STEELING OUR FUTURE

The report 'Steeling Our Future' by Reclaim Finance analyzes the financing of the 100 largest steel producers, finding that banks provided US$429 billion to these companies between 2016 and June 2023. It highlights a critical gap between banks' climate commitments and their continued support for coal-based blast furnace (BF-BOF) production, which accounts for nearly 90% of steel sector emissions. The document argues that current decarbonization targets are insufficient and calls for an immediate end to financing for new blast furnaces and the relining of existing ones to avoid stranded asset risks estimated at US$554 billion. It advocates for a shift toward hydrogen-based direct reduction of iron (HDRI) and electric arc furnaces (EAF) powered by sustainable electricity.

• Between 2016 and June 2023, 354 banks provided US$429 billion to the 100 largest steel producers, with the top 50 banks contributing US$326 billion of that total.
• The steel industry's reliance on coal, specifically the blast furnace to basic oxygen furnace (BF-BOF) route, is the primary driver of its climate impact, accounting for nearly 90% of the sector's emissions.
• Bank commitments to steel decarbonization are largely inadequate; among the top 50 banks analyzed, only 17 have adopted decarbonization targets and only one (ING) has a specific steel policy, which the report describes as too weak to be effective.
• There is a significant risk of stranded assets in the steel industry, estimated at up to US$554 billion, if planned new coal-based capacity is built, as these assets are incompatible with 1.5°C warming goals.
• A large portion of planned new steel capacity continues to rely on carbon-intensive methods, with at least 57% of planned new capacity using the coal-based BF-BOF route.
• Relining existing blast furnaces to extend their operational life locks in carbon emissions; over 70% of existing blast furnaces will require reinvestment by 2030, presenting a critical window for transitioning to fossil-free methods.
• Carbon Capture, Utilization and Storage (CCUS) is viewed as an insufficient solution for steel because it does not eliminate the use of coal and has a history of failure, with no full-scale CCUS facilities for blast furnaces currently in operation.
• Hydrogen-based Direct Reduction of Iron (HDRI) paired with Electric Arc Furnaces (EAF) and sustainable electricity is identified as the most promising path to deep decarbonization, potentially reducing process emissions by 91%.
• Major steel producers like ArcelorMittal and Nippon Steel are criticized for pursuing 'two-speed' strategies, investing in clean tech in Europe and Canada while expanding coal-based blast furnaces in India.

APA

Rocamora, C., Her, H., Miomandre, L., Lassus, J., Oakley, H., Marchal, E., & Martin, L. (2024). STEELING OUR FUTURE. Reclaim Finance. https://reclaimfinance.org/site/wp-content/uploads/2024/03/Steeling-_our_future_March_2024.pdf

Chicago

Rocamora, Cynthia, Henri Her, Léa Miomandre, Julie Lassus, Hele Oakley, Edouard Marchal, and Léo Martin. STEELING OUR FUTURE. Reclaim Finance, 2024. https://reclaimfinance.org/site/wp-content/uploads/2024/03/Steeling-_our_future_March_2024.pdf.

Wikipedia

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BibTeX

@techreport{rocamora2024steeling, author = {Rocamora, Cynthia and Her, Henri and Miomandre, Léa and Lassus, Julie and Oakley, Hele and Marchal, Edouard and Martin, Léo}, title = {{STEELING OUR FUTURE}}, institution = {Reclaim Finance}, year = {2024}, month = mar, url = {https://reclaimfinance.org/site/wp-content/uploads/2024/03/Steeling-_our_future_March_2024.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }