New York/Ulm. The steel industry accounts for around 10% of global greenhouse gas emissions. Prof. F. J. Radermacher and Dr. T. Orthen from FAW/n Ulm have authored a new paper for UN Secretary-General António Guterres, outlining key approaches to making the steel industry more climate-friendly. There is enormous potential in China and India, since two-thirds of global steel plants will need major reinvestment or refurbishment by 2030. The paper was published together with colleagues from the Council of Engineers for the Energy Transition (CEET). Radermacher and Orthen have been involved in the Council’s work from the very beginning as the only German representatives. CEET is an independent global advisory body to the UN Secretary-General’s Office on matters concerning the global energy transition.
Shortly before the summer recess, the Council of Engineers for the Energy Transition (CEET) published a policy brief on the climate-friendly transformation of the steel sector. Under the title “Global Strategies for Low-Carbon Iron and Steel Production”, Prof. Dr. Dr. Dr. h.c. Franz Josef Radermacher (FAW/n Ulm), Dr. Tobias Orthen (FAW/n Ulm), and Naveen Ahlawat (Jindal Steel) provide an overview of the most promising technological approaches to reducing greenhouse gas emissions, as well as the strategic priorities needed for effective implementation. At the outset, the authors emphasize that transforming the steel industry solely through green hydrogen is unrealistic. Under current global conditions, such an approach is neither economically viable nor practically feasible – especially since roughly half of all steel plants are located in China.
The full paper (in English) can be downloaded from the United Nations Sustainable Development Solutions Network (SDSN / UNSDSN) platform.
Key messages:
- Steel and CO₂ Emissions
Steel production remains heavily dependent on fossil fuels, meaning that decarbonization requires more than simply switching to renewable energy sources. Low-carbon technologies are needed along the entire value chain, as steel production currently accounts for about 8% of global greenhouse gas emissions. This poses a significant challenge for both the energy transition and economic growth in developing and emerging economies.
- Existing Technologies and Strategies
Key levers include replacing coal with natural gas combined with CCUS (Carbon Capture, Utilization, and Storage), using biomass with CCUS, and deploying hydrogen-based direct reduction technologies. Further progress can be achieved through efficiency improvements, higher recycling rates, modern control systems, and waste heat utilization. Moreover, more efficient use of raw materials through improved processing and transport methods is essential.
- Modernization Potential and Investment Cycles
By 2030, most steel plants will reach a stage in their investment cycles where modernization is due – a crucial opportunity to integrate low-CO₂ technologies. Coordinated international action could prevent around 30 billion tons of CO₂ emissions from steel production by 2060. Global cooperation is therefore a key to success.
- Focus on China and India
China and India are pivotal to global decarbonization efforts: China is the largest steel producer, and India is expected to triple its production capacity by 2050. China could take a leading role by converting blast furnaces to electric arc furnaces (EAFs). However, many smaller plants in both countries may face investment barriers to adopting new technologies. Different starting points between industrialized and emerging economies require tailored strategies – for example, converting older Japanese facilities to scrap-based EAFs.
- Is There a Universal Solution?
Neither hydrogen nor CO₂ capture alone can fully decarbonize the steel industry. Hydrogen could reduce emissions per ton by up to 90%, but both technologies demand massive infrastructure investments. The key question, therefore, is how “low-carbon steel” is defined and traded, ensuring that all cost-effective emission reductions are utilized – rather than focusing exclusively on a single technology.
