Emission Reduction Barriers in the Steel Industry

Steel will be a crucial component of several decarbonisation technological advances, including windmills, electric automobiles, and improved production methods, making it an essential component of the energy revolution. A green economy cannot function without steel, yet its production is an emission-intensive process that contributes to 7% of the global carbon footprint. Optimizations of recycling materials and manufacturing techniques can result in significant emission savings. However, due to the lack of vital resources and cyclical developments, over 65% of the steel in the mid-century is expected to be produced from initial, ore-based manufacturing due to limitations on both the amount and the standard of accessible waste. Thus, it will become essential to develop innovative technologies for substituting coal as an energy source or reducing agent with a fossil-free substitute. Although a few of these innovations have already been validated, they are yet to be utilized extensively. 

Based on industry aggregates, the production of 1 ton of raw steel generates 1.4 tons of direct carbon emissions and more than 0.5 tons of indirect carbon emissions. Currently, three of the primary technologies of manufacturing – electric arc furnace (EAF), sponge iron – EAF, and blast furnace – are used to produce steel globally. However, each geography has a substantially distinct combination of the above technologies. It is difficult to reduce steel production considering its high demand. In the last twenty years, the world’s supply of crude steel increased twofold, and by 2050, an additional 30% rise is expected. Urbanization in emerging nations is the main driver of this expansion. Reduced output and regional variation in consumer demand make it difficult to cut the emissions associated with steel. The green steel manufacturing techniques, which facilitate near-zero emissions, are expensive as they require 90% more capital compared to the latest manufacturing techniques.

Factors that make steel decarbonization challenging:

  • Maturity level of production technologies: This is determined by rating the maturity level of environmentally friendly technologies on a scale from 1 (low) to 9 (high). Current technologies have low technological readiness levels (TRL) or maturity levels; however, none of these solutions have touched the highest TRL. They are all predicted to be accessible to businesses by the mid-2020s or later.


  • Prolonged lifespan of capital investments: Due to the high capital requirements of the steel manufacturing procedure, upgrading and converting manufacturing technologies to carbon-neutral options is most advantageous near the last phase of the lifecycle of a steel mill. However, all steel plants, mills, and factories are not eligible for carbon-neutral renovations due to the high lifespan of the investments. For example, a blast furnace possesses an average life of two decades, and greenfield steel transformation initiatives also take a long time to complete.


  • Aggressive competition in the market: The steel sector’s international merchandised market may reduce its ability to compete effectively, since opting for early decarbonization efforts would cause economic disadvantage to steel producers due to the hefty charges they may have to pay for these efforts.

Approaches Promoting Steel Decarbonization

  • Limiting steel demand while promoting waste recycling. The two main models of projected steel demand are business as usual (BAU) and higher rotundity. According to BAU, the demand for raw steel would most certainly increase by 30% by mid-century, particularly in emerging and low-income countries.


  • Creating and executing innovative carbon-free steel production technologies since the existing ones cannot really eradicate the effects of noxious emissions. To reduce the pollution associated with steel production, carbon-free power and hydrogen can be employed. These substitutes offer zero-carbon options for powering needs, such as extreme heat production, and they can also operate electrolysis systems and electroextraction technologies.


  • Leveraging carbon capture utilization and storage (CCUS) technologies to obtain carbon emissions that cannot be ignored. These technologies can combat energy usage and operational emissions generated during the production of steel. Strategies for capturing carbon, such as direct air carbon capture, will remain important in tackling neglected emissions. Additionally, projects such as Ultra-Low CO2 Steelmaking (ULCOS) and other cooperative studies, have also increased the knowledge of technological routes for decarbonizing the steel industry.


  • Consider geographical variations and feasible alternatives while choosing manufacturing technology since these factors will vary for each organization and each nation. For instance, while carbon sequestration methods are more advantageous where facilities have a CO2 repository or are situated close to industrial areas, carbon-free electricity-based solutions are more prevalent where facilities have affordable carbon-neutral energy.


  • Partnerships between steel producers and suppliers and favorable financing and regulatory conditions are required for a solid economic justification to advance from technological verification to practical implementation.




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