The European Commission has embarked upon an ambitious plan to turn the continent carbon-neutral by 2050—a process already underway in its steel industry. But in targeting 95pc reductions through the commission’s Green Deal, the cost of producing steel would likely increase by at least 35pc.
The endeavour to reduce CO2 emissions will require 400 TWh of electricity—234TWh alone will be needed to produce 5.5bn mt of hydrogen—and the steel could cost 35-100pc more to produce than it does using today’s highly optimized methods, thus necessitating a firm guarantee that such a market even exists.
According to Axel Eggert, director general of the European Steel Association, it is imperative to create markets for carbon-neutral products, which he recommends doing by developing a regulatory framework. Otherwise supplanting coking coal with hydrogen, which is vastly more expensive, will not be feasible in the face of low-cost, high-CO2 steel imports.
Such an undertaking would require what Eggert calls a “border adjustment,” which would incentivize other EU steel producers to similarly lower their steel’s carbon contents. Additionally, Eggert noted that with all the right conditions in place, the first industrial-scale demonstrators of the low-carbon technologies could appear by 2025.