We’ve spoken before about government investment and new technologies that are driving the development of the steel industry towards a greener future. However, the role of steel within the climate crisis cannot be stressed enough. If managed correctly, steel will be vital to the green revolution, but the industry needs help.
The significance of steel is the sheer size of the market. Interestingly, the global steel market is worth $2.5 trillion dollars. Yes, trillion. You read that correctly. Therefore, as decarbonisation and other trends continue to become a reality for the future of the market, the way in which the industry reacts is important.
Many people consider hydrogen steelmaking to be the future of the industry. However, this transition will rely on government investment in order to ensure that the correct infrastructure is in place to accommodate this change.
What is undisputable is that the steel industry will never stand still. In order to keep up the race with changing technology and new developments, the industry will constantly change and adapt. Therefore, the market will naturally move towards a more sustainable future in order to combat the climate crisis and support net zero targets.
With western governments continuing to invest in renewable energy and relevant infrastructure, we are starting to enter a cycle where demand for metals will be even stronger. Not just in the emerging east, but once again in the developed west.
However, ultimately, there is a wider lesson to be learnt from history’s past mistakes. In order to decarbonise the global market and make the transition to net zero for good, abandoning old industries and punishing them with things like carbon taxes will never work. A global effort between different sectors is needed to adopt new technologies and move towards a greener future.
This isn’t to say great progress hasn’t already been made. China, one of the world’s leading steel producers, has already began to explore and test different methodologies. These include hydrogen direct reduced iron, smelting reduction with hydrogen and the use of carbon capture techniques. The hope is China could see a decrease in fossil-fuel based steel production from 90% to as little as 20% by 2050.
The significance of the transition is the current cost associated with greener technologies. For example, on average, creating zero-carbon steel has a 40%-100% premium over traditional production methods. This reaffirms the need for investment in new infrastructure in order to reduce these premiums.
Overall, steel is key to the future of the green revolution. Wind turbines, electric cars and almost every product within our green future requires steel. Therefore, the need for transition is urgent. However, with effective industrial change, steel can become the catalyst for sustainable economic and environmental development across the globe.