Efficiency stagnation in global steel production urges joint supply- and demand-side mitigation efforts

Steel, a crucial material in modern society, faces a significant challenge in achieving climate-safe production due to its energy and carbon intensity. The Paris Agreement necessitates net-zero emissions by 2050, a goal difficult to achieve for steel production. This difficulty stems from projected increases in global demand to support growing populations and affluence, the essential role of carbon-based resources in steelmaking, and the carbon lock-in effect of long-lived production facilities. Previous decarbonization strategies focusing on production efficiency improvements, including energy efficiency measures, technological innovation, and fuel switching, have been questioned. This study analyzes the overall progress of the global steel industry in GHG mitigation, addressing the gap in understanding the interplay between material flows and supply-side technical efficiency. By integrating dynamic material flow analysis (MFA) and life cycle assessment (LCA), this research aims to provide a comprehensive assessment of global steel production's environmental impact and identify effective strategies for future GHG emission mitigation.

Prior research has largely focused on specific steel production technologies, overlooking the interplay between material flows and supply-side efficiency. Studies often concentrated on particular aspects, such as specific technologies or regional analyses, without a comprehensive global perspective. Existing investigations have highlighted the need for improved energy efficiency and technological innovations to reduce GHG intensity, but the overall effectiveness of these efforts remains unclear. There is a lack of understanding regarding the extent of historical progress, the roles of production volume growth versus efficiency improvements, and the regional disparities in decarbonization efforts. This paper bridges this gap through a comprehensive assessment of the global steel production system across its entire life cycle, allowing for a more holistic analysis.

This study integrated dynamic material flow analysis (MFA) with life cycle assessment (LCA) to quantify annual production, efficiency, and GHG emissions from global steel production between 1900 and 2015. Nineteen dominant steel production processes were included. The methodology involved five steps: 1. **Production Technologies Investigation:** A literature review identified key technologies and their historical development. 2. **Material Flow Analysis (MFA):** MFA quantified yearly production of each technology and tracked dynamic material stocks and flows throughout the steel life cycle (mining, preparation, ironmaking, steelmaking, finishing, manufacturing, in-use, end-of-life). 3. **Emission Quantification:** Direct and indirect GHG emissions were quantified for each technology, using data from Ecoinvent v.3 and other sources. Emissions were categorized into scopes 1, 2, and 3. Global average emissions intensities were assumed due to limited regional datasets. 4. **Decomposition Analysis:** The Logarithmic Mean Divisia Index (LMDI) method was used to decompose emission changes into volume and intensity effects. 5. **Uncertainty Analysis:** The Pedigree-matrix approach and Monte-Carlo simulation were employed to quantify uncertainties arising from data quality and model assumptions. The model was validated by comparing simulated historical steel production with historical statistics and comparing GHG intensities with previous estimates from the literature. A regional retrospective and prospective analysis (1995-2050) was performed, dividing global steel flows into eight regions using data from World Steel Association yearbooks and IEA projections (Stated Policies Scenario and Sustainable Development Scenario). Finally, a scenario analysis explored various efficiency improvement pathways to assess their potential to avoid exceeding the 1.5°C carbon budget for steel production.

Global steel production from 1900 to 2015 emitted approximately 147 Gt CO2-eq, representing roughly 9% of global GHG emissions during this period. Ironmaking contributed the largest share (around 50%). Despite a 67% reduction in GHG emissions intensity since 1900, this was completely offset by an exponential increase in steel production volume, leading to a net 17-fold increase in annual emissions. The GHG intensity of the global steel industry stagnated in the 15–20 years before 2015. Regional improvements in technology efficiencies were offset by the growth of steel production in emerging countries (like China and India) with lower process efficiency. The share of secondary production (using scrap) relative to primary production decreased from 30% in 1995 to 21% in 2015. Analysis of future scenarios showed that continued growth in steel demand, particularly in emerging economies, would likely exhaust the 1.5°C carbon budget for steel production well before 2050. Meeting the 1.5°C target would require either a radical and immediate reduction in emissions intensity or a significant decrease in steel demand. Breakthrough low-carbon technologies (hydrogen-based, electrolysis-based, CCUS, biomass-based, etc.) offer the potential for deep decarbonization, but their development and implementation are currently lagging.

The study's findings highlight the insufficiency of relying solely on supply-side efficiency improvements (technological innovation) to achieve significant GHG emission reductions in the steel industry. The dramatic increase in steel production, especially in emerging economies, has completely negated gains from process efficiency improvements, emphasizing the crucial role of demand-side strategies. The stagnation of GHG intensity at the global level underscores the urgency of adopting a comprehensive approach integrating both supply- and demand-side mitigation measures. Meeting the ambitious goals of the Paris Agreement necessitates a drastic shift toward low-carbon technologies, coupled with strategies to reduce steel demand and optimize material flows. The region-specific challenges and opportunities outlined in the study suggest a tailored approach, focusing on technology deployment in emerging markets, capacity optimization, closing the steel cycle in developed nations, and incorporating material efficiency measures.

This study demonstrates the critical interdependence between technological advancements and material flow dynamics in achieving steel industry decarbonization. Regional efficiency improvements have been insufficient to counteract production growth, resulting in stagnant global GHG intensity. To meet the 1.5°C target, ambitious roadmaps combining supply-side (low-carbon technologies) and demand-side (reduced demand, material efficiency) strategies are essential. These strategies need to address both technological innovation and its implementation alongside material flow management, considering regional variations and global cooperation.

The study's reliance on global average emissions intensities for each technology might not fully capture regional variations in carbon footprints. The analysis assumes a relatively stable technology mix within each region and does not fully account for the complexities of international steel trade flows. Future studies might refine the analysis by incorporating more granular regional data and explicitly modeling interregional steel trade to provide a more precise assessment.