Decarbonization of the global steel industry is at risk due to the blast furnace production expansion – GEM

The green transition of the global steel industry is under threat due to the high costs of coal-based production and insufficient investment in environmentally friendly methods. This is reported by Bloomberg, citing a study by Global Energy Monitor (GEM).

According to the GEM report, approximately 319 million tons of annual capacity for coal-fired blast furnaces is currently under development (a 5% increase from last year). Together with 80 million tons of existing capacity undergoing major repairs, the total volume significantly exceeds the 141 million tons scheduled for decommissioning. Global blast furnace capacity is expected to grow by another 88 million tons by 2035.

The steel industry generates 11% of global carbon emissions, with China and India leading the way in this regard. More environmentally friendly, albeit more expensive, technologies such as electric arc furnaces (EAF) and direct reduced iron (DRI) production are not keeping pace with the expansion of coal-based production.

According to GEM, the share of EAFs in global capacity grew by only 1 percentage point last year—to 34%. In China, the world’s largest steel producer, this sector accounts for 17% of national emissions; however, the slow pace of transformation is hampering global efforts to reduce emissions.

The prospects for the steel industry’s transition away from fossil fuels remain bleak: without active efforts by India and China, the problem cannot be solved. At the same time, these two countries alone plan to build 86% of all new coal-fired capacity.

As a reminder, Germany will allocate €5 billion ($5.8 billion) in financial aid to energy-intensive industries to implement low-carbon technologies. For the first time, the funding program will include support for carbon capture and storage (CCS) technologies.

As reported by GMK Center, ArcelorMittal has revised its long-term decarbonization strategy, acknowledging that the energy transition has proven to be significantly more complex than previously anticipated. Against this backdrop, the group has updated its interim targets. Based on investment decisions already made, the company expects to reduce the carbon intensity of its production by 10% by 2030 compared to 2018 levels (Scope 1 and Scope 2). This is a more conservative approach than in previous plans and is based solely on projects that have already secured final financing.