A recent shipment of 24 metric tons of Swedish steel could mark the beginning of what the steel industry hopes will be a new era: the cleanup of one of the world’s dirtiest industries.
Major European and American steelmakers, such as ArcelorMittal SA and Cleveland-Cliffs Inc., are stepping up efforts to curb carbon emissions, in hopes of attracting customers and avoiding growing pressure from investors and governments. On Thursday, Sweden’s SSAB AB sent truck manufacturer Volvo AB, which it said was the first commercial shipment of fossil-fuel-free steel in the world.
But progress is slower in the developing world, where most steel is produced, and that means the sector is likely to remain a major emitter for years to come, analysts say. Greening the industry is also expensive and steel used in cars, buildings and appliances is expected to be more expensive.
The challenge facing the steel industry represents the difficulty of decarbonising the economy as a whole, as governments and investors place more emphasis on curbing climate change. Steel generates 7% of global carbon dioxide emissions related to energy consumption, more than any other industrial sector, according to the International Energy Agency. With the forecast for steel demand rising, the IEA says the industry’s emissions will have to be halved by 2050 for the world to meet global climate goals.
“I accept that in the short term this transition will be difficult,” Aditya Mittal, chief executive of ArcelorMittal, said in an interview.