Just stop coal, SteelWatch urges steel industry bigwigs

The message was clear: it is time to 'sunset' the use of coal in steelmaking and for the industry to clean up its act fast.

SteelWatch claims it is here to bring climate urgency to the steel industry, which it believes is totally off-track for a livable planet. The watchdog’s director, Caroline Ashley, remarked commented, "The problem is coal: coal-based production of steel drives emissions and pollution. Steel will be an essential part of a thriving zero emissions economy, but ambition and action are needed now, not in 2049".

SteelWatch has published its first report Sunsetting Coal in Steel in which it calls out steel as the sector with fastest growing emissions, which could pose a risk for planetary stability. The steel sector’s contribution – at least 7% of global emissions – is equivalent to the annual emissions of India. It is believed that 90% of this comes from coal-based production of steel and that a 'business-as-usual' approach will gobble up almost one quarter of the world’s total carbon budget by 2050.

SteelWatch says that decision makers need to take rapid action to decarbonise and calls for a firm red line on coal:

• No investment in any new or relined coal-based blast furnace facilities in OECD countries or by OECD based companies, from today.
• No investment in relining existing or building new coal-based blast furnace facilities that go on-line from January 2028, in emerging economies.

Speaking at the press launch in New York, Hilary Lewis, director of Washington DC-based Industrious Labs, commented: “We can do better than coal-based steel for the sake of workers, front line communities, and the climate,” says Hilary Lewis, Industrious Labs’ Steel Director. “Modernising steel into a fossil-free industry can grow jobs and reduce both health and climate-harming pollution. With significant federal funding available from the Inflation Reduction Act, the US is well positioned to lead the transformation.”

Industrious Labs' mission is to decarbonize heavy industry by 2045 by cleaning up the processes we use to make steel, aluminium and other materials and advancing a circular economy. The organisation partners
with foundations and advocates to develop campaign strategies, support the execution of campaigns, and stand up diverse coalitions to tackle industrial sectors like the steel industry.

The SteelWatch report points out that in order for the industry to align with a 1.5C pathway, a reduction of approximately 1.8 gigatons of CO₂ emissions is needed.

According to SteelWatch, roughly 400 steel facilities rely primarily on coal-based blast furnaces globally, 71% of them will have at least one or more furnaces due for refurbishment or ‘relining’ (an investment that extends the production life 15-20 years) in the next seven years, which presents the only opportunity to reshape the steel industry without coal and transition toward a modern emissions free future.

“Now that SteelWatch has joined the climate fight, the steel industry finally has a formidable watchdog. This debut report is the first to call for a phase out of coal use in steel production, a bold but necessary step. Right now, steel companies are trying to define what ‘green steel’ should be independently of what communities and the planet need,” commented Leanne Govindsamy of the Centre for Environmental Rights (CER) in South Africa. “Here in South Africa we have been calling out ArcelorMittal’s harmful impacts locally and the slower pace of decarbonisation plans for its facilities in the global South. It’s past time for ArcelorMittal and other steel companies to step up and act locally and globally.” CER is one of many global NGOs SteelWatch works with.

“SteelWatch has arrived just in time to ensure the next few years of steel industry investments are not locking in climate emissions but instead setting a path toward alignment with a 1.5C pathway for the sector by 2030,” said Johanna Lehne of E3G.

SteelWatch claims that its report builds upon a clear consensus from institutions like the IEA, think tanks like IDDRI, and NGOs like E3G which have made clear through different analysis that for steel to get on track for a 1.5C climate-aligned pathway, immediate action and a rapid shift away from coal is necessary. Earlier this month, Agora Industry, a major think tank in Europe released a report calling for an 32% reduction in net steel emissions by 2030 (based on a 2019 baseline) and forecasting that a total end to coal in steelmaking could be possible between 2043-2045 if solutions like gigawatts of renewable electricity powering green hydrogen infrastructure can move fast enough.