The global steel industry could reach net-zero by 2050 through recycling, hydrogen, and carbon capture – but it won’t be cheap. Bloomberg’s energy data and analysis unit said it could cost the steel industry anywhere from $215 billion to $278 billion – but there’s a catch.
Steel produced under green conditions could, in fact, cost less to make long-term. Right now, steel costs $726 per metric ton. Under new technology, it could cost $418 to $598 per ton – significant savings.
Steel production currently emits about 7% of the world’s greenhouse gases into the atmosphere. 69% of steel production is fueled by coal.
According to the Bloomberg report, “The steel industry has a challenging path to decarbonization: It is heavily reliant on coal, has limited opportunities to increase its share of recycled production due to scrap availability, and will need to wait for hydrogen costs to fall to realize cost-competitive clean production.”
Companies cannot expect to do this alone; government support will be needed. Bloomberg believes that subsidies up to $145 per ton of carbon would help incentivize change.
Some steel companies, such as ArcelorMittal SA, find alternate ways to offset emissions while working towards net-zero. Their program, XCarb green steel certificates, was launched this year. It provides customers with the chance to lower their carbon footprint through carbon savings that are verified and converted into certificates – like a carbon credit.
The carbon credit industry has grown over this past year. Countries and companies alike recognize its potential to improve the environment and spark economic development.
Through innovative technology, the use of carbon offsets, and increased regulation, net-zero steel production seems within reach – even if it is expensive upfront.
For businesses to continue to thrive, reduced emissions are a must. Countries, along with consumers, will not have it any other way.