Forging a Sustainable Future: Decarbonising Global Steel for Net Zero
- Sofiia Taran
- 1 day ago
- 4 min read
Steel sits at the heart of the modern economy. It underpins renewable energy infrastructure, transport systems, housing, electricity grids and manufacturing. Yet it is also responsible for around 7–8% of global CO₂ emissions, making it one of the most emissions-intensive sectors in the net zero transition.
This challenge was the focus of the Foresight webinar Forging a Sustainable Future: Decarbonising Global Steel for Net Zero, which brought together voices from across the global green steel ecosystem to examine how steel can be decarbonised without deindustrialisation and what governments must do to make that transition viable.
There is no net zero economy without green steel. Achieving it, however, will require difficult choices, coordinated policy, and sustained market leadership.
Steel is an essential part of the UK’s energy system and its energy transition. Offshore wind turbines, for example, can be up to 85% steel. Energy networks, railways, data centres and housing all depend on it. Demand for steel is therefore not expected to disappear; in many cases, it will increase as countries invest in clean infrastructure and economic renewal.
At the same time, steelmaking remains one of the hardest sectors to abate. Traditional production relies on coal-intensive blast furnaces and operates in highly competitive global markets where producers face constant pressure on costs and margins. This creates a structural risk of carbon leakage, where emissions are reduced in one country only to increase elsewhere.
While there is no single solution, the webinar highlighted several key routes that are already being deployed or developed globally:
Electrification, particularly through electric arc furnaces (EAFs) using scrap and low-carbon electricity
Carbon capture, offering a pathway to decarbonise existing blast furnace assets while maintaining primary steelmaking capacity
Hydrogen-based production, replacing coal with hydrogen in ironmaking as a longer-term solution
Energy efficiency and fuel switching, delivering immediate emissions reductions across steel plants
Together, these approaches form a toolkit, as what works in one country or region may not work in another, depending on energy systems, infrastructure and cost.
EAFs, which melt scrap using electricity, are already a proven and scalable route to reducing emissions—particularly where low-carbon power is available.
In the UK context, electrification represents the fastest route to large-scale emissions reductions. However, speakers warned that electricity prices remain a major barrier to competitiveness.
"All routes to decarbonisation require more electricity. If we don’t address energy prices, we will struggle to attract investment—regardless of the technology” - Frank Aaskov, UKSteel
Hydrogen-based direct reduced iron (DRI) is widely seen as the long-term solution for near-zero steelmaking. However, speakers were clear-eyed about the challenges: cost, infrastructure, and the availability of genuinely low-carbon hydrogen.
“Hydrogen is not the issue technologically. The challenge is scale, cost, and carbon intensity. We must focus on real emissions outcomes, not colour labels.” - Joachim von Scheele, Linde
Clear and stable policy frameworks are essential to unlock investment. High energy costs, regulatory uncertainty and exposure to cheaper high-emissions imports continue to undermine business confidence in many markets.
At the same time, demand for low-emission steel is becoming a powerful driver of change. Major buyers—particularly in construction, manufacturing and transport—are increasingly seeking steel with a lower carbon footprint and greater transparency. Public procurement was highlighted as a particularly important lever, with governments able to send strong market signals through infrastructure spending and embodied carbon standards.
Decarbonising steel is therefore about more than reducing emissions. It raises fundamental questions about industrial strategy, economic resilience and energy security.
As the discussion made clear, countries now face a strategic choice: whether to actively support the transition to low-carbon steelmaking at home, or risk becoming increasingly dependent on imported materials produced under weaker climate standards. The transition will not be easy, nor will it be cheap. But the cost of inaction—lost competitiveness, carbon leakage and delayed progress towards net zero—is far higher.
In the UK, this challenge is particularly acute. The Net Zero by 2050 target requires all steel production to eliminate or capture its emissions within the next 25 years. This ambition has been reinforced by the Committee on Climate Change, which has recommended a target of near-net-zero emissions from ore-based steelmaking sites by 2035.
Political momentum is also building. The Government has committed to a £3 billion, ten-year investment package to support the decarbonisation of the steel industry, alongside a clear principle that “decarbonisation must never mean deindustrialisation”. Central to this pledge is a commitment to lower industrial electricity prices, long identified as a major barrier to competitiveness.
“Steel is inherently political. No other industry would receive this level of support if it wasn’t seen as strategically essential” - Andrew Forth, The Climate Group
From an industry perspective, what is now required is a coherent industrial strategy, built on partnership between government, industry and trade unions. This is essential to provide long-term certainty, attract investment and secure a future for steelmaking in the UK.
The webinar made clear that the technologies to reduce emissions already exist, and viable pathways are emerging. What is now required is political clarity and policy coherence: competitive energy prices, long-term investment certainty, and an industrial strategy that aligns climate ambition with economic resilience.
Join us in Liverpool on 4-5th of February to learn more about the UK Industrial Strategy and Energy Transition at The Foresight Event 2026.
