Toward a Tradable, Low-Carbon Product Standard for Steel: Policy Design Considerations for the United States

The paper argues that a low-carbon product standard—a market-based regulation establishing emissions intensity benchmarks with tradable credits—can incentivize the U.S. steel industry to adopt abatement technologies. It recommends regulating finished steel products (sheets, plates, bars, beams, pipes, and tubes) at the point of first sale, covering Scope 1, Scope 2, and significant upstream Scope 3 emissions (coke, lime, and direct-reduced iron). To prevent carbon leakage and maintain competitiveness, the authors suggest applying the standard to all steel products sold or imported into the U.S., including indirect steel products above a certain value threshold. The paper emphasizes that while such a standard is a powerful tool, it must be complemented by R&D funding, government procurement, and other policies to achieve full decarbonization.

• A low-carbon product standard for steel in the U.S. can reduce emissions intensity by establishing benchmarks and tradable credits, providing incentives for both existing abatement options and emerging technologies.
• The authors recommend that the point of regulation be the first sale of finished steel products—specifically sheets, plates, bars, beams, pipes, and tubes—from steel mills to consumers.
• To ensure a technology-neutral approach and comprehensive coverage, the standard should include Scope 1 and Scope 2 emissions, as well as significant Scope 3 emissions from the production of coke, lime, and direct-reduced iron.
• Emissions intensity benchmarks should be set as a percentage of the industry-wide average or the average of top performers, and these benchmarks must be reduced at predetermined intervals.
• To mitigate the risk of carbon leakage and protect domestic competitiveness, the standard should apply to all steel products sold in the U.S., including imports of upstream feedstocks and downstream products containing significant steel value.
• Reporting should occur at the facility level to leverage existing EPA data protocols, with a proposed threshold of 25,000 tons of product or 25,000 tCO2e emissions per year to minimize administrative burden.
• The U.S. steel industry's emissions profile is split between integrated mills, which average 2.5 tCO2e per metric ton of steel, and minimills using 100% scrap, which emit approximately 0.4 tCO2e per metric ton.
• Decarbonization opportunities include the use of green, blue, or emerald hydrogen, carbon capture, use, and storage (CCUS), and electrolytic steelmaking processes.
• A low-carbon product standard alone is insufficient for full decarbonization and must be paired with complementary policies such as R&D funding, government procurement, and carbon pricing.

APA

Feldmann, J., & Kennedy, K. (2021). Toward a Tradable, Low-Carbon Product Standard for Steel: Policy Design Considerations for the United States. World Resources Institute. https://files.wri.org/d8/s3fs-public/toward-tradable-low-carbon-product-standard-steel.pdf#page=7

Chicago

Feldmann, John, and Kevin Kennedy. Toward a Tradable, Low-Carbon Product Standard for Steel: Policy Design Considerations for the United States. World Resources Institute, 2021. https://files.wri.org/d8/s3fs-public/toward-tradable-low-carbon-product-standard-steel.pdf#page=7.

Wikipedia

{{cite report |last1=Feldmann |first1=John |last2=Kennedy |first2=Kevin |title=Toward a Tradable, Low-Carbon Product Standard for Steel: Policy Design Considerations for the United States |publisher=World Resources Institute |date=March 2021 |url=https://files.wri.org/d8/s3fs-public/toward-tradable-low-carbon-product-standard-steel.pdf#page=7 |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{feldmann2021toward, author = {Feldmann, John and Kennedy, Kevin}, title = {{Toward a Tradable, Low-Carbon Product Standard for Steel: Policy Design Considerations for the United States}}, institution = {World Resources Institute}, year = {2021}, month = mar, url = {https://files.wri.org/d8/s3fs-public/toward-tradable-low-carbon-product-standard-steel.pdf#page=7}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }