Why insurance needs to lead the green steel transition

I recently found myself in Brussels, one of the only insurers in a room full of steel producers, industry associations and policymakers.

The 2026 edition of the World Steel Association’s Open Forum was convened to bring together those inside and outside the sector’s green transition. As a bit of an outsider, I was there to argue that it is not technology holding the sector back, nor is it a lack of appetite for change. It is the ability to mobilise investment at the pace and scale the transition demands.

Without a credible way to transfer risk, that financing either doesn’t happen or happens at costs that stop the project getting off the ground altogether. Insurance is not a negligible part of that equation, and it’s not a cost. It’s a catalyst.

Ben Kinder, Tokio Marine GX

McKinsey estimates the green transition will require $9.2tn (£6.96tn) spent on physical assets each year. Steel is chief among the sectors hardest to decarbonise, currently producing around 1.9 billion tonnes of crude steel each year. The routes to decarbonisation are neither cheap nor proven at scale, and much of the technology required is still nascent.

Lenders

Picture what a lender sees looking at a first-of-a-kind hydrogen direct reduction plant. A technology that has not been built at scale, with no performance history and a supply chain that is still being assembled. Liability that could extend for decades if something were to go wrong.

Without a credible way to transfer risk, that financing either doesn’t happen or happens at costs that stop the project getting off the ground altogether. Insurance is not a negligible part of that equation, and it’s not a cost. It’s a catalyst.

But for that to hold, insurance must be in the room early enough. An insurer that only sees a project after the site has been chosen and the equipment specified can’t shape the risk profile in the same way had it been involved from the beginning. The cost of this cover, if available at all, will be priced accordingly.

Proactivity

The picture changes when insurers are present from the beginning. Asset design improves, risk reduces, premium decreases, and the financing timeline accelerates. 

For steel companies and their investors, this is the difference between a project that gets built and one that stays frozen in pre-production.

This isn’t the first time the energy transition has faced this capital challenge. Two decades ago, offshore wind faced much of the same problem. It was a novel technology with thin risk data. Lenders reflected this uncertainty in their financing costs, leaving many projects unviable.

Tokio Marine GX decided to engage early. It helped build understanding alongside the technology and worked to develop standards to guide the market. Over time, that early involvement helped unlock investment at scale, opening the door for offshore wind to be one of the most actively insured sectors in the energy transition.

Steel needs to embark on the same journey. The first hydrogen direct reduction plants are already moving beyond the conceptual stage, and the risk frameworks that determine whether these projects secure financing need to be developed in tandem – not under time pressure once the plants are built. The window for early engagement is still open, but it won’t remain so indefinitely.

The green transition in steel requires enormous investment. History has already demonstrated what happens when insurance leads, not follows. The transition to green steel cannot afford to ignore that precedent.