The challenges and opportunities for the steel industry to reduce carbon emissions

Since the 19th century, steel has been one of the driving forces behind our modernizing world. With applications in construction, railroads, cars, ships, engineering, agriculture, electronics and many other fields it is one of the most essential commodities on the planet. The steel industry is however also one of the most polluting industries, and with the world finally ramping up efforts to decrease global output of carbon emissions concerns are being raised about the feasibility of a low carbon steel industry.

Steel has been used for thousands of years, with ancient civilizations making alloys by combining iron with carbon to increase the strength of the iron. However, it was only since the 19th century, when Henry Bessemer introduced the Bessemer process to create steel, that steel started to become an intrinsic part of our society. Bessemer’s method allowed for the production of steel in large quantities for a very low price. His invention, followed by further improvements to the process, quickly caused an exponential rise in the production of steel. To be used for building railroads, creating the weapons of the World Wars, manufacturing ships and cars, building skyscrapers and bridges: steel has become one of the cornerstones of our society.

The largest problem facing the steel industry right now is the fact that the production process is extremely polluting. The current ways of production release huge amounts of carbon dioxide into the atmosphere, greatly contributing to man-made global warming. The steel industry is one of the most polluting manufacturing industries in the world, accounting for 8% of total global carbon emissions. Following a worldwide push to reduce the use of fossil fuels and move to more sustainable ways of living, increasing pressure is being put on the steel industry to reduce their carbon emissions as well.

So far, most efforts to reduce the emissions of carbon dioxide in the steel industry have been concentrated around efficiency improvements in the traditional blast furnaces. However, to be able to reach the climate goals that were set in the Paris agreement these incremental continuous improvements are not enough. As blast furnaces are inherently polluting, other technologies are needed to quickly reduce carbon emissions on a large scale throughout the industry. To meet the global goals set out in the Paris accord, the emissions coming from steel must fall by 50% in the next 30 years with a further decline to zero thereafter.

The most used technology that could help decarbonize the steel industry at the moment is the recycling of steel with an Electric Arc Furnace. As steel is infinitely recyclable, the melting of scrap steel using an EAF to create new steel could have a large impact on the emissions in the industry. It is very important here that the electricity used in the EAF is also coming from sustainable sources, otherwise the emissions are just being transferred from the steel industry to the energy industry.

Other methods to reduce the emissions of carbon dioxide in the production process of steel are the CCS and CCU methods. CCS stands for Carbon Capture and Storage and means that carbon is captured instead of released into the atmosphere after which it is stored, for example underground. In the CCU method - which stands for Carbon Capture and Usage - carbon is captured and then used, for example as fuel by using CO2 emissions to produce bioethanol. Both methods exist already but are very expensive and not yet available on an industrial scale.

Furthermore, alternative ways of producing new steel are also being developed. Instead of using a blast furnace that uses coal, Direct Reduced Iron is created using other reductants after which the DRI is turned into steel using an Electric Arc Furnace. The degree of decarbonization that can be achieved using this method depends on what reductant is used. Using natural gas as a reductant is already done a lot in gas-rich countries, however this does not achieve complete decarbonization. Another method would be to use hydrogen as a reductant to eliminate carbon emissions in the steel production process. This method is still very expensive at the moment and needs to be further developed to be able to be implemented on an industrial scale. The problem here is that most hydrogen is currently still considered grey as carbon fuel is used to produce it, it is essential here that only completely green hydrogen is used to fully eliminate carbon emissions.

In conclusion, there are some promising ways of cutting back emissions in the steel industry such as increasing EAF recycling and using new ways of production. However, large investments will be needed to further develop these methods and to implement them. Governments need to play an important role as well, for example by increasing carbon taxes on steel made in blast furnaces and also by incentivizing steel made through low emission methods. The price difference between these methods is currently still very high, although the difference is decreasing. Governments can play a part in lowering this price difference already and thereby hastening the switch to low emission steel. It is theoretically possible to completely decarbonize the steel industry, so for the future of our planet these investments are definitely worth it. The time to act is now and hopefully the worldwide steel industry and global governments will finally make the shift so that steel can become a green industry.

Alec Van Puyvelde



Bill Gates, “How to Avoid a Climate Disaster”, Knopf Publishing, 2021.