Carbon Emission Reduction Targets
- Emission Commitments: Countries under the Paris Agreement commit to reducing greenhouse gas emissions to limit global temperature rise. The steel industry, known for its high carbon intensity, is pressured to implement emission reduction targets in line with Nationally Determined Contributions (NDCs).
- Shift Towards Low-Carbon Technologies
- Adopting New Technologies: To meet emission reduction targets, the steel industry is encouraged to adopt low-carbon technologies such as electric arc furnaces (EAFs), direct reduced iron (DRI) processes using hydrogen, and carbon capture, utilization, and storage (CCUS) technologies.
- Regulatory Compliance and Carbon Pricing
- Evolving Frameworks: Regulatory frameworks and carbon pricing mechanisms are expected to evolve, potentially impacting the cost structure of steel production. Carbon taxes, emissions trading schemes, and stricter emissions standards may incentivize investments in cleaner technologies.
- Supply Chain Transparency and Sustainability
- Tracking and Disclosure: The Paris Agreement promotes transparency across supply chains, prompting steel producers to track and disclose emissions from raw material extraction to final product delivery. This supports efforts to source sustainable materials and reduce embodied emissions.
- Innovation and Research Collaboration
- Collaborative Efforts: There is an increasing emphasis on collaborative research and innovation to develop breakthrough technologies that decarbonize steel production. Partnerships between industry, governments, and research institutions are crucial for scaling up new technologies.
- Energy Efficiency Improvements
- Reducing Energy Use: Enhancing energy efficiency in steelmaking processes is essential to reducing emissions. Innovations in heat recovery systems, process optimization, and the use of renewable energy sources contribute to lowering carbon footprints.
- Adaptation to Climate Risks
- Resilience Building: Steel producers must prepare for climate impacts such as extreme weather events, water scarcity, and supply chain disruptions. Building resilience through infrastructure upgrades, risk assessments, and contingency planning is crucial.
- Transitioning to Circular Economy Practices
- Recycling and Reuse: The circular economy principles encourage recycling and reusing steel products at the end of their life cycles, reducing demand for virgin materials and associated emissions from primary steel production.
- Compliance with International Standards
- Standard Adherence: Adherence to international standards and reporting requirements set by bodies like the World Steel Association (worldsteel) and International Organization for Standardization (ISO) ensures consistency in environmental management practices and regulatory compliance.
- Market Demand for Sustainable Products
- Shifting Preferences: Consumer and investor preferences for environmentally sustainable products are influencing market demand. Steel manufacturers that demonstrate commitment to reducing emissions and environmental impacts can gain a competitive edge in the global marketplace
Post 10 July
10 Ways the Paris Agreement Impacts the Steel Industry
