Reline or Revitalize: The Narrowing Window to Modernize the US Steel Industry

The report warns that 'relining' seven aging coal-based blast furnaces in the US Great Lakes region is a multi-billion dollar risk that locks in high emissions and health-harming pollution for another 20 years. While these plants represent only about a quarter of US steel production, they generate approximately 75 percent of the industry's emissions. The authors argue that instead of spending $150M to $425M per furnace on relines, companies should invest in hydrogen-ready Direct Reduction (DRI) coupled with electric arc furnaces (H2-DRI-EAF), which can achieve near-zero carbon emissions. Although a new DRI plant costs more ($600M to $800M) and faces a near-term energy cost gap of approximately $2.50/kg H2 compared to coal, the transition is projected to protect skilled union jobs and create additional employment in renewable energy and hydrogen production. The report concludes that federal and state support—via tax credits, grants, and infrastructure investment—is necessary to close the remaining economic gap and avoid stranded assets.

• Seven coal-based blast furnaces in Indiana, Michigan, Ohio, and Pennsylvania account for 31% of domestic US steel production and employ 18,000 workers, but they are responsible for approximately 75 percent of the industry's emissions.
• Relining aging blast furnaces, which typically costs between $150M and $425M to extend operations for 20 years, risks creating stranded assets and perpetuating severe health risks, as all operating blast furnaces are in the worst 15 percent of industrial plants in their states for predicted health risk.
• Current decarbonization strategies for blast furnaces, such as hydrogen (H2) injection and carbon capture, utilization and storage (CCUS), are insufficient; H2 injection reduces direct emissions by about 20%, and a planned CCUS project at Gary Works would capture less than 1 percent of total site-level process emissions.
• Transitioning to a 100 percent renewable-powered H2 DRI coupled with an electric arc furnace (H2-DRI-EAF) is the most promising pathway to near-zero emissions, though it requires a higher capital investment of $600M to $800M for a new DRI and faces a near-term energy cost gap of approximately $2.50/kg H2 compared to coal.
• A shift to hydrogen-based DRI-EAF is projected to maintain comparable direct employment levels to coal-based steelmaking while adding approximately 750 full-time upstream jobs for renewables and hydrogen per 2 Mpta of steel production, plus an additional 2,290 indirect and induced jobs.

APA

RMI (2025). Reline or Revitalize: The Narrowing Window to Modernize the US Steel Industry. https://rmi.org/resources/reline-or-revitalize-the-narrowing-window-to-modernize-the-us-steel-industry/

Chicago

RMI. Reline or Revitalize: The Narrowing Window to Modernize the US Steel Industry. 2025. https://rmi.org/resources/reline-or-revitalize-the-narrowing-window-to-modernize-the-us-steel-industry/.

Wikipedia

{{cite report |author=RMI |title=Reline or Revitalize: The Narrowing Window to Modernize the US Steel Industry |date=30 January 2025 |url=https://rmi.org/resources/reline-or-revitalize-the-narrowing-window-to-modernize-the-us-steel-industry/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025reline, author = {{RMI}}, title = {{Reline or Revitalize: The Narrowing Window to Modernize the US Steel Industry}}, institution = {RMI}, year = {2025}, month = jan, url = {https://rmi.org/resources/reline-or-revitalize-the-narrowing-window-to-modernize-the-us-steel-industry/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }