Opportunities and roadblocks in the decarbonisation of the global steel sector: A demand and production modelling approach
Kimon Keramidas, Silvana Mima, Adrien Bidaud
Abstract
• We present a steel demand and production module within a global energy system model. • Global steel demand projected to increase but at decelerating growth. • Climate policies augment steel demand but could be compensated by efficiency measures. • Increased recycling and strong electrification are key for decreasing emissions. • Hydrogen provides only part of emissions mitigation behind carbon capture and biomass. The steel sector represents a growing share of global carbon dioxide (CO 2 ) emissions and is perceived as a hard-to-abate sector in the drive towards economy-wide decarbonisation. We present a model detailing steel demand and multiple steel production pathways within a larger global multi-regional energy system simulation model, projecting material, energy and emissions flows to 2100. We examine decarbonisation levels and options under different assumptions on climate policy, technologies and steel demand patterns, and study low-carbon options in the production of hydrogen as a steel decarbonisation vector. Global steel demand increases at a decelerated pace compared to the past two decades (+65 % in 2050 compared to 2020), driven by substantial increases in the underlying socio-economic conditions. Climate policies lead to a limited positive feedback effect on steel demand (+21 % in 2050) due a faster equipment turnover and higher electrification, which could be overcompensated by energy saving and material efficiency measures. Increased recycling and strong electrification (up to 63 % of production in 2050) are projected as key levers towards decreasing emissions, made possible thanks to the increasing availability of steel scrap. Strong climate policies would be needed to push the steel sector to decarbonise fully, with electrification, carbon capture, biomass and hydrogen all contributing. Carbon capture would be necessary to reach net-zero emissions in the second half of the century.