ResponsibleSteel and LESS advocate for a balanced decarbonization policy

ResponsibleSteel and the Low Emission Steel Standard (LESS aisbl) call for a more pragmatic and inclusive strategy to reduce emissions in the European steel industry. They propose that EU policy makers recognize the limitations of scrap availability and promote decarbonization efforts across all steel production methods.

The organizations have jointly released a new briefing, Steel Decarbonization Scale.

According to the study, the European steel industry is responsible for 6% of total EU emissions. Given the bloc’s ambitious climate goals, how to measure and incentivize steel decarbonization is crucial.

The researchers conclude that current policy discussions, including the European Steel and Metals Action Plan and proposals for voluntary carbon labeling of steel products, risk undermining climate goals if they do not take into account fundamental constraints on scrap availability.

As noted, despite the high global steel recycling rate (85%), only about 32% of global demand for new steel can currently be met by recycled scrap due to the long life of steel products, according to the International Energy Agency (IEA). Although the amount of available scrap will grow, the IEA estimates that it will be sufficient to meet only 46% of steel demand by 2050.

According to Martin Toeuringer, Secretary General of LESS aisbl, decarbonization in the steel industry requires an appropriate basis for comparing products in terms of their impact on the global climate. According to him, scrap is a valuable and limited resource. Any label or standard that ignores this risks distorting markets and ultimately slowing the transition to truly low-carbon steel.

ResponsibleSteel and LESS propose to introduce a decarbonization scale that complements the traditional carbon footprint by explicitly accounting for the ratio of scrap to primary iron used in steel production.

According to Annie Heaton, CEO of ResponsibleSteel, a well-designed classification system in European steel labeling will help real decarbonization progress by taking into account scrap content in addition to measuring the carbon intensity of steel products. Such an approach would stimulate investment.

The two organizations call on the EC to integrate the steel decarbonization scale into the development of voluntary labels, leading markets and investment support mechanisms to ensure that future measures are effective and aligned with Europe’s climate ambitions.

Last April, WV Stahl and the Federal Ministry for the Economic Affairs and Climate Protection presented the Low Emission Steel Standard (LESS). LESS is a voluntary labeling system open to all steel producers.