Carbon neutrality has a far-reaching impact on the global steel industry, which can be reflected in five major areas: controlling overall production scale, adjusting the energy mix, increasing capital investment, reshaping global steel trade, and raising steel product prices.
In October 2020, the International Energy Agency (IEA) released its World Energy Technology Outlook 2020 – Steel Technology Roadmap. Under the baseline scenario (STEPS), global steel demand is expected to increase by 40%, from 1.85 billion tons in 2019 to approximately 2.55 billion tons by 2050, in line with current national policies.
To achieve the Paris Agreement’s 2.0°C climate target, global direct carbon emissions from the steel industry must be reduced by 55% by 2050, compared to 2019 levels.
Meeting this target will require massive investment. According to the IEA roadmap, transitioning to electric arc furnaces, increasing scrap usage, and transforming the energy structure will significantly increase capital expenditures and raise production costs.
International trade in steel will also face increased challenges. In addition to traditional trade barriers, new “green” trade measures may emerge, potentially fragmenting global markets and pushing countries toward more regionalized or self-contained trade systems.
Downstream green procurement demands are intensifying. As more industries transition to low-carbon operations, steel buyers—especially in sectors like energy, automotive, and construction—are requiring “green steel” to reduce carbon footprints across the full value chain. This places new pressure on steel producers to minimize greenhouse gas emissions throughout the product lifecycle, including production, usage, and end-of-life stages.
To align with Paris Agreement targets, major steel-producing countries and industry bodies have released decarbonization plans:
- European steel industry: aims to cut carbon emissions by 30% by 2030 (compared to 2018), and by 80–95% by 2050 (compared to 1990).
- Japan Iron and Steel Federation: targets a 30% reduction in carbon emissions from ironmaking by 2050, and aims to achieve “zero-carbon steel” production by 2100.
- South Korean steel industry: plans to reduce carbon emissions from 135.7 million tons to 127.1 million tons by 2030.
