DEBUNKING 10 STEEL DECARBONIZATION MYTHS

The document argues that the steel sector is no longer 'hard-to-abate' due to advancements in green hydrogen and electric arc furnaces. It challenges the distinction between metallurgical and thermal coal, warns against reliance on CCUS, and highlights the risk of stranded assets. The briefing urges financial institutions to adopt strict sectoral policies to end financing for new blast furnaces and metallurgical coal projects while increasing investment in sustainable alternatives.

• The label 'hard-to-abate' for the steel sector is outdated because technological advancements, such as green hydrogen and direct electrification, allow for a faster transition. Research suggests the sector could be coal-free as early as 2043.
• Metallurgical coal is a demand-side classification rather than a distinct coal type; non-coking coals used in steelmaking can be identical in quality to thermal coals and are sometimes sold into power generation markets.
• Increasing global steel demand does not necessitate an increase in metallurgical coal demand. The IEA projects coking coal demand will drop from 941 Mtce in 2021 to 691 Mtce by 2050, as existing production is sufficient to cover needs.
• While fossil-free steel currently costs 30% to 60% more than coal-based steel, the impact on final production costs for automobiles and construction is less than 1%. Furthermore, continuing to invest in coal-based blast furnaces creates a stranded asset risk estimated between US$368 billion and US$554 billion.
• Carbon Capture, Utilization and Storage (CCUS) is deemed an ineffective and risky solution for steel because it does not eliminate the use of coal or upstream methane emissions, and no full-scale CCUS facilities for blast furnaces are currently in operation.
• The 2020s are a critical window for transition because over 70% of existing blast furnaces will reach the end of their operational lifetimes by 2030, meaning any relining now would lock in emissions for another 15 to 20 years.
• Steel production involves significant ESG risks beyond CO2, specifically methane emissions from coking coal mining, which accounted for 10 Mt in 2022, and severe human rights violations and pollution linked to companies like ArcelorMittal and Ternium in the Global South.
• Current financial institution targets for steel are insufficient as none target scope 3 emissions or methane, and most do not use absolute emissions metrics. The document recommends immediate cessation of financing for new blast furnaces and metallurgical coal projects.

APA

Rocamora, C. (2024). DEBUNKING 10 STEEL DECARBONIZATION MYTHS. Reclaim Finance. https://reclaimfinance.org/site/wp-content/uploads/2024/09/Reclaim_Finance_Steel_Myths_September_2024.pdf

Chicago

Rocamora, Cynthia. DEBUNKING 10 STEEL DECARBONIZATION MYTHS. Reclaim Finance, 2024. https://reclaimfinance.org/site/wp-content/uploads/2024/09/Reclaim_Finance_Steel_Myths_September_2024.pdf.

Wikipedia

{{cite report |last1=Rocamora |first1=Cynthia |title=DEBUNKING 10 STEEL DECARBONIZATION MYTHS |publisher=Reclaim Finance |date=September 2024 |url=https://reclaimfinance.org/site/wp-content/uploads/2024/09/Reclaim_Finance_Steel_Myths_September_2024.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rocamora2024debunking, author = {Rocamora, Cynthia}, title = {{DEBUNKING 10 STEEL DECARBONIZATION MYTHS}}, institution = {Reclaim Finance}, year = {2024}, month = sep, url = {https://reclaimfinance.org/site/wp-content/uploads/2024/09/Reclaim_Finance_Steel_Myths_September_2024.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }