A new report released by Indiana University’s Environmental Resilience Institute (ERI) finds that modernizing Northwest Indiana’s steel industry with cleaner, more advanced technologies could secure the region’s steelmaking future, protect thousands of jobs, and dramatically reduce pollution affecting Hoosier communities.
The report, Jobs in the Balance: Building Toward a Clean Steel Transition in Indiana, is a collaboration between ERI and 5 Lakes Energy and was commissioned by Indiana Conservation Voters. Using new modeling of employment projections and air quality benefits associated with facility-wide conversions to clean steelmaking, report authors show that the cost to invest in modern technology in Northwest Indiana is in range of capital commitments already announced by the region’s two coal-based steelmakers.
The research comes as Nippon Steel and Cleveland-Cliffs seek to spend roughly $350 million each to reline blast furnaces at Gary Works this year and Burns Harbor in 2027, extending the operating life of outdated coal-based steel technology into the 2040s.
While Nippon Steel and others are investing in next-generation steel plants in other parts of the country, no such investments are currently planned for Northwest Indiana.
“Northwest Indiana has been the backbone of American steelmaking for generations,” said ERI Executive Director Gabriel Filippelli, a report co-author. “But the technologies that built that legacy are now putting the region at a competitive disadvantage. Our analysis shows that modernizing these mills offers a path to slow or reverse decades of job losses while ensuring the industry has a future in Indiana.”
Northwest Indiana is home to three of the nation’s seven remaining primary steel mills — Burns Harbor, Indiana Harbor, and Gary Works — which together produce roughly 47% of the country’s primary steel. However, these facilities rely heavily on coal-based blast furnace technology that has changed little in more than a century and is rapidly losing market share to modern alternatives.
At their mid-20th century height, Northwest Indiana steel mills employed more than 65,000 workers. Globalization, automation, and the rise of alternative steelmaking technologies, however, have reduced direct steel employment in the region to roughly 9,000 workers today. Without investments in modernization, researchers project that number could drop to fewer than 5,000 jobs by 2034.
Transitioning to modern steelmaking methods — such as direct reduced iron paired with electric arc furnaces or electric smelting furnaces — could help sustain long-term employment while creating thousands of new construction and clean-energy jobs tied to facility upgrades and expanded electricity generation.
“These technologies are already being deployed across the United States and globally,” said 5 Lakes Energy Lead Consultant Elizabeth Boatman, who contributed to the report. “If Indiana invests in modernization now, the state can remain a national leader in steel while capturing new economic opportunities tied to clean energy and advanced manufacturing.”
Researchers lay out several practical pathways to transition Northwest Indiana steel mills to modern steelmaking technologies, estimating costs to be roughly $1.5–2.2 billion per facility for partial modernization and $2.8–3.6 billion for full modernization — well within the scope of steel companies’ recent capital investments.
Beyond economic benefits to workers and the broader Indiana economy, researchers highlight significant public health improvements associated with modern steel production. The current coal-intensive process produces large amounts of air pollution, including carbon dioxide, sulfur dioxide, nitrogen oxides, and fine particulate matter.
Researchers estimate that air pollution from Northwest Indiana’s steel mills contributes to about $100 million in healthcare costs annually, along with hundreds of respiratory emergency room visits and tens of thousands of lost work and school days each year.
Modern steel technologies could reduce key air pollutants by roughly 50– 60%, while also cutting climate-warming emissions by 45–76% depending on the energy source.
“Cleaner steelmaking wouldn’t just provide a boost to the economy of Northwest Indiana,” Filippelli said. “It would also lead to improved air and water quality, reduced healthcare costs for Hoosier families, and a higher quality of life for communities like Gary and East Chicago. The health and environmental benefits of making these investments would be transformational.”
