Steel Industry’s Decarbonisation Efforts to Redefine Supply Chains

SEATTLE (Scrap Monster): According to latest report published by Wood Mackenzie, the acceleration of decarbonisation efforts will result in significant transformation in steel industry. The efforts to abate carbon emissions will see creation of new metallic hubs and will reshape the patterns of steel production and trade patterns across the globe.

The transformation in global steel industry will be driven by electric arc furnace (EAF) technology, rising green feedstock consumption and evolving carbon policies in several countries.

ALSO READ:

EUROFER Calls on EU and US to Address Carbon Intensive Excess Capacity

Steel Sector Prospects Under Threat from Scrap Export Bans

The less carbon-intensive EAF steel production accounts for nearly 28% of global steel output as on today. This is projected to touch 50% by the end of 2050, for which the industry will require an investment of approximately $130 billion.

The transformation to less carbon-intensive steel production will boost demand for direct reduced iron (DRI) and high-grade scrap. The share of these green feedstock is projected to rise from current levels of 36% to 54% by 2050. The shift will see emergence of new production, processing and trading hubs for these feedstock.

The global DRI capacity is expected to double over the next 30 years. The new DRI centres will be located close to low-carbon hydrogen production centres. The Middle East and Australia will see huge increase in number of such projects.