Climate change and the production of iron and steel
Whether it is future energy and transport systems, protection from the impacts of natural disasters, climate-resilient infrastructure and buildings, or low-carbon manufacturing and agriculture, steel is at the heart of delivering low-carbon solutions and mitigating the effects of climate change.
What is low-carbon steel?
Low-carbon steel is steel that is manufactured using technologies and practices that result in significantly lower GHG emissions than conventional production.
What is low-carbon energy?
worldsteel uses the International Energy Agency (IEA)’s categorisation, which includes renewables, nuclear, and fossil fuels with abatement technologies such as carbon capture, use, and storage (CCUS).
Steel steers transformation
Carbon plays two crucial roles in steelmaking: acting as a reducing agent to remove oxygen and other impurities from iron ore to produce iron, and serving as an integral component of steel, created by combining iron with carbon and small amounts of other elements.
Due to carbon’s key roles in steelmaking, the production of steel remains a carbon and energy intensive activity. Nonetheless, the steel industry is committed to continuing to reduce the carbon footprint from its operations and fully supports the aims of the Paris Agreement.
Once made, steel is 100% and infinitely recyclable without any loss of properties.
There are many decarbonisation pathways for the steel industry. Each company’s transition strategy will depend on local factors such as availability and cost of resources and energy, policy support, and finance options.
Steelmakers are developing and manufacturing the advanced steel products necessary to facilitate the transformation and adaptation of society through zero-energy buildings, low-carbon energy infrastructure, advanced vehicle design, electrification, and more.
Due to its strength, durability and versatility, steel also plays a vital role in adaptation, enhancing climate resilience through infrastructure that protects communities.
As a permanent material, steel is fundamental to the circular economy. It enables more efficient designs, increased reuse, remanufacturing, and recycling, key elements of the circular economy7.
All circular approaches have the potential to prolong steel’s life. Modern steels are stronger, lighter and more durable than ever before. The steel industry collaborates closely with its customers, from design to end-of-life, sharing knowledge to ensure that steel is used as efficiently as possible in every application.
Keeping track of emissions
In 2024, on average, every tonne of steel produced led to the emission of 2.18 tonnes of CO2e (scope 1, 2, and 3). In the same year, 1,886 million tonnes (Mt) of steel were produced, and total emissions from our sector were of the order of 4.1 billion tonnes CO2e (75% of which are direct emissions). These emissions represent 7% – 8% of global anthropogenic GHG emissions.
Ore-based steelmaking produces iron from ore, either in a blast furnace (BF), using coal, or in a direct reduced iron (DRI) furnace, in most cases using natural gas resulting in a lower carbon footprint. The resulting iron is then refined into steel in a basic oxygen furnace (BOF) or an electric arc furnace (EAF) with added scrap.
Scrap-based steelmaking uses electricity to melt scrap in an EAF, often with the addition of pig iron or DRI.
The emission profiles of ore-based and scrap-based steelmaking are very different, with the majority of emissions associated with the production of iron from ore.
