Global Energy Monitor Sounds Alarm on Slow Steel Decarbonization

Global Energy Monitor’s Pedal to the Metal 2025 report warns that steelmakers must act fast to cut emissions and scale green technology.

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Global steel demand is projected to reach 2.2–2.3 billion tonnes by 2030, amplifying the urgency for the industry to align with net-zero commitments. Yet, Global Energy Monitor’s Pedal to the Metal report highlights significant roadblocks. While electric arc furnace (EAF) capacity has grown by 11% since 2020, with an additional 24% increase projected by 2030, carbon-intensive blast furnace-basic oxygen furnace (BF-BOF) technology remains deeply entrenched. Over the past five years, 259 blast furnace relinings have extended 372 million tonnes per annum (mtpa) of coal-based production, prolonging emissions lock-in for decades.

The regional dynamics underscore the uneven pace of transition. China dominates global steel production, holding 48% of capacity, yet its expansion has slowed, with India now responsible for 40% of global steel capacity growth. India’s rapid development comes at a climate cost, as 57% of its new steel capacity remains coal-based, resulting in 20–25% higher CO₂ emissions per tonne compared to China. Despite gains in lower-emission technologies, only 4% of global iron ore supply meets the grade required for direct reduced iron (DRI)-based green steel, posing supply chain challenges.

The Pedal to the Metal report outlines urgent recommendations. Steelmakers must halt new blast furnace developments and accelerate the transition to EAF-based production, supported by stronger policy frameworks, corporate accountability, and investments in hydrogen infrastructure. With only 20% of operating or planned DRI capacity announcing a switch to hydrogen, the industry risks falling short of net-zero targets. Policymakers must act decisively, ensuring carbon pricing mechanisms, incentives for scrap recycling, and strategic iron ore sourcing drive meaningful progress.

If steelmakers fail to adopt transformative change, they will risk locking in emissions beyond 2050. The industry stands at a crossroads—will it take decisive action, or continue reinforcing the status quo?

Environment + Energy Leader