A recent survey has revealed that many of the world’s leading steelmakers are falling behind in transitioning to low-carbon energy sources. Despite the availability of greener technologies, the industry remains heavily reliant on fossil fuels, exacerbating its significant carbon footprint.
Steel production accounts for 7% of global CO2 emissions, equivalent to the emissions of an entire country like India. Traditional coal-fired blast furnaces release approximately 2 metric tons of CO2 for every ton of steel produced. However, technologies such as electric arc furnaces (EAFs) powered by renewable energy and green hydrogen-based iron production offer cleaner alternatives. The survey, conducted by Action Speaks Louder (ASL), assessed 18 major steel producers. Sweden’s SSAB emerged as the top performer, with 19% of its energy sourced from renewables. Conversely, South Korean giants Hyundai Steel, Dongkuk Steel, and Posco recorded almost zero renewable energy usage, despite their substantial EAF production capabilities. India’s JSW Steel reported only 0.4% of its energy from renewables, but the company has pledged to transition to clean energy and waste gas utilisation across its operations by 2030.
Similarly, China’s Baosteel, the nation’s largest steel producer, also sourced just 0.4% of its energy from renewables in 2022 but stated that it is drafting new clean energy targets. The steel industry is classified as “hard to abate” due to the high costs associated with transitioning to cleaner technologies. According to Laura Kelly, ASL’s strategy director, the real challenge lies in affordability rather than technical feasibility. Many firms maintain investments in fossil fuel infrastructure, such as coal import terminals and pipelines, further hindering the shift to renewables. The transition to clean energy is becoming increasingly urgent as carbon pricing mechanisms gain traction globally. Companies that delay adopting greener technologies risk falling behind strategically, if not financially, in the short term. As pressure mounts from stakeholders and regulators, the industry’s pace of change will be critical in aligning with global climate goals.
