The European steel industry has less than 26% of its carbon budget remaining

The European steel industry is expected to surpass the emissions budget 15 years ahead of time. 

In a new report published by Industry Tracker, the authors have provided an in-depth assessment of the 10 largest steel companies that account for 68% of primary steel production in Europe. 

They found that the industry has less than 26% of its carbon budget remaining. This means the industry’s existing assets could release 2.3 billion tonnes of CO2 in their lifetime. 

Having been on an upward trajectory since the mid 20th century, emissions from steel now account for up to 9% of all global emissions – more than the whole of India. 

The biggest contributor to emissions from the steelmaking process comes from the blast furnace.

Industry Tracker’s analysis finds that these companies will need to stop renewing blast furnaces before 2030 and have between now and 2033 to begin investing in new technologies. The estimated cost of making this shift ranges between US$4 and 34 billion.

8 of the 10 companies analysed in the study do have emission reduction targets. However, most of the emissions cuts outlined in these targets come after 2030, when they are at high risk of missing the window for investing in the new technologies. 

70% of the companies in the report are involved in projects developing ‘blue’ or ‘green’ hydrogen. Although this is encouraging, the authors warn that these technologies are still at the early stage and must be rapidly scaled and commercialised to meet global climate targets. 

Carole Ferguson, managing director of Industry Tracker, said: ‘Steel is used across many products and sectors that are integral to the way we live. However, with a large carbon footprint and a growing emissions profile, steel remains a problem child in the path to net-zero. With momentum starting to build for new technologies, particularly green hydrogen, steel companies have the opportunity to break out of their current capital intensive business models.

‘I am optimistic that with public support, cross-sector partnerships and investment capital seeking to solve the climate crisis, steel companies have the potential to lead the way in the transition and drive the green hydrogen economy.’

Photo by Karan Bhatia