I was looking at what the future of steel might look like recently, I think this is quite interesting https://www.hybritdevelopment.se/en/

Luxembourgh has a huge steel industry, relative to the size of its GDP. As I understand, they switched to electric arc furnaces. Yes, it seems possible, but difficult. Also, I don't know if there are limitations on these furnaces. Example: Can you only recycle scrap metal or produce certain types of (lower grade) steel? Unsure.

Those furnaces are for removing the oxygen from the iron oxide, so they're not needed for scrap metal. The CO2 emissions from smelting iron is due in large part to that reduction process, not just the heating.