Climate Action

4 breakthrough actions to decarbonize steelmaking

Steel is critical for many technologies that will deliver decarbonization.

Steel is critical for many technologies that will deliver decarbonization. Image: Unsplash.

Charles Pacini
Manager, Transforming Industrial Ecosystems, Industry Clusters, World Economic Forum Geneva
Our Impact
What's the World Economic Forum doing to accelerate action on Climate Action?
The Big Picture
Explore and monitor how Engineering and Construction is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:


  • Steel is a critical material for technologies that will deliver decarbonization.
  • However, steel production accounts for 7% of global greenhouse gas emissions.
  • The First Movers Coalition (FMC) is committed to achieving net-zero emissions by 2050.

Coal is an essential component in steel production which makes the iron and steel sector responsible for about 7% of global greenhouse gas (GHG) emissions. As the power sector decarbonizes, steelmaking is expected to become the single largest source of industrial emissions.

Steel is the world’s most important engineering and construction material, critical for many technologies that will deliver decarbonization, such as wind turbines, electric vehicles, and advanced manufacturing processes.

There are many levers for steel decarbonization, including the electrification of heat generation, efficiency increases, and utilization of scrap steel. However, to deeply decarbonize and reach net-zero, further steps are needed to address the emissions associated with coal’s role as a reducing agent in ironmaking. Breakthrough technologies that can accomplish this include hydrogen direct reduction (to replace coal), carbon capture use and storage, and electrolysis-based production processes.

Have you read?

Since COP26, 25 top global corporations have joined the FMC steel sector and set a target that at least 10% of their annual steel procurement volumes by 2030 meet the following criteria:

  • Crude steel from breakthrough technology production facilities. Per IEA guidance, the steel should emit <0.4 (0% scrap inputs) to <0.05 t (100% scrap inputs) of CO2 e per tonne of crude steel produced. The analytical boundary for emissions is cradle-to-gate, in alignment with IEA guidance in the report Achieving Net Zero Heavy Industry Sectors in G7 Members.

The First Movers Coalition – a coalition of companies using their purchasing power to create early markets for innovative clean technologies – have developed a range of solutions to tackle steel emissions. Here are a few examples of what top leaders in the energy, automotive and construction sectors have put in place so far.

Energy sector

Wind turbine towers consist of ~80% steel plates and steel can also be used in the towers’ foundations, meaning a large offshore turbine can use more than 3,000 tonnes of steel.

Low-emissions steel turbine towers

Ørsted, the world’s largest offshore wind developer, is establishing partnerships across the supply chain to enable investments in low-emissions technologies. The company has committed to procuring 25% low-emissions steel turbine towers for all joint offshore projects with turbine manufacturer Vestas. Towers will be made from scrap steel manufactured with on-site renewable electricity, reducing carbon emissions from heavy steel plates by up to 70%.

The company has also partnered with Dillinger, long-term supplier of heavy plate steel for offshore wind turbine foundations, to develop for the first time ever steel for foundations with a lower carbon footprint.

Virginia Dundas, Ørsted’s Director of Climate & Nature, says: “By committing to offtake lower emissions solutions, we give our partners the certainty they need to invest in them. In this way, by working together with our suppliers, we can lead our industry towards net-zero.”

Large-scale hydrogen storage

HYBRIT (Hydrogen Breakthrough Ironmaking Technology) – a collaboration between steel producer SSAB, mining company LKAB and power producer Vattenfall – started in 2017 and is centred on utilising zero-carbon electricity and hydrogen to eliminate emissions from the energy usage and processes of steelmaking. In July 2021, SSAB rolled the first steel produced using HYBRIT technology.

In September 2022, HYBRIT announced the successful launch of a hydrogen storage facility. Large-scale hydrogen storage has the potential to significantly reduce the variable cost of hydrogen, a prerequisite for producing fossil-free steel. Large-scale hydrogen storage makes it possible to adapt electricity consumption in a system of varying availability and prices and at the same time supply the industry with hydrogen more stably and cost effectively. A recent test showed that the variable cost of hydrogen production can be significantly reduced, by between 25-40% with hydrogen storage.

“These excellent results are very important because hydrogen from fossil-free electricity is one of the keys to transitioning the industry,” says Annika Ramsköld, Vattenfall Chief Sustainability Officer.

Automotive sector

While the exact amount of steel used in a car or truck will vary by make and model, the American Iron and Steel Institute reports that the average vehicle is made of 54% steel by weight.

Fossil-free steel

On average, 1.85 tonnes of CO2 are emitted for every tonne of steel produced, so it is becoming increasingly important to look at the materials that make up commercial vehicles. In 2021, Volvo Group introduced the world’s first prototype vehicle made from fossil-free steel, together with SSAB. Fossil-free steel replaces coal in the iron ore reduction process with hydrogen, emitting water instead of carbon dioxide. Since 2022, the company is accelerating the market introduction of fossil-free steel from the HYBRIT pilot plant, owned by SSAB, LKAB and Vattenfall. Volvo not only handed over an articulated hauler made from fossil-free steel to a customer for use in their operations, but also implemented it into series production of the parts within electric trucks – both world firsts.

To secure the amount of fossil free steel and near-zero emission steel needed, Volvo Group is expanding the collaboration with other partners such as H2 Green Steel. H2 Green Steel will produce green steel, reducing CO₂ emissions with up to 95% compared to traditional steelmaking.

Andrea Fuder, Chief Purchasing Officer, Volvo Group, says: "This is fast-tracked innovation at its very smartest, and a testament to the sort of well-orchestrated collaboration FMC is calling for."

In 2022, Scania introduced very ambitious supply chain decarbonization targets which are now turned into requirements. By 2030, the company targets 100% green purchases of steel, batteries, aluminium and cast iron for its European operations. These four hotspots constitute around 80% of carbon emissions arising from Scania’s production materials. Scania’s definition of “green” requires eliminating the main sources of emissions by utilising new technologies, green electricity and/or recycled material. In flat steel production, replacing coal with green hydrogen is key.

This spring, Scania placed its first order of green steel from H2 Green Steel. Mid-November, a target was announced together with SSAB to decarbonize all current steel deliveries in 2030. Green steel supplies are targeted to start in 2026.

“Implementing green purchasing requirements is both a question of making sustainable transport a reality and ensuring access to low-carbon material in a rapidly increasing competition”, says Scania CEO Christian Levin.


How is the World Economic Forum facilitating the transition to clean energy?

Construction sector

Construction is one of the most important steel-using industries, accounting for more than 50% of world steel demand. Materials used in the construction of buildings, which includes steel, account for around 9% of overall global energy-related CO2 emissions.

Greener option

New technologies are nothing without adoption, and solutions like fossil free steel must be integrated into new projects. In the MENA region, Consolidated Contractors Group (CCC) is targeting the integration of 10% near-zero emissions steel in its civil and mechanical projects by 2030. This commitment involves replacing traditional steel products with steel from local manufacturers applying eco-friendlier power sources and production processes that would lead to substantial reduction in carbon emissions by 2030. This commitment is also being applied to newly started projects with CCC, as teams are checking the technical and commercial feasibility for replacing 10% of their required steel quantity by near-zero emissions steel, produced with reduced carbon emissions by local manufacturers.

Saji Khoury, Business Development Manager, Consolidated Contractors Group says: “CCC is championing the decarbonization of steel in the MENA region.”

Looking ahead

The transition to net-zero will have significant resource implications, with large increases in required hydrogen and electricity inputs, but a stark decline in coal.

The key action this decade is to expand the pipeline of near-zero emissions steelmaking projects. To accomplish this, policy-makers need to create a level playing field and support a first wave of projects, industry needs to ramp up supply of and demand for near-zero emissions steel, and financiers must utilize new funding and de-risking structures to better direct capital towards near-zero projects.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Climate transition plans: CEOs on how to deliver more than just net-zero

Pim Valdre and Nicolas Salomon

June 19, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum