A Green Deal on steel

Written by Axel Eggert on 4 March 2020 in Thought Leader
Thought Leader

Axel Eggert explains why a ‘Green Deal on steel’ could be the flagship policy for the EU’s climate strategy.

Photo credit: EUROFER

The European Commission’s Green Deal presents us with a path towards climate neutrality. This is a hugely ambitious aim, and for a whole continent to have a net neutral impact on the climate is a revolution in the way we live - the likes of which has never been seen before.

The European steel industry shares this ambition. We have mapped out the path ahead and are confident that we can achieve an 80-95 percent reduction in CO2 emissions by 2050 if the right circumstances prevail.


But let me be clear: our transition to carbon-lean, ‘green’ steel requires a fundamental change in the way steel is made, because our current processes are already at the technical and thermodynamic limits.

The breakthrough technologies that we need mean using hydrogen and renewable electricity to produce steel; they also mean capturing and either storing or using carbon that is emitted to bring the environmental footprint of our production as close to zero as possible.

The technical demands are enormous: our sector alone will require 400 terawatt hours of renewable electricity, of which 250 terawatt hours for the production of 5.5 million tonnes of hydrogen. This is the same as the current electricity demand of Germany, and this quantity will be needed every year from 2050 at the latest.

Member State National Energy and Climate Plans to 2030 will inevitably shape the European Green Deal,

but it is vital that they are analysed to allow the appropriate degree of convergence, says Łukasz Kohut.

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The capital and operating costs of this change are extreme, numbering in the multi-billion-euro range. Per tonne of steel produced, costs could be from 35 to 100 percent higher. This is why our transition to a carbon-lean future relies so heavily on the right conditions being in place, and why we need a ‘Green Deal for Steel’.

If international trade allows unfairly priced, more CO2-intense steels to be imported, we will simply be exporting our emissions, production, investment and jobs outside the European Union. If the circular economy is not truly circular, we lose valuable raw materials that could throttle CO2 emissions.

"If we succeed in establishing the right set of support measures now, the EU steel industry could reduce emissions by 30 percent by 2030"

If there is no way to sustainably finance our innovation, we cannot deploy the new technologies we will need to succeed. If renewable electricity and hydrogen networks are not rolled out, the steel industry will not have access to the green energy it needs to drastically reduce CO2 emissions during production.

Finally, if there is no market for green steel products, we risk transitioning to a world where Europe is carbon-neutral in name only, and other regions of the world won’t follow us.

However, none of these barriers is insurmountable. A Green Deal on Steel could act as the flagship for the European Green Deal – to make sure that each of the factors that we need are in place.

If we succeed in establishing the right set of support measures now, the EU steel industry could reduce emissions by 30 percent by 2030, with the prize of 95 percent reductions in our carbon footprint within reach. Let’s make that deal today.

About the author

Axel Eggert is Director General of The European Steel Association (EUROFER)

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