Whether it is future energy and transport systems, protection from the impacts of natural disasters, climate-resilient infrastructure, construction and housing, low-carbon manufacturing and agriculture, steel is at the heart of delivering solutions.

Increasingly, circular economic approaches are prolonging steel’s useful life. The steel industry is an integral part of the circular economy – with our material ideally suited to be remanufactured, reused and ultimately recycled.

Transforming steel production

Iron is made by removing oxygen and other impurities from iron ore. When iron is combined with carbon, recycled steel and small amounts of other elements it becomes steel. Once made, it is a permanent resource; it is 100% and infinitely recyclable without any loss of properties.

Steelmaking is a truly global industry, and raw materials (such as iron ore and scrap) and steel products are traded globally to a large extent. Today, over 70% of global steel production takes place in Asia.

The production of steel remains a CO2 and energy-intensive activity. However, the steel industry is committed to continuing to reduce the footprint from its operations and the use of its products.

Our industry fully supports the aims of the Paris Agreement.

There is no single solution to drastically reducing CO2 emissions from our industry, however, the main elements enabling industrial and societal transformation are:

Reducing our own impact

We take responsibility for our impact by reducing our emissions from the production of iron and steel. We strive for efficiency in our processes and maximised use of scrap. We continue our efforts to develop and deploy breakthrough low-carbon steel making technologies.

Efficiency and the circular economy

We drive more reuse, remanufacturing and recycling, all key elements of the circular economy.

Modern steels are stronger, lighter and more durable than ever before. The steel industry works intensively with its customers, from design to end-of-life, to share our material knowledge to ensure that steel is used as efficiently as possible in any given application. In this way we enable the circular economy and contribute to material efficiency at every stage.

Developing advanced steel products to enable societal transformations

We are developing and manufacturing the advanced steel products necessary to facilitate the required transformation and adaptation of society to reach carbon neutrality through zero energy buildings, renewable energy infrastructures, electrification and more.

We assist our customers in delivering innovative solutions through the use of our material and the introduction of new advanced steel products.

While each of these will play a strong role, this paper focuses on the first element – mitigating our own emissions from the production of iron and steel.
The Paris Agreement

The Paris Agreement was adopted in 2015. The agreement’s central aim is to limit global temperature rise to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. The agreement aims to reach a balance between anthropogenic emissions and removals by sinks in the second half of the century.

Key points from this policy paper

The important elements to enable industrial and societal transformation are: reducing our impact, creating advanced products, and focusing on the circular economy.

There are three components to reducing our impact: step up, maximising scrap use, and developing breakthrough technologies

The steel industry will mitigate its CO2 emissions

The steel industry will create partnerships to enable transformation

The steel industry will be open and transparent

Being responsible - Reducing our own impact

The IEA Iron and Steel Technology Roadmap

In October 2020, the International Energy Agency (IEA) released its Iron and Steel Technology Roadmap3. This document analyses the impacts and trade-offs of different technology choices and policy targets for the industry to be in line with the goals of the Paris Agreement.

Under the IEA’s Sustainable Development Scenario, total direct emissions from the iron and steel sector fall by more than 50% by 2050 relative to 2019. On the same pathway, the emissions intensity of crude steel production must fall by 58%.

The IEA states that steel is vital to modern economies and notes that sustaining the projected demand growth in steel while reducing emissions poses immense challenges. While efficiency improvements will help the industry, there is a need to develop further and deploy a broad portfolio of breakthrough technology options and  enabling infrastructure to achieve long term, deep reduction in emissions.

Furthermore, the IEA notes the critical role governments must play in ensuring a sustainable transition of the sector, and concludes with a call to action for governments, the steel industry, the research and NGO communities and other stakeholders.

Reducing our impact: three components

Steel production, total CO2 emissions and CO2 intensity, 2019 – 2050 under the International Energy Agency (IEA) Sustainable Development Scenario (SDS)

2. Maximise scrap use

Every steel plant is also a recycling plant, and all steel production uses scrap, up to 100% in the electric arc furnace (EAF) and up to 30% in the blast furnace (BF) route. All scrap that is collected is recycled, and the overall recycling rate today is estimated to be about 85%. This high level of recycling means that there is limited room for improvement.

Scrap plays a key role in reducing industry emissions and resource consumption. Every tonne of scrap used for steel production avoids the emission of 1.5 tonnes of carbon dioxide, and the consumption of 1.4 tonnes of iron ore, 740 kg of coal and 120 kg of limestone6.

The future expansion of scrap-based steel production will depend on the availability of high-grade scrap. While iron ore supply can flex with demand, global scrap availability is a function of steel demand and the arising of scrap when steel-containing products reach the end of their life. Global steelmaking capacity experienced a phase of explosive growth from the early 2000s largely fuelled by investment in new capacity in China. With steel products having an average lifespan of 40 years7, this steel will begin to enter the scrap market in the next decade, enabling a significant reduction of steel industry emissions.

3. Breakthrough technology

Currently, the only technically and commercially feasible way to produce steel from iron ore8 is through the use of fossil fuels as reducing agents.

The blast furnace is the dominant technology used to reduce iron ore today. The modern blast furnace is continually being developed and refined and currently operates close to the efficiency limit of the reduction process.

Therefore, to achieve the drastic reductions needed, an entirely new, transformative approach to ironmaking is required and there are several promising initiatives under development. These fall into three broad categories:

  1. Using carbon as a reductant while preventing the emission of fossil CO2, for example using carbon capture, utilisation and storage (CCUS) and/or sustainable biomass.
  1. Substituting hydrogen9 for carbon as a reductant, generating H2O (water) rather than CO2.
  1. Using electrical energy through an electrolysis-based process.

This reliance on fossil fuels defines the steel industry’s past as a major emitter of greenhouse gases, but we are committed to a low-carbon future.

A portfolio of technology options

Climate Action

Carbon capture and storage (CCS)

At Emirates Steel in the UAE up to 800 kt of CO2 per year is captured from the CO2 rich gas stream from the ironmaking plant. The gas is compressed, dehydrated and pumped through 50 km of pipeline before being injected into a mature oil field for permanent storage.

Carbon capture, use and storage (CCUS)

ArcelorMittal is constructing a large-scale facility in Ghent, Belgium to convert process gases to ethanol, which can be used in a wide range of applications, including the production of synthetic fuels. The plant will have a capacity of 80 million litres of ethanol per year. A similar commercial facility began operation in 2018 at Shougang Group in China, producing 30 million litres of ethanol for sale in the first year of operation.


HBIS is building a 1.2 Mt capacity hydrogen metallurgy DRI demonstration project. The project in China will use green and blue hydrogen technologies to explore a path to zero CO2 emissions from the iron and steelmaking processes.

Renewable energy

Rocky Mountain Steel in Colorado, USA, is transitioning from coal to solar power. The plant will be the largest on-site solar plant in the country dedicated to a single customer when it comes online.

More examples are available here: https://worldsteel.org/climate-action/climate-member-initiatives


The IEA roadmap projects that the broad deployment of breakthrough technology will accelerate between 2030 and 2050. However, we can expect to see first movers trial and implement first of a kind plants providing increased quantities of low-carbon steel to the market from the mid-2020s. Learnings from these innovations will support broader deployment across the wider industry by mid-century.

Cost implications

Partnerships between governments and the steel industry are fundamental to a sustainable future

The tools available to governments, the steel industry profile, and anticipated access to affordable and low-carbon technologies differ by region and by country. As with the Paris Agreement, we believe that individual countries are best placed to assess and implement policy and technical strategies to suit their particular circumstances.

Nevertheless, it is absolutely clear that governments, the steel industry and other stakeholders will all need to collaborate closely to overcome the technological and economic challenges and create the market conditions necessary for the steel industry to transition to low-carbon steelmaking effectively.

In practice this means that: