Green steel

Steel is an alloy of iron, carbon and other elements, and is the second-most traded global commodity. Steel will be an important material to support the UK’s transition to net zero GHG emissions, through its use in wind turbines, electric vehicles, and infrastructure. However, iron and steel production in the UK is carbon-intensive, responsible for 14% of industrial GHG emissions and around 2% of total UK emissions. 

The UK has committed to achieving net zero GHG emissions by 2050, with an interim target of reducing industrial emissions by two thirds by 2035. Decarbonisation of steelmaking is therefore necessary for the overall decarbonisation of UK industry. The Climate Change Committee has recommended that steelmaking reaches near-zero emissions by 2035. The UK has not yet piloted any new ‘green’ steelmaking technologies on a large scale, nor set any specific policy framework. 

Short-term strategies to reduce CO₂ emissions from steelmaking involve improving the energy efficiency of existing steelmaking processes and reducing the amount of steel used in manufacturing and construction. However, it is likely that more disruptive technologies will be needed to make larger reductions in CO₂ emissions in the long term. Steelmakers face challenges in deploying these larger-scale technologies, including the cost of investing in new capital, the timing of investment cycles, and expensive operating costs due to high electricity prices. Stakeholders have called for greater support and a clearer policy framework from the Government regarding the production of ‘green steel’. 

Key points: 

• Iron and steelmaking are responsible for around 7% of global CO₂ emissions.  
• GHG emissions from the iron and steelmaking industry need to be significantly reduced if the UK is to meet its net zero targets by 2050.
• Strategies that could be implemented in the short-term include improvements to energy efficiency during steel production and reducing the amount of steel used to make products. 
• The three main technology pathways likely to help UK steelmaking reach net zero are: greater use of electric arc furnaces and recycled (scrap) steel; direct reduced iron using green hydrogen; and using carbon capture, utilisation and storage (CCUS) technology with existing steelmaking infrastructure. 
• Challenges to decarbonising the steel industry include high investment costs for technology, rising electricity prices, and the need for hydrogen and CCUS networks across the UK. 
• Stakeholders have called for a clearer policy framework for UK green steel production. 

Acknowledgements  

POSTnotes are based on literature reviews and interviews with a range of stakeholders and are externally peer reviewed. POST would like to thank interviewees and peer reviewers for kindly giving up their time during the preparation of this briefing, including: 

Members of the POST Board* 

Department for Business, Energy & Industrial Strategy 

Frank Aaskov, UK Steel*  

Pepa Ambrosio Albala, University of Leeds*  

Martyn Atkins, Environmental Audit Committee 

Eoin Bailey, Celsa Steel UK 

Edwin Basson, World Steel  

Claire Davis, University of Warwick*  

Alice Ellison, BEIS* 

Benjamin Fitton, BEIS* 

William Gale, University of Leeds*  

Alice Garvey, University of Leeds*  

Geoffrey Hammond, University of Bath*  

Gari Harris, British Steel 

Suzanna Hinson, Green Finance Institute  

John Hitchcock, Welsh Affairs Committee 

Peter Hogg, Liberty Steel* 

Duncan Leeson, BEIS* 

Katie Lamb, University of Sheffield*  

Zushi Li, University of Warwick*  

Roger Morton, European Metal Recycling*  

Ayesha Mumtaz, BEIS* 

Jonathan Norman, University of Leeds*  

Okechukwu Okorie, University of Exeter  

Andrew Pimm, University of Leeds* 

Elian Pusceddu, Element Energy*  

Ignacio Rabsiun, Element Energy*  

Clare Richardson-Barlow, University of Leeds*  

Alan Scholes, Materials Processing Institute  

Julian Steer, Cardiff University*  

Jesus Talamantes-Silva, Sheffield Forgemasters* 

Verner Viisainen, Green Alliance*  

Peter Warren, British Steel* 

*denotes people and organisations who acted as external reviewers of the briefing.