Climate Group’s SteelZero initiative is calling on governments to lead the transition in decarbonising heavy industry, by adopting industry wide standards and procuring lower-emission steel, Kallanish learns.
The initiative’s “Getting to SteelZero: Pathways to decarbonisation for government and industry” report gives policy-based recommendations and sees the public sector as a key enabler of change.
Helen Clarkson, chief executive at Climate Group, says: “This is too big a challenge for any one company or institution to deliver. We need to see collaboration and innovation to create the conditions for a private sector led, government enabled transition.”
Climate Group aims to bring governments together to overcome decarbonisation barriers through its proposed Industrial Decarbonisation Enablement Alliance (IDEA) for heavy industries such as steel.
Effective collaboration can also amplify demand signals that push steelmakers to invest in new technologies. SteelZero argues it is imperative to find new ways to unlock investment, not only in steelmaking facilities, but also in renewable energy, green hydrogen and green ironmaking plants.
One of its recommendations is utilising procurement to specify the use of lower emission steel and incentivise its wider use through changes to regulations and standards. The report notes governments have substantial purchasing power and therefore an opportunity to influence the market directly.
Beyond purchasing power, they can also support industry decarbonisation through investment, policy and regulatory frameworks. These actions can also help enhance the competitiveness of local businesses in the complex global markets for steel, it notes.
Another recommendation is aligning net zero strategies, industrial policy and investment incentives to support steel decarbonisation.
“This is not about protectionism. We all lose if environmental rules become trade barriers,” the report adds.
It also notes that decarbonisation goes beyond building new lower emission steelmaking capacity. It requires vast and supportive infrastructure, which means ensuring that electricity supply and transmission are in place and that green hydrogen is available.
Another focus in the report is the use of data, which remains a major barrier to change, and its role in the adoption of emissions standards. SteelZero says governments should adopt transparent and comparable environmental data standards that give steel buyers clarity and confidence, while noting there is currently no universally agreed definition for green steel.
It notes that businesses are seeking common terminology across the entire value chain with a standardised definition.
The standard should allow for geographical and sectoral variability, while options will vary depending on production location and method, clean energy availability, and the priorities and incentives set by government policy.
SteelZero also notes that for those producing steel from iron ore rather than through recycling existing steel, the urgency and scale of the transition is significantly greater. “We need to work together to find ways to close coal blast furnaces and invest in innovative new steelmaking techniques that can deliver net zero steel to everyone, everywhere,” the report concludes.
Carrie Bone UK
