Carbon Control and Competitiveness Post 2020: The Steel Report

The report identifies a portfolio of low-carbon opportunities for the European steel sector, ranging from energy efficiency and fuel shifting to breakthrough technologies like Carbon Capture and Sequestration (CCS) and increased recycling. It argues that current EU ETS mechanisms, particularly free allocation based on historic volumes, fail to provide sufficient incentives for deep decarbonisation and high-value product innovation. The authors recommend a structural reform of leakage protection, specifically proposing a combination of output-based allocation and the inclusion of consumption in the EU ETS to create a credible business case for breakthrough technologies and material efficiency. The report also emphasizes the need for sustained public funding for process innovation to overcome the 'valley of death' in technology scaling and suggests strengthening links between steel producers and downstream consumers, particularly in the automotive and construction sectors, to drive demand for lightweight, high-strength steels.

• Energy efficiency improvements in primary steel production for European installations are estimated at 10-20%, but are typically only pursued if investment costs are recovered within 2-4 years.
• Shifting from coal to gas and electricity using the direct reduced iron (DRI) process combined with electric arc furnaces (EAF) can reduce primary steel production emissions by 20-40%, though high European gas prices currently make this economically unattractive.
• Breakthrough technologies and Carbon Capture and Sequestration (CCS) are essential for emission reductions of 50% or more, but progress has stalled since 2012 due to funding discontinuities, risk allocation issues, and the lack of a robust EU ETS price.
• Material efficiency and lightweighting could reduce total steel requirements by 20-30%, with the automotive sector achieving 30-40% savings in body weight since 2005, while the building sector has seen little progress.
• Increasing steel recycling rates can save approximately 75% of emissions per ton of scrap recycled; currently, recovered scrap equals 64% of European steel consumption.
• The current EU ETS free allocation mechanism based on historic production volumes fails to create a business case for higher-value steels and risks undermining incentives for breakthrough technologies like CCS.
• The report proposes a policy combination of output-based allocation and the inclusion of consumption in the EU ETS to incentivize both upstream efficiency and downstream material efficiency.
• The HIsarna process has demonstrated a potential to cut CO2 emissions by 20%, and up to 80% if combined with CCS, but requires significant scaling up for commercial application.
• Public funding for steel R&D is often fragmented into short-term projects, which is poorly suited for the long-term, capital-intensive nature of process innovation; the RFCS spent only 6% of its steel R&D budget between 2003 and 20 la on ULCOS.
• The report suggests that a consumption-based charge for carbon embedded in steel would be a parafiscal charge, allowing it to be implemented via qualified majority rather than unanimous vote in the European Council.

APA

Neuhoff, K., Acworth, W., Ancygier, A., Branger, F., Christmas, I., Haussner, M., Ismer, R., van Rooij, A., Sartor, O., Sato, M., & Schopp, A. (2014). Carbon Control and Competitiveness Post 2020: The Steel Report. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2016/01/20141014-Steel-report-Final-ms.pdf

Chicago

Neuhoff, Karsten, William Acworth, Andrzej Ancygier, Frédéric Branger, Ian Christmas, Manuel Haussner, Roland Ismer, et al. Carbon Control and Competitiveness Post 2020: The Steel Report. Climate Strategies, 2014. https://climatestrategies.org/wp-content/uploads/2016/01/20141014-Steel-report-Final-ms.pdf.

Wikipedia

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BibTeX

@techreport{neuhoff2014carbon, author = {Neuhoff, Karsten and Acworth, William and Ancygier, Andrzej and Branger, Frédéric and Christmas, Ian and Haussner, Manuel and Ismer, Roland and van Rooij, Arjan and Sartor, Oliver and Sato, Misato and Schopp, Anne}, title = {{Carbon Control and Competitiveness Post 2020: The Steel Report}}, institution = {Climate Strategies}, year = {2014}, month = oct, url = {https://climatestrategies.org/wp-content/uploads/2016/01/20141014-Steel-report-Final-ms.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }