DECARBONIZING THE STEEL SECTOR

The steel sector is the highest CO2 emitter among heavy industries, accounting for 11% of global CO2 emissions. The report highlights that the dominant blast furnace to basic oxygen furnace (BF-BOF) route is highly carbon-intensive due to its reliance on metallurgical coal. To meet the 1.5°C target, the IEA suggests steel emissions must drop by 25% by 2030 and 92% by 2050. The document emphasizes a critical investment window, as over 70% of existing coal-fired blast furnaces need refurbishing by 2030. Reclaim Finance recommends that financial institutions end support for new metallurgical coal mines and coal-based steel facilities, instead prioritizing electric arc furnaces (EAF) and hydrogen-based direct reduced iron (HDRI).

• Steel production is the most significant CO2 emitter among heavy industries, contributing approximately 11% of global CO2 emissions and 7% of total greenhouse gas emissions. In 2019, the sector's direct CO2 emissions were 2.6 gigatonnes, which is more than the total CO2 emissions from all road freight that same year.
• The blast furnace to basic oxygen furnace (BF-BOF) route, which represents about 70% of global production, is the most emissions-intensive method. It relies on metallurgical coal for 75% of the sector's energy needs and emits between 1.5 and 3 tons of CO2 per tonne of steel produced.
• To maintain the 1.5°C target, the IEA Net Zero by 2050 report requires steel emissions to decrease by 25% by 2030 and nearly 92% by 2050. This necessitates a 30% reduction in metallurgical coal production by 2030 and an 88% reduction by 2050, relative to 2021 levels.
• In Europe, coal-fired blast furnaces became the primary CO2 emitters in seven countries in 2019—the UK, France, Spain, Austria, the Netherlands, Finland, and Slovakia—surpassing coal power plants.
• Decarbonization can be achieved through three main solution groups: reducing steel use, increasing efficiency and recycling, and developing new technologies. Key low-carbon technologies include recycled electric arc furnace (EAF) steel with renewable electricity and hydrogen-based direct reduced iron (HDRI) to EAF.
• There is an urgent need for investment as over 70% of existing coal-fired blast furnaces—responsible for 2.2 Gt of carbon emissions—require refurbishing by 2030. Transitioning the global steel base to net-zero technologies would require an additional annual investment of US$8 to US$11 billion through 2050.
• Reclaim Finance urges financial institutions to cease all direct support for new metallurgical coal mines and coal-based steelmaking facilities, including new BF-BOFs, expansions, and retrofits.

APA

Rocamora, C., & Pinson, L. (2023). DECARBONIZING THE STEEL SECTOR. Reclaim Finance. https://reclaimfinance.org/site/wp-content/uploads/2023/03/Reclaim_Finance_Steel_Decarbonization_2023-1-1.pdf

Chicago

Rocamora, Cynthia, and Lucie Pinson. DECARBONIZING THE STEEL SECTOR. Reclaim Finance, 2023. https://reclaimfinance.org/site/wp-content/uploads/2023/03/Reclaim_Finance_Steel_Decarbonization_2023-1-1.pdf.

Wikipedia

{{cite report |last1=Rocamora |first1=Cynthia |last2=Pinson |first2=Lucie |title=DECARBONIZING THE STEEL SECTOR |publisher=Reclaim Finance |date=March 2023 |url=https://reclaimfinance.org/site/wp-content/uploads/2023/03/Reclaim_Finance_Steel_Decarbonization_2023-1-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rocamora2023decarbonizing, author = {Rocamora, Cynthia and Pinson, Lucie}, title = {{DECARBONIZING THE STEEL SECTOR}}, institution = {Reclaim Finance}, year = {2023}, month = mar, url = {https://reclaimfinance.org/site/wp-content/uploads/2023/03/Reclaim_Finance_Steel_Decarbonization_2023-1-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }