furnace (EAF) facilities, with expansion plans that include domestic iron ore concentration. This industrial base is particularly well suited for the shift to low-emission iron and steelmaking, as it is advanced in producing iron metallics such as direct reduced iron (DRI), which can be made using fossil gas or, eventually, green hydrogen.

However, gas-based DRI remains emissions-intensive, and green iron and steel cannot be produced using gas alone. Without transitioning from gas to green hydrogen, new DRI projects would be unable to benefit from a green premium in the market. The report stresses that Oman needs to pivot to green hydrogen, for which projects are already underway.

‘Oman enjoys vast renewable energy potential and significant investments in both solar and wind power generation. Cheap, reliable clean energy could be a major advantage for steelmakers in Oman, providing the constant power needed for EAFs, DRI, and, importantly, the electrolysers required to produce green hydrogen,’ the report stated.

Commending Oman’s efforts in planning large-scale green hydrogen projects, IEEFA noted that the country has a clear, coordinated strategy to become a leading hub for green hydrogen production. ‘Oman aims to produce 1–1.5mn tonnes of green hydrogen by the end of this decade. The steel sector can play a central role as a major offtaker in Oman’s emerging green hydrogen economy.’

Supporting these ambitions, Oman also benefits from abundant land for project development. Its strategic location with access to open seas provides an advantage in supplying major export markets such as the EU, Asia, and Southeast Asia, IEEFA added.

The report further highlighted that Oman’s existing advantages are strengthened by strong policy support and a robust regulatory framework. ‘Oman Vision 2040 sets an overall target of achieving a non-oil share of GDP of over 90%, moving the economy away from reliance on fossil fuel exports. Its hydrogen strategy includes comprehensive planning across all aspects, from infrastructure development and incentives to actively securing offtakers for hydrogen projects.’

Traditionally, Oman’s iron and steel sector has been dominated by two companies, Jindal Group and Vale. ‘However, the country is now attracting new entrants such as Meranti Green Steel, Mitsui, Kobe Steel, and green hydrogen developer ACME Group, which are reshaping the market. They are spearheading a new generation of DRI facilities featuring flexible technologies. Crucially, these projects are expected to use a mix of gas and hydrogen from day one, with ambitious timelines for increasing the proportion of hydrogen used,’ the report noted.

“Oman stands at a pivotal moment,” Basirat said. “With the potential to supply green iron to markets such as the EU cost-competitively, the country holds a significant advantage over other producers. It is well positioned to lead the shift to green iron and steel, managing the transition in a highly structured way.”

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