Evaluating progress toward 2030 iron and steel decarbonization goals

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Pedal to the Metal is an annual survey of the current and developing global iron and steel plant fleet. The report examines the status of the iron and steel sector compared to global decarbonization roadmaps and corporate and country level net zero pledges. 

This year’s analysis draws from GEM’s Global Iron and Steel Tracker (GIST) — formerly the Global Steel Plant Tracker and Global Blast Furnace Tracker — and the Global Iron Ore Mines Tracker (GIOMT). Together, these tools provide detailed, asset-level data on over 1,200 plants and nearly 900 iron ore mines worldwide.

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Cleaner technologies are rising, but coal still dominates

Electric arc furnace (EAF) capacity has grown nearly 11% since 2020, with another 24% increase projected by 2030. Half of all steelmaking capacity under development plans to use EAF technology, much of it integrated with direct reduced iron (DRI) — a process that uses gas, rather than coal, to produce iron before it’s melted into steel in an EAF.

DRI also represents a growing share of new ironmaking capacity, rising to 42% of developments, compared to just 10% of current operating capacity.

If current developments and retirements proceed, the global fleet could reach 36% EAF steelmaking by 2030, just shy of the IEA’s 37% target — a key benchmark for greening one of the world’s most polluting industries. Whether that milestone is met will depend largely on India’s direction.

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India’s choices will shape the future of steel

India’s choices will be decisive in determining whether the global steel sector reaches 37% electric arc furnace (EAF) production by 2030 as the country now dominates global steel development plans.

India has overtaken China as the top developer of new steel capacity and now accounts for 57% of all coal-based BOF capacity under development. Its total steel development pipeline stands at 352 mtpa, more than a third of the global total — yet only 8% of these projects have entered construction. By contrast, China has already begun construction on 46% of its development pipeline.

Much of India’s steel buildout remains concentrated in coal-based technologies. The country also has significant coal-based rotary kiln DRI capacity — much of it at smaller plants not tracked in GEM’s dataset — further compounding its emissions profile. Despite growing international and domestic awareness of the need for clean steel, India has yet to translate that urgency into concrete action.

This gap between ambition and execution presents a turning point. India’s buildout of new coal-based capacity risks locking in decades of emissions — but with much of this capacity still in early planning stages, there’s an opportunity to pivot toward lower-emissions pathways.

India is now the bellwether of global steel decarbonisation. If the country does not increase its plans for green steel production, the entire sector will miss an important milestone. So goes India, so goes the world.

Astrid Grigsby-Schulte, Project Manager of the Global Iron and Steel Tracker at Global Energy Monitor

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Cleaner steel plans advance, but construction lags behind

While India’s trajectory looms large, the broader picture shows that global plans for cleaner steelmaking are growing — even if implementation is still lagging.

Many upcoming projects include integrated direct reduced iron (DRI) and electric arc furnace (EAF) production. DRI now accounts for 42% of ironmaking developments — a notable rise from earlier in the decade. Even so, DRI development has fallen behind global decarbonization goals.

While EAF-based capacity now makes up 50% of all projects in development, less than a third of that is under construction. Meanwhile, 46% of steel projects that have broken ground are still BOF-based, showing that emissions-heavy infrastructure is still advancing.

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Australia and Brazil have a green ironmaking opportunity

While much of the global spotlight is on India, other countries also hold outsized influence in shaping the trajectory of clean steel — particularly upstream in the supply chain.

GEM’s Global Iron Ore Mines Tracker (GIOMT), launched in 2024, maps nearly 900 iron ore mines and underscores how Australia and Brazil are uniquely positioned to shape the future of green ironmaking due to their large iron ore reserves and renewable energy potential. Both countries have large reserves of high-grade iron ore and significant renewable energy potential — key ingredients for green DRI-EAF steelmaking.

But neither country has yet emerged as a leader in green ironmaking. Despite their production advantages, both lag in deploying cleaner technologies like DRI — leaving untapped potential to drive a global shift.

With falling demand from China and growing international momentum for cleaner steel, these countries face both a challenge and an opportunity: align mining and industrial development with the decarbonization of steel, or risk losing competitive ground.

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The pipeline for cleaner steel has never been stronger, with record-high levels of EAF and DRI capacity in development. But unless those projects are built, and built with low-carbon inputs, the industry risks missing its moment.

Cleaner technology is no longer theoretical — it’s available. The coming years will determine whether the steel sector seizes that momentum, or lets it slip.

The post Pedal to the Metal 2025 appeared first on Global Energy Monitor.

• While there has been some progress in the steel industry’s commitment to emissions reduction targets, 23 of the top 50 producers still lack concrete intermediate milestones, making it challenging to achieve the goal of net zero by 2050.
• Twenty companies now target net zero by 2050 or earlier, up from seventeen in 2023. Despite this modest increase in net zero commitments among steel producers, half of the top producers remain without a 2050 target, highlighting the need for continued focus on aligning the sector with global decarbonization efforts.
• Fifteen of the top 50 steel producers, only one more since last year, have defined emission scopes in their net zero targets. The remaining majority still lack clear scope definitions, pointing out the need for greater transparency to ensure accurate tracking and progress toward industry-wide decarbonization.
• The launch of the Science Based Target Initiative’s (SBTi) steel sector guidance in 2023 makes it easier than ever before for companies to set transparent and ambitious climate goals, with early adopters like SSAB and Thyssenkrupp leading the way. Outside enforcement mechanisms (i.e. governments and financial institutions) will be key for holding companies accountable to their net zero targets.

In 2023, Global Energy Monitor (GEM) and the Leadership Group for Industry Transition (LeadIT) published the briefing A Matter of Ambition: Examining the Steel Industry’s Commitment to Net Zero by 2050 to inspect the state of net zero commitments by top steel producing companies. This briefing provides an update on the progress in net zero 2050 commitments by the top 50 steel producers.

These top 50 steel producers rely more heavily on higher emissions steelmaking technologies than the global industry average and are responsible for more than 60% of the sector’s emissions, but half of these companies still lack any net zero target, and only twenty have aimed for net zero by 2050. During 2023 the top 50 steel companies produced 1.1 billion tonnes of steel, about 60% of global production (1.9 billion tonnes).

The entire iron and steel industry is responsible for about 2.6 gigatonnes (Gt) of direct CO2 emissions, and 3.6 Gt of direct and indirect CO2 emissions¹ annually, equivalent to powering about 470 million homes for a year.

Net zero commitments by top steel producers

Compared to last year’s update, there has been an increase in the number of top steel producers pledging to reach net zero emissions. However, not all of these companies aim to achieve net zero by 2050, and half of the top producers still have yet to release a plan with milestones for reaching this target.

The analysis of the top 50 steel producers follows the latest production ranking provided by the World Steel Association. While this ranking remains similar year-to-year, two companies included in the 2023 analysis have shifted out of the top 50 list, while two other companies have entered the top 50 in the most recent production ranking update. One of the two companies that fell out of the top 50 ranking had 2030 and 2050 climate goals, and the other had a 2050 climate goal. Of the two new companies included this year, one has a 2045 goal, and the other has no known goals. The changes in progress due to this small shift in rankings rather than changes in company policies are noted throughout. 

Figure 1 illustrates the evolving trends in emissions reduction milestones among the top 50 steel producers leading up to 2030. According to the Green Steel Tracker dataset as of September 2024, seventeen companies have set a 2030 emissions reduction goal, three fewer top 50 producers than in the 2023 update. Two of these companies removed their 2030 goals, while one reduction is due to the shift in rankings of the top 50 steel producers. Conversely, ten companies have now established milestones between 2030 and 2040, covering a production capacity of 286 million tonnes per year (Mtpa), an increase of five companies compared to 2023.

A significant portion of the industry (twenty-three companies, which is two fewer than last year) still have either not stated an emissions reduction milestone for 2030 or beyond (fourteen companies producing 275 Mtpa), or have not disclosed any information on their emissions reduction goals (nine companies producing 133 Mtpa). This marks a slight shift from the 2023 report, with more companies having a stated emissions reduction target of 2050, though most of these new targets lack any intermediate milestones.

As of September 2024, three companies (producing 45 Mtpa) plan to reach net zero before 2050, up from just one company last year. Seventeen companies (producing 520 Mtpa) have committed to meeting net zero by 2050, an increase of one company compared to last year, though this shift is due to the change in top 50 producer rankings, not a new or accelerated commitment by a company (Figure 2).

The number of companies planning to achieve net zero after 2050 has also risen, from two in 2023 to five in 2024. These five companies (producing 138 Mtpa) target net zero by 2060 or later, potentially delaying the emissions reductions needed for heavy industry to align with the International Energy Agency (IEA) Net Zero Emissions by 2050 (NZE) Scenario.

Despite the increase in set targets, half of the top 50 steel producers still lack a net zero target. Sixteen companies (producing 272 Mtpa) have not stated a net zero target in their public reporting, and nine companies (producing 133 Mtpa) have provided no information on climate targets at all.

Figure 1

Figure 2

Emission scopes: How ambitious are these targets?

Fifteen of the top 50 steel producers have established targets with defined emission scopes, which is one more than in 2023.

According to LeadIT’s Green Steel Tracker dataset, only fifteen of the top 50 steel producers have specified the emission scopes they plan to address in order to reach their net zero targets (Figure 3). Of these, four companies have included Scopes 1, 2, and 3 in their plans. Three of these companies aim to achieve net zero by 2050, while one plans to reach this goal before 2050.

The remaining thirty-five companies have either not specified the emission scopes they intend to reduce (fourteen companies) or have not publicly disclosed any information about their climate targets (21 companies). Among these 35 companies, thirteen have set a net zero goal: two before 2050, six by 2050, and five after 2050. However, the lack of transparency regarding the emission scopes these companies plan to address may hinder both the achievement of their 2050 targets and the monitoring and verification of their emissions reduction progress.

Figure 3

Tools for target-setting: SBTi’s new guidance for the iron and steel sector

In September 2023, the Science Based Targets Initiative (SBTi) launched the first sector-specific methodology for setting Paris-aligned near- and long-term targets at the company level in the iron and steel sector. SBTi has been globally recognized as a key enabler and validator of corporate climate action through its development of guidelines and tools to help companies limit global temperature rise to 1.5°C above pre-industrial levels. Companies following SBTi guidelines are required to submit their targets for validation.

The SBTi iron and steel sector guidance holds the potential to increase transparency and raise the climate ambitions of steel producing companies by providing clear and actionable steps to set, measure, and report net zero targets. This tool acts in accordance with the Greenhouse Gas (GHG) Protocol emission scopes and requires that at least 95% of all Scope 1 and Scope 2 emissions be included in near-term targets. Scope 3 emissions must also be included if these emissions represent at least 40% of the total Scope 1, 2, and 3 emissions.

For long-term targets aiming at net zero emissions, companies must report on Scopes 1, 2, and 3 and at least 90% of Scope 3 emissions need to be covered.

Given that SBTi targets and emissions accounting are specific to the company level, the SBTi guidance is not a suitable benchmarking approach for steel product comparison between producers. Nevertheless, the submission and validation of targets by SBTi increases the transparency of steelmakers committed to achieving net zero emissions by 2050 and provides an opportunity for outside enforcement mechanisms (i.e. governments and financial institutions) to hold companies accountable to their net zero targets. Companies with verified targets can communicate these as science-based and aligned with global climate goals, and the targets are featured on SBTi’s target dashboard.

In June 2024, European steel manufacturers SSAB and Thyssenkrupp — both top 50 steel producers and among companies that have publicly announced projects to produce green steel — announced the approval of their net zero targets by SBTi, for dates before and by 2050, respectively. Both companies followed the SBTi iron and steel sector guidance to set specific short- and long-term targets for reducing their Scope 1, 2, and 3 emissions.

The example set by these steelmakers paves the way for broader adoption of the guidance across the iron and steel sector, helping to establish science-based targets for the industry to reach net zero by 2050.

Individual targets and collective action: How the top 50 steel producers can lead on net zero

The increase in target reporting among the top 50 steel producers is a positive sign of progress, yet it falls short of what is needed to reach net zero by 2050 for the sector. In parallel, some companies have delayed their goal timeline to after 2030, despite sharing 2030 commitments last year. As industry leaders, these companies not only have the capacity to drive change within their own operations but also to encourage the entire sector. By setting more ambitious goals, demonstrating the viability of achieving them, and reporting progress towards these goals, the industry’s top producers can pave the way for others and push the industry towards a possible-to-abate future. With the development of the SBTi iron and steel sector guidance, setting transparent and ambitious net zero targets is easier than ever before.

Reaching net zero emissions won’t be possible without first setting a goal and intermediate milestones that cultivate a mindset of ambition to transition away from coal-based steel production and demand. In parallel, setting milestones and the continuous measurement of emissions reductions in the Greenhouse Gas Protocol Scopes 1, 2, and 3 can prove the effectiveness of transition enablers such as policy, industry standards for low embodied carbon materials, technology readiness, and access to finance and technology globally.

However, milestones and ambitious, science-based targets alone are insufficient to achieve significant emissions reductions. External policies and finance mechanisms need to be aligned to enforce the timing proposed by steelmakers’ target goals.

Additionally, stand-alone efforts by steelmakers will fall short on a global scale. The success of the iron and steel industry’s transition away from fossil fuels will depend on international cooperation, knowledge sharing, technology co-development, and support from industrialized countries to transitioning developing countries. The top 50 steel firms can set an example of leadership as not only steel producers, but as emissions reducers through target setting and collective action to reach net zero 2050.

¹ Direct CO2 emissions are calculated using the International Energy Agency’s roadmap and methodology and reported a 2022 average for direct CO2 emissions intensity of 1.41 tonnes of CO2 per tonne of steel. Indirect and direct CO2 emissions are calculated using the World Steel Association’s reported 2022 global average of direct and indirect CO2 emissions intensity of 1.91 tonnes of CO2 per tonne of steel.

About the Green Steel Tracker (LeadIT)

The Green Steel Tracker aims to support decision makers in policy and industry, academia as well as civil society, by tracking public announcements of low-carbon investments in the steel industry and presenting them transparently in one place.

About the Global Steel Plant Tracker

The Global Steel Plant Tracker (GSPT) provides information on global crude iron and steel production plants and includes every plant currently operating at a capacity of 0.5 million tonnes per year (mtpa) or more of crude iron or steel. The GSPT also includes all plants meeting the 0.5 mtpa threshold that have been proposed or are under construction since 2017 or retired or mothballed since 2020.

About the Global Blast Furnace Tracker

The Global Blast Furnace Tracker (GBFT) is a worldwide dataset of blast furnace units. It tracks each of the furnaces at iron and steel plants in GEM’s Global Steel Plant Tracker (GSPT) and includes unit-level capacities, key dates, and statuses for each furnace. Relining data, including dates and costs, are also tracked for each furnace where available

About the Global Energy Monitor

Global Energy Monitor (GEM) develops and shares information in support of the worldwide movement for clean energy. By studying the evolving international energy landscape and creating databases, reports, and interactive tools that enhance understanding, GEM seeks to build an open guide to the world’s energy system. Follow us at www.globalenergymonitor.org and on Twitter/X @GlobalEnergyMon.

About LeadIT

The Leadership Group for Industry Transition (LeadIT) gathers countries and companies that are committed to action to achieve the Paris Agreement. It was launched by the governments of Sweden and India at the UN Climate Action Summit in September 2019 with support from the World Economic Forum.  In recognition of the progress made by LeadIT, India and Sweden reaffirmed their commitment to its mission and established a new work pillar for LeadIT with a focus on technology transfer and codevelopment, and a dedicated industry transition platform (ITP) between the two countries. 

The LeadIT Secretariat is hosted by the Stockholm Environment Institute (SEI) and manages the work of the Leadership Group. Follow LeadIT and the Green Steel Tracker at www.industrytransition.org and on LinkedIn.

The post A matter of transparency: 2024 insights on the steel industry’s evolving commitments to reach Net Zero by 2050 appeared first on Global Energy Monitor.

• High-quality iron ore reserves, abundant renewable electricity, and a skilled workforce make Brazil a prime candidate to lead Latin America’s green steel transition.
• Brazil’s well-developed and rapidly growing renewable energy sector will be instrumental in the large-scale green hydrogen production required to ramp up steelmaking via the low-emissions hydrogen-direct reduced iron (DRI) route. Brazil ranks among the world’s top ten nations in operating hydropower, bioenergy, and utility-scale wind and solar capacity, as well as within the top three for prospective utility-scale solar and wind capacity.
• Despite efforts to partially decarbonize the Brazilian steel industry through the use of biochar in blast furnaces (BFs) and scrap in electric arc furnaces (EAFs), two-thirds of Brazil’s operating steel capacity continues to rely on emissions-intensive, coal-based blast furnace-basic oxygen furnace (BF-BOF) technology. 
• Lower-emissions EAF and DRI technology are less prevalent in Brazil than in most other large steelmaking countries. EAFs account for less than one-quarter of Brazil’s steelmaking capacity, and DRI capacity is limited to a single plant not currently operating.
• More than half of the coal-based BFs at Brazil’s largest steel plants are relatively new or recently relined and are thus capable of operating well into the 2030s without significant interventions to switch technologies. Advance company planning, government policy, financial incentives, and international cooperation will be crucial in supporting green alternatives.

Brazil is well-positioned to become a global green iron and steel leader, thanks to its established industrial infrastructure, high quality iron ore reserves, a skilled workforce with steelmaking expertise, and unparalleled renewable energy resources. Moreover, a July 2024 report from Global Efficiency Intelligence estimates that Brazil has the capacity to produce green steel at a lower price than other leading steelmaking nations. The key to seeing this possibility become a reality is strategic policy setting and sectoral alignment with the country’s net zero targets. Hosting COP30 in 2025 could be the tipping point that propels Brazil into a future as the leader on green steel.

Brazil’s steel industry currently relies heavily on emissions-intensive blast-furnace-basic oxygen furnace technology, with 76% of operating steel capacity using BF-BOF and just 24% using the lower-emissions electric arc furnace alternative. The World Economic Forum estimates that emissions from Brazil’s steel industry could rise nearly a third by 2050 without proactive moves to boost demand and supply of green iron and steel. However, the country could take advantage of its many strengths to embark on a low-emissions overhaul. 

To bring Brazil in line with global efforts to limit global warming to 1.5°C will require a concerted effort from both government and industry. Brazil’s president, Luiz Inácio Lula da Silva, has articulated the importance of including domestically produced green steel in national energy transition plans, and Brazil’s New Industry Plan, launched in 2024, sets a goal of reducing industrial CO₂ emissions by 30% per unit of value added by 2033. With the right combination of private initiatives and government incentives, Brazil could transform its heavy industry sector into a model for Latin America and the world.

Overview of Brazil’s iron and steel industry

With 44 million tonnes of operating steel capacity across 21 steel plants, Brazil ranks as the ninth largest producer globally and first in Latin America.
Roughly three-quarters of Brazil’s current iron and steelmaking capacity relies on older, more emissions-intensive BF-BOF technology, which also tends to be operated at higher rates than the lower-emissions EAF technologies, leading to an even higher share of annual production using BF-BOF (Table 1).

Brazil is also a top producer and exporter of iron ore, surpassed only by Australia. Iron ore is an important component in iron and steelmaking, and Brazil boasts some of the highest quality iron ore anywhere on earth, with iron content ranging from 60% to 67%. High-quality ore is especially critical for the lower-emissions green hydrogen-based DRI production method.

Another distinctive feature of Brazil’s steel industry is its significant use of biochar, which has been adopted by several companies as a replacement for coal in blast furnaces, potentially resulting in reduced greenhouse gas emissions.

Technologies for decarbonizing Brazil’s iron and steel industry

The most common and widely-proven path to decarbonizing the steel industry is the replacement of emissions-intensive, coal-based BF-BOF technology with lower-emissions EAF technology, including both scrap- and direct reduced iron-fed EAFs. Emerging low-emissions technologies that may be even more effective in the Brazilian context include molten oxide hydrolysis and DRI production using green hydrogen, both of which require large amounts of electricity and could take full advantage of Brazil’s exceptional renewable energy potential. 

BF-BOF retirements and conversions

Currently, Brazil’s seven largest steel plants (Table 2) use the BF-BOF steelmaking route, employing coal rather than biochar as their primary reducing agent. 

Collectively, the plants on this list account for 87% of Brazil’s operating blast furnace capacity, and 72% of Brazil’s total steelmaking capacity. Prospects for imminent conversion or retirement at most of these plants do not look promising, given that more than half of the blast furnaces at Brazil’s largest steel plants have been relined or started up within the past one to eight years (Table 2). Typically, blast furnaces need to be relined every 17 years, meaning that most of Brazil’s fleet of BFs still have an anticipated remaining lifespan of one to two decades without intervention. 

The relining process is expensive, costing approximately 25% to 50% of a new BF. This cost could help drive interventions by creating an economic incentive for steelmakers to switch to less emissions- and electricity-intensive EAF technology. Another incentive for transitioning away from BFs is that the Brazilian steel industry is entirely reliant on coke made from imported coal, with no domestic production of metallurgical coal. The cost of relining or investments in new BF furnaces is dwarfed by their operating costs, so investments in green steel will only take place if companies consider their operation cost competitive in comparison to BFs.

Nonetheless, companies need to begin implementing transition plans now, with an eye to replacing blast furnaces with lower-emissions alternatives at the earliest possible date.

Benefits and pitfalls of biochar in blast furnaces

To date, Brazil’s efforts to decarbonize its national steel industry have focused primarily on the use of biochar as a replacement for coal in blast furnaces. As of 2021, roughly 11% of Brazilian steel production was based on charcoal derived from biomass, making Brazil the largest producer of biochar-based steel globally. Seven Brazilian iron and steel plants in the states of Minas Gerais, Maranhão, and Pará have converted their operations to run at least partially on biochar sourced from company-planted eucalyptus forests (Table 3). Brazilian steelmaker Gerdau, with 250,000 hectares of managed forest, is the world’s largest producer of plant-based charcoal. 

Some sources estimate that Brazil’s use of biochar in replacing coal has reduced the sector’s emissions intensity from BF-BOF processes by approximately 0.4 tCO₂e per tonne of crude steel. However, estimates of carbon emissions reduction from biochar vary widely, depending on the amount and source of biochar used and at which stage in the process it gets used. 

Some of the biochar used in Brazilian plants has been certified by reputable organizations such as SGS-Société Générale de Surveillance, FSC-Forest Stewardship Council, and CDP-Carbon Disclosure Project). SGS has certified three of Brazil’s smaller iron and steel producers — Aço Verde do Brasil, Aperam, and Vetorial — as carbon neutral due to their use of biochar, and emissions intensity measurements at other Brazilian steelmakers using biochar are generally lower than at companies using coal in their blast furnaces. 

From an emissions perspective, if charcoal is assumed to be carbon neutral, the overall CO₂ intensity of Brazil’s BF-BOF steel production ranks lowest among the major steel-producing countries, at 1.55 tonnes of CO₂ per tonne of crude steel, well below the 2.0 tonnes of CO₂ per tonne crude steel global average. However, Brazil’s BOF-BF carbon intensity figure rises to 2.10 tonnes CO₂ per tonne crude steel if charcoal is not considered to be carbon neutral.  

Assessments of biochar’s carbon neutrality are complex and often controversial. While biochar may reduce direct emissions from iron and steel production, some biochar sources may create significant upstream emissions impacts from deforestation and processing, negating or even exceeding the amount of emissions saved in the steelmaking process. 

Despite serious efforts within Brazil to assess and certify the sustainability of forest farming for biochar production, there is also a risk that Brazil’s trade partners may not accept charcoal as carbon-neutral in the future — for example, as the EU increases scrutiny of biomass sustainability and imposes more stringent supply chain reporting and/or disclosure obligations.

Ultimately, the amount of coking coal that can be substituted with biochar in a blast furnace is limited — partial coal replacement still equals coal dependence.

Transitioning to EAFs

To fully transition away from coal-based steelmaking and decarbonize the steel industry, Brazil will need to replace BF-BOF technology with lower-emissions EAF technology. Steel produced through recycling in EAF units will achieve the lowest emissions-intensity of all EAF production methods, but direct reduced iron-fed EAFs will also play an important role in filling the gap left by limited scrap supplies.

Scrap-based EAF expansion

EAFs currently account for only about 24% of Brazilian steelmaking capacity, and the number of Brazilian companies planning to add new EAFs in the foreseeable future is limited. Gerdau, Brazil’s leading scrap-based steelmaker and Latin America’s largest scrap recycler, owns several operating EAF plants around the country, accounting for 32% of the country’s EAF capacity and 8% of its total operating steel capacity. In early 2024, Gerdau reported an emissions intensity of 0.86 tonnes CO₂e per tonne of steel produced, reflecting heavy use of scrap (approximately 73%) in its EAF operations, along with biochar as a reducing agent in its BF-BOF facilities. Gerdau has signaled its intention to expand operations at its Maracanaú plant in Brazil’s Northeast region, but details on technology and capacity remain unclear. Two other companies (ArcelorMittal and Simec) have EAF units in development with a total capacity of 1,700 ttpa. 
Limited and volatile scrap supply will likely constrain Brazil’s expansion of scrap-based EAF steel production. Global scrap supply in general is forecast to lag behind demand, although Brazil in 2023 became a net scrap exporter due to a variety of factors, including a slump in domestic steel sales prompted by competition from China.

Domestic green iron production

Given the limitations of scrap-based EAF production, hydrogen-based direct reduced iron production (H₂-DRI) will play an important role in decarbonizing the steel industry. Hydrogen-based DRI fed to an EAF can fully replace BF-BOF steelmaking as a lower-emissions production process, but Brazil currently has no operating DRI plants. Obstacles to developing a Brazilian DRI industry have included the significant capital expense of developing these projects and the challenge of competing with low-cost Chinese steel imports. 

Affordable financing instruments and international development support could bridge this gap, and given Brazil’s access to top quality iron ore and renewable energy for green hydrogen production, the country has strong potential to operate H₂-DRI units locally and export DRI in its cooled form called hot-briquetted iron (HBI) as value-added products, rather than exporting iron ore pellets. This approach would be beneficial to Brazil’s economy and strategically advantageous for global industrial decarbonization, allowing regions like Europe that have more existing EAFs and steelmaking capacity to manufacture steel from Brazilian green iron rather than building out their own DRI and importing the ore. 
In September 2023, Brazilian iron giant Vale announced plans to create an HBI production hub at the Port of Açu, initially using Brazilian fossil gas rather than hydrogen in the DRI production process. Iron production using fossil-based DRI has a lower emissions intensity than that of blast furnace technology, but the emissions do not reach the decarbonization potential of hydrogen-based DRI. Thus, Brazil’s green steel transition should aim for green hydrogen-based DRI, but plants like the Vale project that begin with fossil gas-based DRI and commit to converting to green hydrogen in the future could function as a stepping stone towards green steel. Vale has also announced an initiative in conjunction with H2 Green Steel to study the potential development of low-carbon industrial steel hubs in Brazil revolving around green hydrogen and HBI production.

Green hydrogen

To support lower-emissions DRI production, Brazil will need to build out its green hydrogen capacity. Production of green hydrogen demands huge amounts of renewable energy, a sector where Brazil has already established global leadership. Brazil generated 93% of its electricity from renewables in 2023, and has the cleanest energy mix among the G20 countries. In 2022, Brazil also attracted more new investment in renewables (US$25 billion) than any country except the U.S. and China. 

According to data from GEM’s Global Integrated Power Tracker, Brazil ranks second globally in operating hydropower and bioenergy capacity, seventh globally in operating utility-scale wind capacity, and ninth in operating utility-scale solar capacity. Future prospects for wind and solar are even more impressive. GEM data show that Brazil has 180 GW of utility-scale wind farms in announced, pre-construction, or construction status, placing the country third globally behind China and Australia. Brazil’s 139 GW of prospective utility-scale solar farms ranks second globally, trailing only China.

Brazil’s Ministry of Mines and Energy estimates that the country has the potential to become a green hydrogen powerhouse, generating an estimated 1.8 gigatonnes of low-carbon hydrogen annually at a lower cost than any other nation. The development of a robust Brazilian green hydrogen industry could in turn lure companies to build new iron and steel mills in Brazil to take advantage of the country’s unique combination of green hydrogen, high-quality iron ore, and 24/7 clean power.

Brazil launched a national hydrogen program in 2021, and in August 2024 President Lula signed into law a legal framework for low-carbon hydrogen production. Brazil’s Northeast is especially fertile ground for green hydrogen, given the region’s exceptional wind and solar potential. Multiple projects are already under development in Northeastern states such as Piauí and Rio Grande do Norte, and in Ceará, where private enterprises have signed dozens of MOUs with the state government. Companies have also launched pilot green hydrogen projects in the steel-producing states of Brazil’s Southeast, including Minas Gerais, Espírito Santo, and Rio de Janeiro. Some developers plan to obtain electricity for their green hydrogen initiatives via purpose-built, captive wind and solar projects or direct partnerships with local energy producers, while others will take advantage of the national grid, which can deliver renewable electricity from states with greater wind and solar capacity to support hydrogen production at industrial facilities elsewhere in Brazil. In April 2024, the Brazilian government awarded contracts for nearly 4500 km of new transmission lines and substations to bolster nationwide renewable electricity distribution.

Molten oxide electrolysis

Developed by the American company Boston Metal, molten oxide electrolysis (MOE) is a novel technology that uses electric current to directly separate oxygen from iron ore. If it can be developed on an industrial scale, MOE could lead to decarbonized steel production that eliminates the need for hydrogen. Boston Metal expects to achieve the first commercial production of MOE-based green iron in the next couple of years, and the company inaugurated a plant in Minas Gerais state in March 2024, with the goal of starting MOE production in Brazil in coming years. While MOE production eliminates the need for hydrogen, one of the challenges of the process is the need for a constant, reliable source of electricity. However, Brazil is well-positioned to produce green steel using MOE, thanks to its versatile mix of renewable electricity resources.

COP30 and Brazil’s green steel transition

Brazil has a golden opportunity to define itself as a green steel champion on the global stage when it hosts COP30 in November 2025. Government and industry should act now to define ambitious industrial decarbonization policies that take advantage of Brazil’s tremendous potential.

Brazil’s two largest steelmakers, Gerdau and ArcelorMittal, have stated their intentions to become carbon neutral by 2050. However, the Brazilian government needs to provide more guidance and support to advance the green steel transition across the entire sector. Brazil’s October 2023 NDC update failed to establish specific mitigation measures or net zero emissions targets for the steel industry. Moreover, despite President Lula’s occasional favorable mentions of green steel, the industrialization action plan unveiled in January 2024 did not directly address the steel sector. 

Global pressure from hosting COP30 may finally drive this change. In May and June 2024, the Brazilian government convened a series of workshops aimed at defining industry-specific decarbonization targets, including for the steel sector. The government aims to unveil a National Industrial Decarbonization Strategy by November 2024, to be integrated with the National Climate Change Plan and the Nova Indústria Brasil program. 

The United Nations Industrial Development Organization (UNIDO) also recently announced a partnership with Brazil to help the country develop “Industry, Cement and Steel Sectoral Mitigation Plans,” while the UK and Brazilian governments joined forces to launch Brazil’s “Industrial Decarbonization Hub.”  Both initiatives aim to develop an industrial decarbonization policy in Brazil by COP30. However, details of the policy goals remain vague, and the success of these initiatives requires follow-through from the Brazilian government. 

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Building momentum for iron and steel decarbonization

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Pedal to the Metal is an annual survey of the current and developing global iron and steel plant fleet. The report examines the status of the iron and steel sector compared to global decarbonization roadmaps and corporate and country level net zero pledges. 

The data comes from GEM’s Global Steel Plant Tracker (GSPT), an online database of all operating and in development crude iron and steel production plants with a capacity of 0.5 million tonnes per year (mtpa) or more, and the Global Blast Furnace Tracker (GBFT), a worldwide dataset of blast furnace units at iron and steel plants in the Global Steel Plant Tracker.

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The global iron and steel industry made major strides towards net zero goals in the last year, with more lower-emissions electric arc furnace (EAF) steelmaking coming online and entering the development pipeline than ever before, according to Global Energy Monitor’s (GEM) annual report on the industry.

The report shows two trends supporting this shift: First, nearly all newly-announced steelmaking capacity follows the EAF production route (93%), which indicates a strong boost in electric arc furnace steelmaking in the years to come. 

Second, planned capacity and retirements indicate a transition away from coal-based steelmaking: The global fleet will count an additional 171 million tonnes per annum (mtpa) of higher-emissions basic oxygen furnace (BOF) capacity, 310 mtpa of EAF capacity, and 80 mtpa of capacity with unknown technology.

If these developments and retirements take effect, global operating steel capacity should sit just under the IEA’s net zero-aligned target of 37% EAF steelmaking by 2030, and with heightened momentum the goal is increasingly attainable.

The shift toward a carbon neutral iron and steel industry is multi-pronged and generally involves the replacement of coal-based BF-BOF capacity with hydrogen-DRI or scrap-based EAF production. 

Data from Global Energy Monitor’s 2024 Global Steel Plant Tracker and Global Blast Furnace Tracker indicate that, while there has been a notable move toward the lower-emissions direct reduced iron (DRI) and electric arc furnace (EAF) production, blast furnace (BF) development is ongoing and presents a distinct risk for the climate and as stranded assets for top developers. 

In 2023, the global iron and steel industry saw progress toward net zero goals, with more electric arc furnace steelmaking coming online and entering the development pipeline than ever before. While more BF-BOF capacity was retired than added last year, new emissions-intensive, coal-based blast furnace capacity coming online and in construction threatens decarbonization targets and risks further entrenching the industry in fossil fuels.

Progress in iron and steelmaking capacity with lower-emissions technologies, but new coal-based capacity poses decarbonization concern

Changes in operating capacity in 2023 by technology type, in million tonnes per year (mtpa)

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The transition to greener steel is afoot

The transition toward electric arc furnace steelmaking is underway, but pressure must be maintained all the way through to project completion if real progress is to be seen. 

While lower-emissions EAF steelmaking is being announced at record rates, less than 14% of this potential capacity is currently being built. The data show that of all projects that have actually begun construction, nearly 46% are still BOF-based. 

Of all 774 mtpa of steelmaking capacity under development, 223 mtpa is in the construction phase. Together, China and India are responsible for 53% of all developments, but especially dominate as developers of coal-based capacity.

India emerged as the top developer of coal-based BOF capacity last year. This year, India’s buildout of BOF capacity has grown so large that it has also replaced China as the top developer of overall steel capacity, even as China remains the top developer of EAF capacity. India is responsible for one-third of total global steelmaking capacity that is announced or under construction (258 mtpa).

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Notable shift away from coal-based blast furnaces in new capacity, but carbon lock-in fears persist

Over one-third of ironmaking under development is DRI-based, but DRI must be operated with a green hydrogen reducing agent to achieve net zero production.

DRI made with green hydrogen is a critical piece of the transition as secondary, scrap-based steelmaking via EAF alone is not enough to meet global needs for steel. 

DRI makes up 36% of developing global ironmaking capacity with a known production route, compared to only 9% of global operating ironmaking capacity, a notable shift away from coal-based blast furnaces in new capacity. Clear plans for operating DRI capacity with a green hydrogen reducing agent are critical for net zero production.

Carbon lock-in concern continues, with 308 mtpa of new coal-based blast furnace ironmaking capacity under development globally. 

While DRI development is on the rise, the majority of operating and developing ironmaking is still blast furnace-based. As carbon-capture and storage fails to perform in the iron and steel industry, new coal-based BF development is increasingly out of alignment with a net zero future. Sixteen countries have new blast furnace capacity under development.

The progress is promising for a green steel transition. Never before has this much lower-emissions steelmaking been in the pipeline. At the same time, the buildout of coal-based capacity is concerning. What the industry needs now is to make these clean development plans a reality, while backing away from coal-based developments

Caitlin Swalec, Program Director for Heavy Industry at Global Energy Monitor

As the largest operators and developers of coal-based BF capacity, BF operations and development in China and India are key to understanding global iron and steel production in a net zero future. 

Despite little change in total operating and construction BF capacity in China since GEM’s 2023 data release, a closer look at announcement and construction dates shows that new blast furnace development is still strong in China, with 32 mtpa of BF capacity entering construction in 2023. 

While India has more BF capacity announced, China has more BF capacity that has progressed into the construction stage.

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How does steel and ironmaking capacity break down by country?

Of the operating capacity with a known production route, 1,483 mtpa (68%) uses BOF technology, 701 mtpa (32%) uses EAF. 

Asia operates over two-thirds (68%) of all steelmaking capacity, the majority of which is in China (1,075 mtpa) and India (123 mtpa), followed by Japan (109 mtpa). The United States also has 109 mtpa in steelmaking capacity.

Of global operating ironmaking capacity with a known production route, 91% is coal-based blast furnace (BF) and 9% is direct reduced iron (DRI). 

Asia continues to lead in operating BF capacity, with 61% of global operating BF capacity found in China, and India a distant second with 7% of global operating BF capacity.

Explore below to find out how operating and developing steel and iron capacity breaks down by status and technology type in a number of different key countries.  

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Data in the Global Steel Plant Tracker show that China has 151 million tonnes per annum (mtpa) of electric arc furnace (EAF) capacity operating as of January 2024. The remaining 913 mtpa is emissions-intensive, coal-based capacity. 

In 2022, China’s Ministry of Industry and Information Technology (MIIT) set a target to achieve at least 15% crude steel production using EAF capacity by 2025, which was walked back from an initial target of 20%. 

By 2025, China’s crude steel demand is projected to hit 910 mtpa, meaning that the country will need to produce 143 mtpa with EAF technology — less than the capacity currently installed — to achieve the 15% EAF production target. 

If China were to hit the 20% EAF production target by 2025, the country would need to produce 190 mtpa using EAF technology, requiring at least another 39 mtpa of EAF capacity to be added and operated by the industry by 2025. 

China currently has 48 mtpa EAF capacity under development, but 21 mtpa set to close, so the industry is set to add approximately 27 mtpa under current development and closure plans.

Reaching 20% EAF production by 2025 would reduce the industry’s emissions by a total of 217 mtpa CO₂, equivalent to an 11% reduction compared to 2022 emissions. That is roughly the same as taking 47 million passenger vehicles off the road.

Installing enough capacity to reach the 15–20% EAF production targets only achieves these emissions reductions if China operates its EAFs at similarly high capacity utilization rates to those of its coal-based capacity.

To date the main factors contributing to China’s low capacity utilization rates for EAF have been limited scrap and electricity supplies. However, China’s scrap supply is projected to grow rapidly in the next decade, and China has invested significantly to expand its grid, bringing relief to these pinch points. 

These shifts have made EAF production economically competitive with coal-based capacity, in addition to being environmentally favorable.

China’s current plans for the steel industry do not back up President Xi Jinping’s latest calls for green and low-carbon industries. With modest adjustments, China can take a crucial step towards decarbonizing the global steel sector.

Caitlin Swalec, Program Director, Heavy Industry

The post In China, a small boost to low-emissions steelmaking can mean big cuts to its carbon footprint appeared first on Global Energy Monitor.

Data in the Global Blast Furnace Tracker show that 16 blast furnace units with an approximate capacity of 30 million tonnes per year, or 55 percent of the country’s total steel production, are slated for relining in the next ten years. 

Relining is a costly investment decision that can extend the life cycle of coal-based steelmaking by decades, locking in significant emissions potential and diverting much-needed capital from lower-emissions technology like direct reduced iron plants and electric arc furnaces.

In 2022, Russia was the world’s fifth-largest producer of steel, with nearly two-thirds of the industry reliant on coal-based methods and only a smaller amount of electric arc furnaces in use.

But pressures from international carbon tariffs and corporate climate disclosures will challenge Russia’s export-heavy iron and steel industry to act on decarbonization. 

The EU’s Carbon Border Adjustment Mechanism and Corporate Sustainability Reporting Directive, together with the U.S. Securities and Exchange Commission’s Climate Rule are just a few of the initiatives that could squeeze coal-based steelmaking in Russia and beyond.

One path towards greener steel production is through the development of Russia’s nascent hydrogen economy. While the country has a plan to produce 550 thousand tonnes of hydrogen annually, Russia faces major challenges with limited options for export and few incentives to encourage domestic consumption. 

Switching from blast furnace steelmaking to low-carbon hydrogen-based methods would create domestic demand for hydrogen, with the added benefit of decarbonizing the country’s steel industry to comply with CBAM and other climate rules.

Dropping relinings and pursuing green hydrogen is a win-win for steel decarbonization.

Caitlin Swalec, Heavy Industry Program Director for Global Energy Monitor

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• New research shows that planned capacity for coal-based blast furnaces is 208.2 million tonnes per annum (Mtpa), two-and-a-half times the 83.6 Mtpa in planned primary green iron and steel capacity. 
• Latest data show only a third of the world’s top 50 steel producers have set targets to reach net zero emissions by 2050, despite these 50 producers being responsible for more than 60% of the sector’s emissions.

New plans for coal-based steelmaking capacity are outpacing greener primary steel production methods with only a third of the world’s top 50 producers having announced targets to reach net zero by midcentury, despite the need to drastically reduce emissions in the sector, finds a new report from Global Energy Monitor and Stockholm Environment Institute’s Leadership Group for Industry Transition. 

The report finds that planned coal-based blast furnace capacity worldwide totals 208.2 million tonnes per annum (Mtpa), two-and-a-half times greater than the 83.6 Mtpa in planned primary green iron and steel capacity. Investments in primary green iron and steel projects are growing, but mostly in developed markets and not fast enough to outpace emissions-intensive technologies.

The steel sector accounts for an estimated 7 to 9% of direct global greenhouse gas emissions, and the International Energy Agency has said that CO2 emissions from heavy industries need to drop 93% in order to reach net zero emissions by 2050. 

Yet only 17 of the largest 50 steel producers have publicly committed to achieving net zero by mid-century, despite these 50 producers being responsible for more than 60% of the sector’s emissions. The 17 producers that have a 2050 net zero goal account for more than a quarter (527 Mtpa) of global steel production. 

Data also show that only two of 50 producers have included Scope 3 emissions calculations in their net zero goals. Scope 3 emissions play a significant role in steelmaking and can account for well over 40% of overall emissions from the sector. Scope 3 emissions include those produced during material extraction, preparation and processing, transportation, as well as fuel and energy-related emissions not covered under Scope 1 or 2, including direct emissions from a company’s own furnaces, vehicles, and chemical processes, as well as the purchase of electricity.

The biggest steel producers are also the biggest culprits in terms of emissions. They must swap out coal-based processes for cleaner ones. But it’s impossible to score if you don’t know where the goalposts are. Ambitious and transparent targets are critical.

Caitlin Swalec, Program Director for Heavy Industry at Global Energy Monitor

The gap in announced primary green steel projects between the Global North and South underscores the importance of global partnerships to improve the business case and mobilize financing for low-carbon steel investments in all countries, including developing and emerging markets set for significant growth in the steel sector. Creating a level global playing field is also essential to support companies to commit to tangible, time-bound emissions reductions.

Eileen Torres Morales, Analyst at Leadership Group for Industry Transition

The post A Matter of Ambition: Examining the Steel Industry’s Commitment to Net Zero by 2050 appeared first on Global Energy Monitor.

Almost all of the coal-based capacity under development is in Asia (99%), with China and India holding the majority of those developments (79% together). 

While coal-based steelmaking has ceded part of its share to cleaner forms of production in recent years, the transition is moving far too slowly. 

According to the International Energy Agency’s Net-zero by 2050 scenario, the total share of ‘electric arc furnace’ capacity should reach 53% by 2050, making up at least 42% of primary production. This means 347 million metric tonnes (Mt) of coal-based capacity would need to be retired or canceled and 610 Mt of electric arc furnace capacity would need to be added to the current fleet, along with a significant build out of ‘direct reduced iron’ technology’.

The post Pedal to the Metal 2023: Time to Shift Steel Decarbonization into High Gear appeared first on Global Energy Monitor.

• Coal power plant permitting accelerated in the first six months of 2022, demonstrating increased government support for expansion. However, announcements of new projects, construction initiations and completions slowed down, indicating a waning appetite among power generators. Thermal power generation has been steeply loss making since early 2021.
• Steel companies have accelerated investments in new electric arc furnace capacity which will help the sector absorb more scrap steel and support peaking CO2 emissions from steelmaking.
• Investments in wind and solar power have expanded rapidly, approaching the market size needed to peak and reduce CO2 emissions.
• Investments in both new coal-fired power plants and in coal-based ironmaking capacity (blast furnaces) continue at a high level that is not aligned with Chinaʼs carbon goals. The most likely outcome is the build-up of excess coal-based capacity, and falling utilisation, rather than increased emissions.
  • 15 gigawatts (GW) of new coal-fired power capacity was permitted in the first half of 2022, an uptick compared with last year but less than in 2020.
  • 30 million tonnes per annum (Mtpa) of new blast furnace capacity was announced in the first half of 2022, the largest amount for the first half-year since 2019.
• New investments in coal-based power and steelmaking capacity in the first six months of 2022 will result in $8.5 billion (CNY 82 billion) and $15-22 billion (CNY 100-150 billion) in stranded capacity, respectively, if Chinaʼs low-carbon transition is successful. The presence of large amounts of newly built coal-based capacity complicates the transition economically and politically.

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Much of this stranded asset risk is concentrated in Asia: 80% of the BOF steelmaking capacity under development globally is planned in China and India. An additional 14% of the BF-BOF steelmaking capacity under development is planned for Indonesia, Vietnam, and Malaysia.

Yet progress towards decarbonizing the sector by replacing BF-BOF steelmaking with the less emissions-intensive electric arc furnace (EAF) pathway is stagnant. According to the International Energy Agency’s Net-zero by 2050 scenario, the share of EAF steelmaking capacity should reach 37% by 2030 and 53% by 2050. This target requires an additional 576 mtpa EAF capacity while at the same time canceling or retiring 419 mtpa BOF capacity. 

According to data in the Global Steel Plant Tracker, the shares of capacity by steelmaking technology would only shift from 69% BOF and 31% EAF in 2022 to 68% BOF and 32% EAF in 2030, and remain approximately the same through to 2050. 

The report also finds that emissions estimates for steelmaking fail to account for emissions from metallurgical coal mining. The steel industry currently emits approximately 2.6 gigatonnes of direct CO2 emissions per year and 1.1 Gt of indirect CO2 emissions from the power sector and combustion of steel off-gasses. If the methane emissions from metallurgical coal mining are accounted for in global assessments of steelmaking emissions, the footprint of the steel industry may be as much as 27% (1 Gt CO2-e20) higher than currently reported.  

“Transitioning to less carbon-intensive steelmaking is a big part of countries meeting their net zero goals. We need to stop investing in coal-based blast furnace basic oxygen equipment and speed up the shift towards electric arc furnace steelmaking.”

Caitlin Swalec, Project Manager for the Global Steel Plant Tracker

The Global Steel Plant Tracker covers 2,208 mtpa operating crude steelmaking capacity, approximately 90% of global capacity according to OECD estimates. It also covers 1,417 mtpa operating BF capacity and 123 mtpa operating direct reduced iron capacity, approximately 89% and 90% of global capacity, respectively, making this the most up-to-date comprehensive tracker of global steel capacity developments.

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