A Year of Transition
The Heavy Engineering Research Association (HERA) describes 2025 as a year in which “research and steelmaking marched toward lower emissions while the market coped with cost and demand pressures.” That framing captures the dual reality of New Zealand’s steel sector: significant progress on decarbonisation, against a backdrop of genuine commercial difficulty.
Global overcapacity and price volatility have kept structural steel costs under pressure. Infrastructure demand has sustained volumes, but overall sector weakness — particularly in residential construction — has dampened the commercial environment. Forecasts suggest gradual demand growth ahead, positioning firms that have maintained capability through the downturn well for the recovery.
The Electric Arc Furnace
The centrepiece development for 2025 is New Zealand Steel’s commissioning of its electric arc furnace (EAF) plant at Glenbrook, expected to be operational by the end of the year. The EAF technology replaces the existing coal-based ironmaking process with one powered primarily by electricity, producing steel from recycled scrap rather than virgin iron ore.
The projected annual greenhouse gas reduction is approximately one million tonnes — making it New Zealand’s largest-ever single-site emissions reduction initiative. For builders and specifiers, the practical consequence is the future availability of locally produced, lower-carbon structural steel with improved price stability and supply security compared to imported alternatives.
New Standards and Tools
HERA delivered guidance in 2025 on low-carbon, circular design for low-rise buildings, giving designers a practical framework for reducing embodied carbon in steel-framed structures without compromising structural performance. Research contributions were also made to updated weld-sizing criteria in the draft revision of NZS 3404, the national standard for steel structures. These updates matter for engineers and fabricators working to current design standards.
HERA has developed tools to help specifiers choose lower-impact steel products across different applications — a practical response to the growing number of clients and projects requiring embodied carbon documentation for green building certification or procurement compliance.
Practical Guidance for Contractors
For builders and contractors specifying steel, HERA recommends three immediate actions: engage with the low-carbon design guidance for your typical project types, request lower-carbon product information from your steel suppliers, and lock in forward supply contracts where possible to manage price risk as the market tightens in the recovery phase. The tools are available; using them proactively is what distinguishes firms that lead on sustainability from those who follow.
