Steel Climate Impact
An International Benchmarking of Energy and CO2 Intensities
Author: Ali Hasanbeigi
The iron and steel industry accounts for around 7% of global greenhouse gas (GHG) emissions and 11% of global carbon dioxide (CO2) emissions. Global steel production has more than doubled between 2000 and 2020. China accounted for 53% of global steel production in 2020. Under the current policy and technology regime, the energy use and GHG emissions of the steel industry is likely to continue increasing because the increased demand for steel, particularly in developing countries, is outpacing the incremental decreases in the energy and CO2 emissions intensity of steel production happening.
International benchmarking of energy intensity and CO2 emissions intensity can provide a comparison point against which a company or industry’s performance can be measured to that of the same type of company or industry in other countries. Benchmarking can also be used for assessing the energy and emissions improvement potential that could be achieved by the implementation of energy efficiency or CO2 reduction measures. Also, on a national level, policy makers can use benchmarking to prioritize energy saving and decarbonization options and to design policies to reduce energy and GHG emissions.
In this study we conducted a benchmarking analysis for energy and CO2 emissions intensities of the steel industry among the largest steel-producing countries. Because of the difference in the composition of the steel industry across countries and the variation in the share of electric arc furnace (EAF) steel production, a single intensity value for the overall steel industry is not a good indicator of efficiency of the steel industry in a country. Therefore, in addition to calculating CO2 intensities for the entire steel industry, we also calculated separately the CO2 intensities associated with the EAF and blast furnace–basic oxygen furnace (BF-BOF) production routes in each country.
Our results show that when looking at the entire steel industry, Italy, U.S., and Turkey have the lowest and Ukraine, India, and China have the highest CO2 emissions intensities among the countries/region studied. Among several reasons, this is primarily because of a significantly higher share of EAF steel production in total steel production in Italy, U.S., and Turkey.
Some key factors that could explain why the steel industry’s energy and CO2 emissions intensity values differ among the countries are: the share of EAF steel in total steel production, the fuel mix in the iron and steel industry, the electricity grid CO2 emissions factor, the type of feedstocks for BF-BOF and EAF, the level of penetration of energy-efficient technologies, the steel product mix in each country, the age of steel manufacturing facilities in each country, the capacity utilization, environmental regulations, cost of energy and raw materials, and the boundary definition for the steel industry. These are discussed further in the report.
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