Pedal to the Metal 2026

The report 'Pedal to the Metal 2026' by Global Energy Monitor analyzes the global iron and steel industry's struggle to decarbonize, highlighting a 'coal lock-in crisis' where continued investment in blast furnace (BF) capacity and relining of existing assets threaten net-zero targets despite incremental gains in electric arc furnace (EAF) and direct reduced iron (DRI) technologies.

• The global steel industry faces a significant coal lock-in risk due to ongoing blast furnace (BF) expansion. There is 319 mtpa of BF capacity under development, and net additions are projected to reach 73 mtpa by 2030 and 88 mtpa by 2035. Additionally, 80 mtpa of existing BF capacity is undergoing or has planned relining, signaling long-term operational intent.
• Electric arc furnace (EAF) capacity is increasing its share of the global operating fleet, rising from 31% in 2022 to 34% (727 mtpa) in 2026. EAF technology now represents 50% of all steelmaking capacity under development and 71% of projects that have already broken ground.
• India is the primary driver of global steelmaking development, accounting for 42% (357 mtpa) of all developing capacity. The country is responsible for over 60% of upcoming BF-BOF capacity globally, and approximately 93% of its developing ironmaking capacity relies on coal-based technology.
• China maintains the world's largest steelmaking capacity at 1,073 mtpa, with 48% of the global total. While China is shifting toward EAF (which makes up 39% of its developing capacity compared to 17% of existing capacity), 94% of its massive BF fleet has no retirement plan.
• Direct reduced iron (DRI) capacity is expanding rapidly and could increase by 141% if all developments proceed, reaching 296 mtpa by 2035. However, the majority of operating DRI currently uses fossil gas (83%) or coal (17%), with only 2% (4 mtpa) using green hydrogen as a primary reductant.
• Green hydrogen is a critical but bottlenecked technology for decarbonization. While only 2% of operating DRI uses green hydrogen, 19% of planned DRI capacity with a known reductant is intended to use hydrogen upon startup.
• Metallurgical coal production is led by China (970 mtpa, 63% of global capacity), followed by Australia (234 mtpa, 15%). India is particularly dependent on coal imports to sustain its ironmaking, consuming nearly three times the 24 mtpa of met coal it mines.
• Induction furnaces (IFs) account for approximately 1% (27 mtpa) of operating steelmaking capacity. Unlike EAFs, which use 71% scrap, IFs rely heavily on sponge iron (73%), much of which is produced in emissions-intensive coal-based rotary kilns.
• The European Union's Carbon Border Adjustment Mechanism (CBAM), effective January 2026, imposes a carbon price on imported steel. This significantly impacts high-emissions producers, with India facing a 32% cost increase under the mechanism.

APA

Grigsby-Schulte, A., Liu, F., Swalec, C., Almada, R., Cleland, L., Dalisay, C., Zhang, Z., & Zhi, J. (2026). Pedal to the Metal 2026. Global Energy Monitor. https://globalenergymonitor.org/sites/default/files/2026-05/Pedal%20to%20the%20Metal%202026.pdf

Chicago

Grigsby-Schulte, Astrid, Fanwei Liu, Caitlin Swalec, Rolando Almada, Larkin Cleland, Charmaine Dalisay, Ziwei Zhang, and Jessie Zhi. Pedal to the Metal 2026. Global Energy Monitor, 2026. https://globalenergymonitor.org/sites/default/files/2026-05/Pedal%20to%20the%20Metal%202026.pdf.

Wikipedia

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BibTeX

@techreport{grigsbyschulte2026pedal, author = {Grigsby-Schulte, Astrid and Liu, Fanwei and Swalec, Caitlin and Almada, Rolando and Cleland, Larkin and Dalisay, Charmaine and Zhang, Ziwei and Zhi, Jessie}, title = {{Pedal to the Metal 2026}}, institution = {Global Energy Monitor}, year = {2026}, month = may, url = {https://globalenergymonitor.org/sites/default/files/2026-05/Pedal%20to%20the%20Metal%202026.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }