Today the Carbon Disclosure Project (CDP) published its report “Nerves of steel” that analyses the performance of steel companies around the world in relation to this transformation and innovation challenge, highlighting company performance across a range of emissions and water-related metrics, which in aggregate could have a material impact on company performance.
CDP’s in depth analysis, at corporation level, brings valuable insights into decarbonisation strategies of these largest steel companies. The report brings a stark warning. The current investment, R&D, governance and carbon pricing regimes are highly inadequate when compared to the mitigation challenge ahead. The silver lining is that some of the top-performing steel companies in the CDP ranking show the possible direction and actions required for sectoral low-carbon transition. This includes the investment in R&D and development of low-carbon breakthrough technologies but also the increased use of electric arc furnaces, linked to increased circularity of steel products.
These findings are in line with other recent studies. In “A bright future for UK steel” Cambridge professor Julian M. Allwood argued a high-tech and cost-effective transition towards re- and up-cycling high quality steel. The report “The Final Frontier: decarbonising Europe’s energy intensive industries” by VUB researchers Wyns and Axelson confirms the technological potential of deep emission reductions in steel production on three levels (process, product and business model innovations). Both reports show that the industry cannot make this transition on its own and therefore call for urgent government action under the form of a dedicated industrial vision, innovation strategy and transition support.
The findings of CDP together with these broader findings show that the catalysing impulse of government intervention on corporate strategies and investments will be essential to achieve deep decarbonisation in the steel sector by mid century.