As country commitments to decarbonization and clean transformation to combat climate change increase, $554 billion of carbon-based steel production capacity has been determined to be at risk in the global steel industry.

According to the new report by the Global Energy Monitor think tank, the production capacity of carbon-based steel working with the “blast furnace-basic oxygen furnace” production method being developed in the world increased by 8 percent from 350 million tons in 2021 to 380 million tons in 2022.

While almost all of this new capacity is installed in Asia, China and India are leading the increase in capacity by country.

The global steel industry is among the critical sectors that need to transition to cleaner production methods to reduce climate change-causing emissions, but this transition appears to be progressing very slowly.

CAPACITY OF 347 METRIC TONS WILL BE CANCELED

With coal-driven production capacity increases in the steel sector contradicting countries’ decarbonization commitments, there is currently a risk that $554 billion of assets in the sector in question sit idle.

According to the International Energy Agency’s 2050 net-zero emissions scenario, the total share of electric arc furnace capacity in the steel industry should reach 53 percent by 2050.

This means that 347 metric tons of coal-fired capacity will have to be retired or discontinued and 610 metric tons of electric arc furnace capacity must be added to the existing fleet.

THEY CAN DOWNLOAD BILLIONS OF DOLLARS

According to Global Energy Monitor’s Global Steel Facilities Tracker, there are 731 million tonnes of annual steel production capacity currently under development in the world, with 52% capacity coal-based and 39% electric arc furnace-based.

Global Energy Monitor’s heavy industry program manager Caitlin Swalec, in her assessment of the data, stated that steel producers and consumers should accelerate their steps towards decarbonisation plans: “The process of moving away from coal-based steel production continues, but it is progressing very slowly. Developers building coal-fired capacity now risk billions of dollars in future losses.” she used the phrases. (AA)