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14 September 2021

European steel industry on course to blow carbon budget by 2035

European steelmakers have until 2033 to invest in cleaner technologies if the EU is to meet its net-zero target by 2050, a report from research organisation Industry Tracker reveals.

By Energy Monitor Staff

The European steel industry is on course to exceed its emissions budget by 2035, as only 26% of its carbon budget remains, warns a report from UK-based research organisation Industry Tracker.

steelworkers-foundry-furnace

A group of foundry workers at the melting furnace during the production of steel castings. (Photo by industryviews/Shutterstock)

According to the report, existing steelmaking assets could release a further 2.3 billion tonnes of CO2, compared with a budget of just over three billion by 2050, based on the International Energy Agency’s net-zero pathway.

The dominant method for making primary steel is via a blast furnace. This technology is the biggest contributor to emissions in steelmaking. Yet emissions reductions from blast furnace efficiency improvements have plateaued at 1% for the last 20 years.

Blast furnaces have a life cycle of around 20 years before they need upgrading. To meet the EU’s net-zero target for 2050, companies must stop renewing blast furnaces before 2030 and have between now and 2033 to invest in new clean technologies such as hydrogen-based steel production and carbon capture, use and storage, the report says.

Most steel companies will likely require support via public funding, it adds, as the cost of the low-carbon transition for them is estimated at $4bn–34bn.

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