The global iron and steel industry is emission intensive, responsible for more than 3.1 gigatonnes of carbon dioxide (Gt CO2) emissions in 2020, about 7 per cent of the total global greenhouse gas (GHG) emissions. Steel is integral to the energy transition, serving as a critical material for technologies such as wind turbines, electric vehicles, and advanced manufacturing processes. Industry transformation is therefore essential for a 1.5°C-aligned iron and steel sector. It is critical that investments are brought forward in low-emissions steelmaking over the next decade, when the majority of capacity is expected to undergo through major investment.
This report, launched by Mission Possible Partnership (MPP), offers ten critical insights the industry can take on the path to a net-zero steel sector. The strategy in the report describes actions that need to be taken in this decade if the sector is to achieve the objective of net zero steel by 2050. The report findings highlight that it is both technically and economically possible to bring the iron and steel sector on a path to net-zero emissions by 2050, provided that multiple available and emerging technologies are deployed. Production capacity for near-zero-carbon primary steel equivalent to about 70 plants is required to become operational by 2030, building to 530 plants by 2050. The current pace is not sufficient, as the report finds that even if the current pipeline of ‘low carbon’ primary steel capacity was to achieve ‘near-zero’ emissions by 2030, it would deliver less than a third of the capacity required to decarbonise. Total investment for commercialisation and deployment of technologies to accelerate and achieve net zero steel is estimated to cost USD170 billion – USD200 billion each year to 2050. More than two-thirds of this investment is outside the industry, which is required for supporting infrastructure, primarily for energy supply.
The report is one of the series of reports MPP’s Sector Transition Strategies has commissioned for seven hard-to-abate sectors. The report demonstrates industry-backed, 1.5°C compliant pathways to net zero, lays out foundation for tangible, quantitative recommendations in order to achieve critical milestones for the respective sectors in terms of its required final energy demand, upstream feedstock resources, and capital investments for 2030. The new edition of the Steel Transition Strategy builds on MPP’s earlier ground-breaking steel report, released in 2021, which mapped critical steps for decarbonisation decade by decade – including emissions data and real-economy milestones – for the sector to achieve net zero emissions by 2050. The market penetration of viable decarbonisation measures each sector can draw on is modelled in line with industry specific replacement cycles of existing assets (steel plants or aircraft) and the projected increase in demand.