Report on the Global Electrical Steel Market and its Contribution to Sustainable Development Goals

Executive Summary

The global electrical steel market is projected to expand from USD 47.8 billion in 2025 to USD 88.9 billion by 2035, reflecting a Compound Annual Growth Rate (CAGR) of 6.3%. Electrical steel is a specialty material engineered for high magnetic permeability and low energy loss, making it indispensable for the efficiency of transformers, motors, and generators. Beyond its conventional applications, electrical steel is a critical enabler of modern smart energy infrastructure, playing a pivotal role in the global transition toward sustainable energy systems and the achievement of the United Nations Sustainable Development Goals (SDGs).

Market Context and Drivers

Electrical steel, also known as silicon steel, is specifically designed to minimize energy dissipation during magnetic flux cycles. The market’s growth is fundamentally driven by several global trends that align with sustainability objectives:

• Increasing global demand for electricity.
• The large-scale integration of renewable energy sources into national grids.
• The necessary expansion and modernization of power grid infrastructure, particularly in emerging economies.
• The imperative to enhance energy efficiency across all sectors to meet climate targets.

The market is primarily composed of two product types: Grain-Oriented Electrical Steel (GOES), used in high-efficiency transformer cores, and Non-Grain-Oriented Electrical Steel (NGOES), applied in rotating machinery such as industrial and electric vehicle (EV) motors. These materials are foundational to building next-generation smart grids that minimize energy loss and improve overall system efficiency.

Alignment with Sustainable Development Goals (SDGs)

The electrical steel market is intrinsically linked to the advancement of several key SDGs:

• SDG 7 (Affordable and Clean Energy): By significantly reducing energy losses in electrical equipment, electrical steel makes energy systems more efficient and affordable. Its use is critical for the effective operation of transformers in wind and solar farms, facilitating the growth of clean energy.
• SDG 9 (Industry, Innovation, and Infrastructure): The development of advanced grades of electrical steel represents material science innovation. The material is a cornerstone for building resilient, reliable, and sustainable infrastructure, including smart grids and EV charging networks.
• SDG 11 (Sustainable Cities and Communities): High-efficiency electrical steel components are essential for smart grids, which enable sustainable urban energy management, integrate decentralized renewable sources, and support the widespread adoption of electric mobility.
• SDG 13 (Climate Action): Enhanced energy efficiency directly translates to lower energy consumption and reduced greenhouse gas emissions. By enabling the effective integration of renewables and improving the performance of EVs, electrical steel is a key material in the global effort to mitigate climate change.

Role in Smart Energy Infrastructure and Electric Mobility

A significant, and rapidly growing, application for electrical steel is its integration into smart energy systems. As nations modernize their grids to accommodate variable renewable energy sources and the demands of EV charging, the need for high-performance materials that minimize energy loss becomes paramount.

In the electric vehicle sector, specialized NGOES grades are crucial for manufacturing high-speed, high-efficiency motors. This improves vehicle performance and extends battery range, accelerating the transition to sustainable transportation and contributing to SDG 11 and SDG 13. Similarly, smart transformers utilizing high-grade GOES are essential for maintaining grid stability and efficiency in renewable energy projects.

Global Applications and Case Studies

The impact of electrical steel on sustainable infrastructure is evident in projects worldwide:

• China: The Shenzhen Electric Grid Project utilizes advanced GOES in its smart grid network to enhance transformer efficiency. This initiative significantly cuts annual energy wastage, demonstrating a direct contribution to SDG 7 and SDG 11.
• Europe: In alignment with the EU’s net-zero targets, Siemens Energy is developing transformer cores from low-carbon, high-grade electrical steel, advancing SDG 9 and SDG 12 (Responsible Consumption and Production).
• United States: Major utilities are upgrading aging grid infrastructure with components based on advanced electrical steel. These upgrades support bidirectional energy flow, which is crucial for integrating rooftop solar and battery storage systems, thereby strengthening grid resilience and supporting SDG 7.
• Automotive Sector: Leading automakers are investing heavily in high-performance NGOES to produce efficient EV motors, which boosts vehicle performance while reducing energy consumption and supporting the goals of SDG 13.

Future Outlook and Policy Influence

The future of the electrical steel market is directly tied to the evolution of smart energy technologies. Demand for NGOES is expected to grow substantially, driven by the exponential rise in EV manufacturing, which could account for over 20% of the market by 2035. Concurrently, the global shift to renewable energy will sustain high demand for GOES in wind turbine generators and smart transformers.

Technological innovation, a key component of SDG 9, continues to advance with the development of next-generation materials like amorphous and nanocrystalline steel, which promise even lower core losses. This progress will be further accelerated by supportive policy frameworks:

• The U.S. Inflation Reduction Act
• The European Union’s Green Deal
• India’s National Smart Grid Mission

These initiatives prioritize energy efficiency and sustainability, ensuring that electrical steel remains a core material for building the clean energy infrastructure of the future.

Market Segmentation

1. By Product Type:
   • Grain-Oriented Electrical Steel (GOES)
   • Non-Grain-Oriented Electrical Steel (NGOES)
2. By Application:
   • Transformers
   • Motors
   • Inductors
3. By End-Use:
   • Energy
   • Automobile
   • Manufacturing
   • Household Appliance
   • Others
4. By Region:
   • North America
   • Latin America
   • Europe
   • Asia Pacific
   • Middle East and Africa

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy

  The article extensively discusses the role of electrical steel in improving energy efficiency in transformers, motors, and generators. It highlights its importance in modernizing power grids to support renewable energy sources like wind and solar, directly contributing to making energy systems cleaner and more efficient.

• SDG 9: Industry, Innovation, and Infrastructure

  The text focuses on electrical steel as a key material for building sustainable and resilient infrastructure, specifically “smart energy infrastructure” and “smart grids.” It covers innovations in steel grades (GOES, NGOES) and their application in advanced technologies like electric vehicles (EVs) and smart transformers, which represents an upgrade of industrial and infrastructural capabilities.

• SDG 11: Sustainable Cities and Communities

  The article connects the use of electrical steel to the development of sustainable urban infrastructure. The example of the “Shenzhen Electric Grid Project” shows how advanced materials can reduce power losses in a city’s smart grid. Furthermore, the material’s role in enabling EV adoption and integrating “rooftop solar power” supports the creation of more sustainable and resilient cities.

• SDG 13: Climate Action

  By enabling higher energy efficiency and reducing energy waste, electrical steel contributes to mitigating climate change. The article mentions its role in helping to meet “net-zero targets” and its alignment with climate-focused policies like the “EU’s Green Deal” and the “U.S. Inflation Reduction Act.” The transition to EVs, facilitated by efficient electrical steel motors, is also a key strategy for reducing transport-related emissions.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 7: Affordable and Clean Energy

   • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.

     The article supports this target by describing how electrical steel is crucial for integrating renewable energy sources. It is used in “wind turbine generators” and “smart power transformers used in renewable energy projects, such as wind and solar farms,” which are essential for enhancing grid stability and efficiency as the share of renewables grows.

   • Target 7.3: By 2030, double the global rate of improvement in energy efficiency.

     This is a central theme of the article. Electrical steel is presented as a material “designed to minimize energy loss” and “optimize energy efficiency.” Its use in “high-efficiency transformers and electric motors” and its ability to “cut annual energy wastage by thousands of megawatt-hours” in projects like Shenzhen’s smart grid directly align with this target.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being.

     The article focuses on upgrading energy infrastructure, mentioning how countries are “modernizing their power grids” and utility companies are “upgrading aging grid infrastructure with electrical steel-based components.” This creates the resilient and sustainable “smart energy infrastructure” needed to support modern economies.

   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.

     The article details the adoption of cleaner technologies, such as the shift to “specialized NGOES grades” in EV motors to improve performance and the development of “low-carbon, high-grade electrical steel” in Europe. This represents a direct effort to make industries like automotive and energy more sustainable and efficient.

3. SDG 11: Sustainable Cities and Communities

   • Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to… municipal and other waste management.

     The article’s case study on the “Shenzhen Electric Grid Project” directly relates to this target. By implementing advanced electrical steel to “reduce power losses across the city’s rapidly expanding smart grid network,” the initiative actively reduces the city’s environmental footprint by cutting “annual energy wastage.”

4. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies and planning.

     The article explicitly mentions several national and regional policies that support the demand for electrical steel due to its climate benefits. These include the “U.S. Inflation Reduction Act, EU’s Green Deal, and India’s National Smart Grid Mission,” which are all examples of integrating climate and energy efficiency goals into national planning.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Energy Savings in Megawatt-Hours

   The article provides a specific, quantifiable indicator of progress towards energy efficiency (Target 7.3). The Shenzhen project is “estimated to cut annual energy wastage by thousands of megawatt-hours,” which is a direct measurement of improved efficiency in an urban energy system.

2. Market Growth and Investment

   The projected growth of the electrical steel market, from “USD 47.8 billion in 2025” to “USD 88.9 billion by 2035,” serves as a financial indicator for investment in sustainable infrastructure and technologies (Targets 9.1 and 9.4). This growth reflects rising demand for the materials needed to build efficient grids and EVs.

3. Adoption Rate of Advanced Materials

   The article implies progress can be measured by the rate of adoption of superior technologies. Examples include “EV manufacturers like Tesla and BYD have shifted toward specialized NGOES grades” and the increasing use of “low-carbon, high-grade electrical steel” in Europe. The projection that “EV-related electrical steel consumption alone could account for over 20% of the total market by 2035” is a specific future indicator of this adoption.

4. Implementation of Supporting Policies

   The existence and implementation of policies like the “U.S. Inflation Reduction Act, EU’s Green Deal, and India’s National Smart Grid Mission” are themselves indicators of national commitment to integrating climate measures into planning (Target 13.2).

4. Summary of SDGs, Targets, and Indicators

Source: openpr.com