Steel Industry Leaders Back Action for Net Zero by 2050
Strategic Research Institute
Published on :
22 Sep, 2022, 4:55 am
Leading companies in the steel sector have endorsed a new strategy from the Mission Possible Partnership for action to decarbonize the sector in this decade. Backed by key industry leaders the tally of endorsements reflects growing momentum among high-ambition companies for action in the near-term to make the global goal of net zero 2050 viable. Signatories to the report include ArcelorMittal, Companhia Siderúrgica Nacional, Liberty Steel, SSAB, Rio Tinto, Tata Steel, thyssenkrupp and Vale. The report is an ambitious but achievable strategy, detailing what the global steel industry could look like in a zero-carbon world and what is required to get there in terms of energy, infrastructure, financing, and policy.
The new edition of the Steel Transition Strategy builds on Mission Possible Partnership’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. While net zero steel by 2050 is the goal, the strategy describes action that needs to be taken this decade if the sector is to achieve that objective. Both steelmaking technologies and enabling energy infrastructure will need to be ready in the 2020s to enable the rapid shift to near-zero-carbon production processes in the following decades.
Key insights
1. There is no silver bullet to achieve net zero steel. While various pathways could help to achieve this goal by 2050, the pace of technology development and deployment will make or break the sector‘s 1.5 degree Celsius aligned carbon budget. Rapid progress in the 2020s is crucial to curb cumulative emissions from steel in the next three decades
2. Production capacity for near-zero-carbon primary steel equivalent to about 70 plants should be operational by 2030, building to 530 plants by 2050. The pace of announcements is accelerating. However, even if the current pipeline of ‘low carbon’ primary steel capacity were to achieve ‘near-zero’ emissions by 2030, this would deliver less than a third of the capacity required.
3. Total investment for commercialization and deployment of technologies to achieve net zero steel could cost USD 170-200 billion each year to 2050, of which the larger share is outside the industry. More than two-thirds of this investment is required for supporting infrastructure, primarily for energy supply.
4. The transition to net zero will have significant resource implications, with large increases in required hydrogen, clean electricity, and natural gas inputs but a stark decline in coal.
5. Costs for near-zero-carbon steel will be higher than carbon-intensive alternatives for the foreseeable future, although the cost gap will reduce over time. Bridging the resulting price gap will require buyers of steel in the automotive, energy, and consumer goods sectors initially to buy green steel at a premium.
6. Policy support is essential to drive the transition. Policymakers need to create a level playing field between different regions with different paces of change, which would ideally be achieved through multilateral cooperation.
Endorsing companies
Signatories to the report at September 20, 2022 include
ArcelorMittal
Tata Steel
Thyssenkrupp Steel Europe
SSAB
Liberty Steel
Companhia Siderúrgica Nacional
Danieli
Rio Tinto
Vale
Iberdrola
Linde
Vattenfall
bp
HSBC
ResponsibleSteel
The Mission Possible Partnership is an alliance of climate leaders focused on supercharging efforts to decarbonize some of the world’s highest-emitting industries. By leveraging the convening power, talent and expertise of world-leading organizations on climate action, the MPP aims to trigger a net-zero transformation of seven industrial sectors; Aviation, Shipping, Trucking, Steel, Aluminium, Chemicals and Concrete. MPP is led by four core partners: the Energy Transitions Commission, RMI, We Mean Business Coalition and the World Economic Forum. Our goal is to propel a committed community of CEOs from carbon-intensive industries, together with their financiers, customers, and suppliers, to agree and act on decarbonizing industry and transport in this decade.