To meet 2050 climate goals, the global iron and steel industry will require $1.4-trillion of investment across the value chain, from mining to steelmaking, estimates research and consultancy firm Wood Mackenzie (WoodMac).
A research report, titled ‘Pedal to the metal: iron and steel’s $1.4-trillion shot at decarbonisation’, published by WoodMac states that iron and steel emit 3.4-billion tonnes of carbon a year combined, equal to 7% of global emissions. This while steel demand growth is not slowing down, and is estimated to reach 2.2-billion tonnes a year by 2050 – 15% higher than the demand for steel in 2021.
“Decarbonising the steel industry is a staggeringly big task. To meet WoodMac’s 1.5 ˚C accelerated energy transition scenario by 2050, steel emissions must reduce by 90% from current levels. Business as usual is no longer sustainable,” says research director and report author Malan Wu.
The firm’s analysis shows that between $800-billion and $900-billion will be needed to abate carbon from existing steelmaking infrastructure, such as setting up new hydrogen-based direct reduced iron (DRI) and electric arc furnaces.