From ‘hard-to-abate’ to net-zero: Policy priorities for decarbonising steel by 2050

This briefing from the Stockholm Environment Institute outlines pathways for the global steel sector to achieve net-zero emissions by 2050. It highlights the necessity of transitioning away from conventional blast furnaces by 2025 to avoid stranded assets and catastrophic climate impacts, emphasizing a mix of hydrogen-based direct reduced iron (HDRI), carbon capture and storage (CCS), and increased recycling. The document stresses the critical role of policy-makers in providing clean energy, creating lead markets, and fostering international cooperation, specifically mentioning the Glasgow Breakthrough on Steel.

• The steel sector is a significant source of global emissions, accounting for 7% of global greenhouse gas (GHG) emissions and 10% of global CO2 emissions in 2018. Without a major industry shift, steelmaking could emit an additional 90 Gt of CO2 by 2050, which represents nearly 20% of the remaining global CO2 budget for a 50% chance to limit global warming to 1.5°C.
• Multiple analyses indicate that the steel sector can be almost fully decarbonised by 2050. This can be achieved through a combination of retrofitting blast furnaces with carbon capture and storage (CCS), scaling up hydrogen-based direct reduced iron (HDRI), increasing steel recycling, and improving steel use efficiency to slow demand growth.
• To prevent the creation of stranded assets and avoid locking in high emissions, the industry must stop adding new blast furnaces and stop relining existing ones without CCS by approximately 2025. This is critical because these furnaces have average lifetimes of 20–25 years.
• Hydrogen-based technologies are central to net-zero scenarios. The Mission Possible Partnership (MPP) suggests that 40–55% of primary steel production in 2050 could use hydrogen-based technologies, which would require 35–55 Mt of green hydrogen annually. Hydrogen steelmaking may become cost-competitive with CCS when zero-carbon hydrogen prices reach $2.20–2.90/kg in the late 2020s.
• Material efficiency and recycling are immediate mitigation tools. One study indicates that scaling up steel recycling and adopting material efficiency measures could provide 50% of the mitigation required by 2050 to stay on a 1.5°C trajectory.
• Policy interventions are necessary to bridge the cost gap, as operating costs for first-of-a-kind low-emission plants could be up to 55% higher in the 2020s than conventional methods. A carbon price of approximately US$70 could avoid up to 1.3 Gt CO2 of steel emissions by 2030.
• International cooperation is vital because demand growth is primarily driven by developing and emerging economies in Asia. The Glasgow Breakthrough on Steel, announced at COP26, involves countries representing 32% of global steel production (including the EU, US, Japan, Korea, and India, but excluding China) collaborating on innovation, standards, and finance.

APA

Stockholm Environment Institute (n.d.). From ‘hard-to-abate’ to net-zero: Policy priorities for decarbonising steel by 2050. https://www.sei.org/wp-content/uploads/2021/11/cop26-steel-messages-20211103.pdf

Chicago

Stockholm Environment Institute. From ‘hard-to-abate’ to net-zero: Policy priorities for decarbonising steel by 2050. n.d. https://www.sei.org/wp-content/uploads/2021/11/cop26-steel-messages-20211103.pdf.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=From ‘hard-to-abate’ to net-zero: Policy priorities for decarbonising steel by 2050 |url=https://www.sei.org/wp-content/uploads/2021/11/cop26-steel-messages-20211103.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitutendfrom, author = {{Stockholm Environment Institute}}, title = {{From ‘hard-to-abate’ to net-zero: Policy priorities for decarbonising steel by 2050}}, institution = {Stockholm Environment Institute}, url = {https://www.sei.org/wp-content/uploads/2021/11/cop26-steel-messages-20211103.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }