Supporting the decarbonisation of the steel sector

The steel sector accounts for 11% of global CO2 emissions, primarily due to the blast furnace-basic oxygen furnace (BF-BOF) route which relies on metallurgical coal. While secondary steelmaking via electric arc furnaces (EAF) and green hydrogen-based Direct Reduction of Iron (DRI) offer cleaner alternatives, coal-based capacity continues to grow, with 80 million tons of annual capacity planned for relining. The document highlights that ArcelorMittal has weakened its 2030 emissions intensity reduction target from 25% to 10% and prioritizes shareholder returns over decarbonization. It calls on financial institutions to adopt corporate-level exclusion policies for metallurgical coal and stop financing the relining of blast furnaces.

• The steel industry is a major contributor to global warming, producing 8% of global greenhouse gas emissions and 11% of global CO2 emissions. The primary driver is the blast furnace-basic oxygen furnace (BF-BOF) route, which represents 66% of global production and 88% of the sector's total CO2 emissions.
• Technological alternatives to coal exist, including secondary steelmaking using electric arc furnaces (EAF)—which is seven times less carbon-intensive than primary steelmaking—and Direct Reduction of Iron (DRI) using green hydrogen. These advances could potentially eliminate coal from the sector by the mid-2040s.
• Despite the availability of cleaner technology, coal-based steel production is expanding. BF-BOF accounts for 40% of capacity under development, and blast furnaces with a total capacity of 80 million tons per annum are planned for relining, which extends their operational life by 15 to 20 years.
• ArcelorMittal has failed to meet its own climate goals, reducing its group-level 2030 emissions intensity reduction target from 25% to 10% and removing its Europe-specific target of 35%. Between 2021 and 2025, the company allocated 12 billion USD to shareholder returns compared to 1.1 billion USD for decarbonation.
• Financial institutions are lagging in addressing demand-side emissions; only 12 major institutions have metallurgical coal exclusion policies, and most apply only at the project level. This allows continued financing for companies like Glencore, BHP, Mitsubishi, and AngloAmerican, who are involved in 273 metallurgical coal expansion projects that could increase global production by 50%.

APA

Reclaim Finance (2023). Supporting the decarbonisation of the steel sector. https://reclaimfinance.org/site/en/supporting-the-decarbonisation-of-the-steel-sector/

Chicago

Reclaim Finance. Supporting the decarbonisation of the steel sector. 2023. https://reclaimfinance.org/site/en/supporting-the-decarbonisation-of-the-steel-sector/.

Wikipedia

{{cite report |author=Reclaim Finance |title=Supporting the decarbonisation of the steel sector |date=16 March 2023 |url=https://reclaimfinance.org/site/en/supporting-the-decarbonisation-of-the-steel-sector/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{reclaimfinance2023supporting, author = {{Reclaim Finance}}, title = {{Supporting the decarbonisation of the steel sector}}, institution = {Reclaim Finance}, year = {2023}, month = mar, url = {https://reclaimfinance.org/site/en/supporting-the-decarbonisation-of-the-steel-sector/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }