Sharp crossroads of the global steel industry

Sharp crossroads of the global steel industry

The global iron and steel industry alone is responsible for 11% of carbon emissions and 7% of greenhouse gas emissions. Under the Paris climate agreement, the industry needs to reach net zero by 2050 to 2070. However, the current operating capacity and projected growth in the sector do not show clear signals that the global steel industry will significantly reduce emissions under current development plans. Global demand for steel is expected to increase by a third by 2050.

Pedal to the Metal research, based on the Global Energy Monitor’s Global Steel Plant Tracker (GSPT), which covers all steel mills in the world with a capacity of at least one million tons (mtpa) per year, reveals that there is no time left for the global steel industry to reduce its carbon emissions. Highlights from the findings of extensive research revealing data on how the iron and steel industry must adapt to meet current and mid-century global climate and energy targets.

Global Steel Plant Tracker (GSPT): Global Steel Plant Tracking

Inefficient Facilities
More than 60% of global steelmaking capacity at GSPT uses blast furnace–basic oxygen furnace (BF-BOF), the most carbon-intensive options in steelmaking. Decarbonizing these traditional vehicles is limited, difficult and costly.

40 more carbon-intensive years
Steel capacity currently under construction is also visible in the GSPT, with over 75% of them using carbon-intensive BF-BOF. This means that carbon emissions will be constant over the life of each plant (40 years or more).

China, Japan and India are leaders in production
Steel mills in China account for 51% (1,023 mtpa) of steel production capacity at GSPT, followed by Japan (117 mtpa) and India (90 mtpa), respectively.

Current global steel production capacity is approximately 25% higher than global steel production. This means that many old and polluting steel mills could be shut down without disrupting global supply. The countries with the highest overcapacity as a percentage of total production in 2020 are the 27 countries of the EU with 26.6% and the UK, Japan (23.7%), the USA (20%) and China with a capacity decrease of 13.5% to 20%. it happened.

$47-70 billion risk of idle assets
If innovative low-emission technologies reach commercial scale at the predicted speed, the steel industry now risks $47-70 billion of idle assets for carbon-intensive steel mills under development.

The potential of carbon commitments
More than three-quarters of global steel capacity is now sourced from countries with net zero commitments and companies with low emissions commitments.

Up to 20 years green steelmaking technologies expected to reach scale
If the pilot projects are successful, new low-emission steelmaking technologies are expected to reach commercial scale within two decades. In addition, most steel mills will face reinvestment cycles, which will result in difficult decisions to be made about retrofitting coal-based furnaces or replacing them with lower-emission technology. These decisions need to be made carefully based on how innovative technologies are advancing to avoid causing emissions that exceed international climate targets.

Source: by Dmitrii Bardadim from Pixabay

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