Major Steelmakers Lag in Transition to Net-Zero Emissions Production: Report
The report finds that the steel industry is still operating on coal-based blast furnaces, accounting for up to 90% of the sector’s emissions
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A new report involving 18 major steelmakers operating across 29 countries showed that none are currently ready to transition to net-zero emissions production. The report titled “SteelWatch Corporate Scorecard: The Transition Readiness Gap” said coal dependence remains the norm, despite many firms committing to long-term climate goals.
The report assessed companies across Asia, Europe, and the Americas, including Baosteel, Nippon Steel, POSCO, Tata Steel, ArcelorMittal, thyssenkrupp and Cleveland Cliffs, SSAB. Total scores for this assessment were derived from performance across 21 indicators grouped into five categories such as phasing out coal, scaling green, climate performance, targets, and transparency and social and environmental responsibility.
The steel industry accounts for around a tenth of global CO2 emissions and the report’s assessment found that all operate coal-based blast furnaces, an outdated technology that is responsible for up to 90% of the sector’s overall emissions.
Wide Gap Between Targets and Actions
According to the report, there is a wide gap between what is needed for a credible near-zero-emissions transition, and what companies are actually doing. Scores for the companies range from 8 to 46 out of 100, with most companies tightly packed in the twenties. The median score is 27, which underscores that positive actions like a net zero 2050 goal are not enough if not backed up with clear structural implementation.
“Not a single steelmaker has scored above 50 points out of 100, and even those at the head of the pack have big gaps to bridge before they can claim to be acting responsibly on the climate crisis,” said Caroline Ashley, SteelWatch Executive Director.
Within these scores, the assessment found that SSAB, a Sweden-based company is ahead from the lot, with German-based Thyssenkrupp second, with scores of 46.2 and 41.9 out of 100 respectively. These two companies as they have plans in place for green iron and blast furnace retirement, without the reinvestment or recent relining of coal-based assets that is common among their peers. Even so, both still need to implement and scale green iron.
Companies like Hyundai Steel, Nippon Steel, and HBIS were among the worst performers, with total scores of 21.2, 16.8 and 8.3 out of 100 respectively. Their heavy reliance on coal-based blast furnace production, limited progress or reporting on renewable energy, and lack of confirmed action, in this reporting period, on green iron development are missed opportunities to close transition readiness gaps.
Coal Remains Prevalent and No Mention of Green Iron
Across the scorecard, coal dependence emerged as the most persistent drag on transition readiness. For some companies, coal exposure has traditionally been driven by a consequence of legacy assets and national contexts. For others, it is being actively prolonged through new capacity additions, relinings, or lifetime extensions of blast furnaces. Companies that couldn’t demonstrate a declining trend in coal consumption consistently scored lower on readiness.
The report found the near-absence of green iron production, an iron produced with lower emission intensity. Almost all the companies scored zero or close to zero in this category making it the worst performing area of the scorecard.
The report noted that despite the concerning picture, most of the companies do not currently have blast furnaces under construction. SSAB has a notable share of renewable energy uptake, and some companies have a measurable share of direct reduction of iron (DRI) capacity that could and should be shifted to near-zero-emissions iron production.