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Despite a slowdown in emission growth in Q2 2021, China's power and steel sectors continued to announce significant new coal-based capacity in the first half of the year. The report highlights a contradiction between economic growth driven by construction and decarbonization goals, noting that zero-emission power only met 30% of electricity demand growth between H1 2019 and H1 2021. While government measures to control fiscal overspending and industrial output led to a slowdown in CO2 emission growth in the second quarter, the continued announcement of coal-based projects risks creating stranded assets and hindering the transition to low-carbon technologies.

The document analyzes the decline of the UK steel industry over 50 years, noting a workforce reduction from 320,000 in the early 1970s to 5-10% of that figure today. It identifies negative outcomes including job losses, environmental contamination, and barriers to reemployment such as wage differentials. The brief argues that local support organizations are insufficient and calls for wider regional economic development policies focused on diversification, supply-chain support, urban regeneration, and workforce upskilling.

The document analyzes the socio-economic and environmental consequences of the UK steel industry's decline since the 1970s, highlighting the failure of generic regional development policies that attempted to replicate old manufacturing models rather than transitioning to knowledge-based economies.

The document analyzes how free emission allowances under the EU ETS led to up to 50 billion euros in windfall profits for energy-intensive industries between 2008 and 2019. It challenges the 'carbon leakage' justification for these allowances, noting a lack of evidence for industrial relocation. The author recommends transitioning to full auctioning of permits and utilizing the resulting revenues for climate innovation and a just transition.

The global steel sector, responsible for 11% of CO2 emissions, remains heavily reliant on carbon-intensive blast furnace-basic oxygen furnace (BF-BOF) pathways. While over 75% of global capacity is now covered by net-zero pledges, the report warns of significant stranded asset risks—estimated between 47 and 70 billion USD—due to the continued construction of BF-BOF plants. The analysis emphasizes a transition toward electric arc furnaces (EAF), green hydrogen-based direct reduced iron (DRI), and carbon capture, utilization, and storage (CCUS), while leveraging existing global overcapacity to retire inefficient plants.

The document argues that the United States can lead global industrial decarbonization by leveraging its financial and technical resources through collaborative efforts between the public and private sectors, specifically focusing on the cement, iron and steel, aluminum, and chemicals industries.

The Climate Action Tracker reports that recent Paris Agreement pledges and targets have reduced the estimated end-of-century warming to 2.4°C, down by 0.2°C. While the 2030 emissions gap for a 1.5°C pathway has narrowed by 11-14%, current policies still project a warming of 2.9°C. The most optimistic scenario, assuming full implementation of net zero targets, suggests warming could be as low as 2.0°C, though this remains above the Paris Agreement limit. The report emphasizes that stronger near-term 2030 targets are more critical for reducing warming than the addition of new net zero targets.

The authors contend that while corporate pledges to reduce emissions are increasing, the decarbonization of heavy industry—which accounts for approximately 18% of global carbon emissions—requires significant government funding and regulatory support. They highlight the 'Global Framework Principles for Decarbonizing Heavy Industry' as a tool to coordinate these efforts and criticize the gap between the climate rhetoric and actual policy actions of leaders in the US, China, Japan, and India.

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.

The Climate Action Tracker has established 'highest plausible ambition' benchmarks for four key sectors—Power, Transport, Industry, and Buildings—to guide the global transition to net-zero emissions by 2050. The report provides specific targets for 2030 and 2050, both globally and for seven major economies (Brazil, China, EU, India, Indonesia, South Africa, and the US), emphasizing that while starting points differ, all sectors must decarbonise by mid-century to meet the 1.5°C goal. Key priorities include the immediate phase-out of coal in developed nations by 2030, a rapid shift to zero-emission vehicles, and significant emissions intensity reductions in cement and steel production.

The paper argues that large-scale demonstration plants for hydrogen steelmaking are preferable to smaller pilot plants because they better facilitate collaboration with authorities, improve signaling and marketing, and more effectively test business models. However, the authors warn that large plants face significant regulatory and permitting bottlenecks, particularly regarding power transmission capacity in Sweden. The analysis is contextualised by the HYBRIT consortium's decision to pursue an industrial-scale plant with a capacity exceeding one million metric tons of iron per year in Norrbotten, Sweden.

The report argues that current green finance in China focuses too narrowly on individual assets and lacks robust monitoring, reporting, and verification (MRV) to prove additionality. It proposes a 'deep green' finance framework designed to overcome structural barriers to sustainability, such as the economic dependency of Shanxi on coal and the systemic transmission and tariff constraints affecting Sichuan's hydroelectric resources. The author suggests four tests for deep green finance and six recommendations for policymakers to align finance, policy, and market design to accelerate a systemic low-carbon transition.

The Agenda 2030 Compass is a proof-of-concept tool developed by the Stockholm Environment Institute, Jernkontoret, and Swedish steel producers to evaluate how strategic decisions impact the 17 SDGs. Unlike traditional SDG measurement, the Compass uses a future-oriented, cross-impact methodology to assess direct and indirect effects of new products or policies. Piloted through workshops with approximately 100 participants, the tool was used to compare options such as the use of metallurgic slags and the development of 'green' heavy-duty vehicles. The findings suggest the Swedish steel industry can significantly contribute to the 2030 Agenda and that the methodology is applicable across various industrial and government sectors.

Carbon Market Watch urges the European Commission to expand the New Circular Economy Action Plan beyond textiles, construction, and electronics to include heavy industries like steel, chemicals, and cement. The organization highlights that resource-intensive industries are the EU's third-largest polluters and could reduce emissions by 56% by 2050 through circular models. Specific recommendations include mandatory recycled content for products and the implementation of CO2 performance standards at the material and product level.

The document criticizes the veto by Poland, the Czech Republic, Estonia, and Hungary against the EU's long-term climate strategy, arguing that such political obstruction harms businesses by removing investment certainty. It highlights that energy-intensive industries—specifically steel, cement, and chemicals—account for approximately 40% of greenhouse gas emissions under the EU emissions trading system and have seen no decrease in pollution since 2012. The author asserts that a formal commitment to net-zero emissions by 2050 is essential to signal a clear decarbonisation path, enable the development of financial frameworks, and inform the EU 2030 industrial strategy.

The report analyzes the HYBRIT process, which replaces coal with hydrogen for the direct reduction of iron ore combined with an electric arc furnace to create fossil-free steel. While technically feasible and potentially cost-competitive depending on electricity and carbon prices, the transition faces systemic barriers including high investment risks, the need for large-scale electrolysis infrastructure, and the risk of carbon leakage in a globally competitive market.

The report identifies that while decarbonisation opportunities exist, they are hindered by a low EU ETS carbon price, restrictive product benchmarks, and a lack of shared infrastructure. Stakeholders argue that the current ETS design encourages incremental improvements over breakthrough technologies and often penalises early adopters or those using low-carbon substitutes. Proposed solutions include updating benchmarks with recent data, expanding green public procurement, and integrating carbon pricing with trade policy to ensure global competitiveness.

The briefing advocates for shifting or supplementing production-based carbon pricing with consumption-based models to eliminate the need for free allowances and exemptions that mute price signals. It highlights that pricing at the point of final consumption can prevent carbon leakage in basic materials like steel and cement, incorporate emissions from imports, and provide sub-national governments with jurisdictional autonomy. The text proposes an evolutionary implementation path, starting with undifferentiated sector benchmarks and moving toward full life-cycle carbon accounting.

The European manufacturing sector has seen minimal emission reductions, with industrial emissions in the EU falling by only 0.2% in 2016 and 1% since 2012. The author contends that the EU Emissions Trading System (EU ETS) fails to incentivise low-carbon transformation because it allows industries to profit from the system rather than pricing pollution effectively. This environment protects incumbents and hinders innovators, such as low-carbon cement producer Ecocem, whose solutions can reduce the carbon footprint of concrete by over 50%. To achieve the Paris Agreement goals, the document calls for a Low-Carbon Industrial Strategy to scale demand for low-carbon products and remove market barriers. It suggests specific technological shifts: using recycled scrap in electric arc furnaces for steel, substituting clinker in cement, and replacing fossil fuel-based feedstock with biomass in the chemical sector. The author highlights a regulatory imbalance where pollution payouts via free permits are over 15 times the amount allocated for innovation under the EU ETS reform after 2020, and suggests alternatives like a carbon border tax.

The policy brief critiques the proposed EU ETS revision, arguing that over-generous free allowances to industrial sectors—particularly the steel industry—create windfall profits and deprive the public of potential auctioning revenues. It recommends increasing the Linear Reduction Factor to 4.2% to align with Paris Agreement goals, establishing a Just Transition Fund for workers, and shifting toward full auctioning to fund low-carbon innovation and support citizens.