A recent shipment of 24 metric tons of Swedish steel could mark the beginning of what the steel industry hopes is a new era: the cleanup of one of the world’s dirtiest industries.
Big steelmakers in Europe and the U.S., like ArcelorMittal SA and Cleveland-Cliffs Inc., are intensifying efforts to curb carbon emissions, hoping to woo customers and fend off growing pressure from investors and governments. On Thursday, Sweden’s SSAB AB shipped what it said was the world’s first commercial shipment of steel made without fossil fuels to truck maker Volvo AB.
But progress is slower in the developing world, where the majority of steel is made, and that means the sector will likely remain a big emitter for years to come, analysts say. Greening the industry is also costly, and that is expected to make the steel used in cars, buildings and householder appliances more expensive.
The challenge facing the steel industry epitomizes the difficulty of decarbonizing the wider economy, as governments and investors put greater 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 demand for steel projected to rise, the IEA says the industry’s emissions need to halve by 2050 for the world to hit global climate goals.
“I do accept that in the short term, this transition is difficult,” ArcelorMittal Chief Executive Aditya Mittal said in an interview.
