Decarbonizing the Steel Industry - 2025

The steel industry is responsible for approximately 8% of global CO2 emissions and is considered a hard-to-abate industry due to its reliance on coal to meet energy and feedstock demands in primary production.

In addition, according to the World Economic Forum, steel demand is projected to rise 30% by 2050 and will be bolstered by the roll-out of energy transition technologies such as wind power.

As a result, decarbonizing the steel industry has become crucial for achieving net-zero goals.

This report assesses the suitability of energy transition technologies such as secondary stream manufacturing, electrification, hydrogen, and CCUS, all of which hold significant decarbonization potential for steel. Additionally, this report also presents an overview of emissions performance, as well as both interim climate and net-zero targets from a selection of steel producers. This provides an outlook on industry progress towards decarbonization.

Many energy transition technologies are still emerging and remain expensive. This is particularly challenging in the steel industry as it is inherently capital-intensive. As a result, steel producers may be more hesitant to adopt unproven technologies due to associated financial risks.

H2 Direct Reduction of Iron (H2DRI) and electric arc furnaces (EAFs) are currently the most promising routes for emission reduction from the steel industry. However, both methods face several challenges that hinder their widespread adoption. For H2-DRI, its dependence on cost competitive green hydrogen will be a major limiting factor for the immediacy of its decarbonization impact. For EAFs, the availability of scrap steel poses a big challenge. The global recycling rate is estimated to be around 85%, with limited room for improvement.

Key Highlights

• According to the IEA, coal meets around 75% of the energy and feedstock demand of the steel industry. Due to its dependence on coal, steel manufacturing remains one of the largest sources of industrial carbon emissions globally, responsible for approximately 8% of CO2 emissions.
• In most cases, steel producers are targeting 2050 as the year to achieve net-zero. However, Cleveland-Cliffs, Nucor, and Thyssenkrupp have outlined more aspirational targets that encompass scope 1, 2 and 3 emissions.
• ArcelorMittal achieved the highest emissions reduction across both 2020 to 2024 and 2023 to 2024. This reduction can be attributed to a combination of over $1 billion invested in decarbonization technologies since 2018 and the sale of its higher carbon footprint assets.

Scope

• Overview of steel emissions, global steel production, and what the net-zero scenario for steel looks like.
• Net-zero targets for selected steel companies
• Analysis of steel companies' interim emission targets
• Steel companies' Scope 1 and 2 emissions data
• Analysis of different decarbonization technologies (secondary stream manufacturing, electrification, hydrogen, and CCUS), including an assessment of their development stage and suitability for the steel industry
• Macroeconomic challenges facing the decarbonization of steel
• Case study examples of decarbonization technology use within steel

Reasons to Buy

• Identify the market trends within the industry and assess what the biggest players in steel are doing to reduce emissions.
• Develop market insight of the major technologies used to decarbonize the industry, including an assessment of their development stage and suitability for the steel industry, alongside the drivers and barriers to their implementation.
• Facilitate the understanding of what is happening within hard-to-abate industries as they look to become carbon neutral by 2050.