DRAFT CORPORATE CLIMATE STOCKTAKE: STEEL SECTOR

The global steel sector faces significant challenges in decarbonization, with emissions intensity growing by 0.5% annually since 2010. While hydrogen-based Direct Reduced Iron (H-DRI) and Electric Arc Furnaces (EAF) offer paths to near-zero emissions, their deployment is hindered by high costs, limited green hydrogen supply, and a shortage of high-grade iron ore. The report highlights a geographic divide: the EU and US are shifting toward low-emission tech supported by subsidies and carbon pricing, while high-growth regions like India continue to expand high-emission Blast Furnace-Basic Oxygen Furnace (BF-BOF) capacity. Carbon Capture and Storage (CCS) is viewed as a necessary but expensive tool for abating existing capacity, though commercial-scale projects remain limited.

• Global steel emissions intensity has increased by 0.5% annually since 2010, whereas a reduction of more than 3% per year is necessary to meet 2030 targets.
• The steel industry is dominated by the Blast Furnace-Basic Oxygen Furnace (BF-BOF) route, which accounts for 71.5% of 2022 production and has an average emissions intensity of approximately 2.1 t CO2 per tonne of crude steel.
• Hydrogen-based Direct Reduced Iron (H-DRI) combined with Electric Arc Furnaces (EAF) can reduce emissions intensity by 70-95% compared to traditional blast furnaces, but costs remain over 20% higher.
• A significant bottleneck exists in the deployment of DRI technology due to the concentration of engineering and construction capabilities; total combined DRI construction capacity is estimated at approximately 70 Mt by 2030.
• The availability of high-grade iron ore (with >66% iron content) is a critical constraint for DRI deployment, as only about 3% of iron ore currently shipped meets this grade.
• India is currently the world's leading developer of coal-driven steel capacity, accounting for 40% of global BF-BOF projects underway, with capacity expected to triple by 2030 to over 300 Mt.
• China aims to increase the share of EAF production to 15% by 2025 and 20% by 2030, leveraging a projected 70% increase in scrap supply by 2030.
• National scrap export restrictions in approximately 43 countries risk distorting markets and hindering the ability of non-OECD countries to expand DRI-EAF production.
• Carbon Capture and Storage (CCS) can reduce direct CO2 emissions from blast furnaces by approximately 70-73%, but high CAPEX costs and lack of infrastructure limit commercial-scale adoption.
• In the EU and US, debt financing interest rates for new blast furnace projects are reported to be more than 25 basis points higher than for low-emission projects, as lenders perceive high-emission capacity as higher risk.

APA

We Mean Business Coalition (2023). DRAFT CORPORATE CLIMATE STOCKTAKE: STEEL SECTOR. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2023/11/Corporate-Climate-Stocktake_Steel_WMBC.pdf

Chicago

We Mean Business Coalition. DRAFT CORPORATE CLIMATE STOCKTAKE: STEEL SECTOR. 2023. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2023/11/Corporate-Climate-Stocktake_Steel_WMBC.pdf.

Wikipedia

{{cite report |author=We Mean Business Coalition |title=DRAFT CORPORATE CLIMATE STOCKTAKE: STEEL SECTOR |date=October 2023 |url=https://www.wemeanbusinesscoalition.org/wp-content/uploads/2023/11/Corporate-Climate-Stocktake_Steel_WMBC.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wemeanbusinesscoalition2023draft, author = {{We Mean Business Coalition}}, title = {{DRAFT CORPORATE CLIMATE STOCKTAKE: STEEL SECTOR}}, institution = {We Mean Business Coalition}, year = {2023}, month = oct, url = {https://www.wemeanbusinesscoalition.org/wp-content/uploads/2023/11/Corporate-Climate-Stocktake_Steel_WMBC.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }