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Emerging green steel markets surrounding the EU emissions trading system and carbon border adjustment mechanism

Johnson, Constantin LU ; Åhman, Max LU orcid ; Nilsson, Lars J LU orcid and Li, Zhenxi LU (2025) In Nat. Commun. 16(9087).
Abstract
The global steel industry accounts for 8–10 % of global CO2 emissions and requires deep decarbonisation for achieving the targets set in the Paris Agreement. However, no low-emission primary steel production technology has yet been commercially feasible or deployed. Through analysing revisions and additions of European Union climate policy, we show that green hydrogen-based steelmaking in competitive locations achieves cost-competitiveness on the European market starting 2026. If the deployment of competitive low-emission steelmaking is insufficient, we show that the European steel industry loses competitiveness vis-à-vis countries with access to low-cost renewable energy. Therefore, we assess the options for the European steel industry to... (More)
The global steel industry accounts for 8–10 % of global CO2 emissions and requires deep decarbonisation for achieving the targets set in the Paris Agreement. However, no low-emission primary steel production technology has yet been commercially feasible or deployed. Through analysing revisions and additions of European Union climate policy, we show that green hydrogen-based steelmaking in competitive locations achieves cost-competitiveness on the European market starting 2026. If the deployment of competitive low-emission steelmaking is insufficient, we show that the European steel industry loses competitiveness vis-à-vis countries with access to low-cost renewable energy. Therefore, we assess the options for the European steel industry to relocate the energy-intensive ironmaking step and trade Hot Briquetted Iron for rapid deep decarbonisation of the European steel industry. Lastly, we discuss complementing policy options to enhance the Carbon Border Adjustment Mechanism’s strategic value through European Union-lead global climate cooperation and the possibility of sparking an international decarbonisation race. (Less)
Abstract (Swedish)
The global steel industry accounts for 8–10 % of global CO2 emissions and requires deep decarbonisation for achieving the targets set in the Paris Agreement. However, no low-emission primary steel production technology has yet been commercially feasible or deployed. Through analysing revisions and additions of European Union climate policy, we show that green hydrogen-based steelmaking in competitive locations achieves cost-competitiveness on the European market starting 2026. If the deployment of competitive low-emission steelmaking is insufficient, we show that the European steel industry loses competitiveness vis-à-vis countries with access to low-cost renewable energy. Therefore, we assess the options for the European steel industry to... (More)
The global steel industry accounts for 8–10 % of global CO2 emissions and requires deep decarbonisation for achieving the targets set in the Paris Agreement. However, no low-emission primary steel production technology has yet been commercially feasible or deployed. Through analysing revisions and additions of European Union climate policy, we show that green hydrogen-based steelmaking in competitive locations achieves cost-competitiveness on the European market starting 2026. If the deployment of competitive low-emission steelmaking is insufficient, we show that the European steel industry loses competitiveness vis-à-vis countries with access to low-cost renewable energy. Therefore, we assess the options for the European steel industry to relocate the energy-intensive ironmaking step and trade Hot Briquetted Iron for rapid deep decarbonisation of the European steel industry. Lastly, we discuss complementing policy options to enhance the Carbon Border Adjustment Mechanism’s strategic value through European Union-lead global climate cooperation and the possibility of sparking an international decarbonisation race. (Less)
Please use this url to cite or link to this publication:
author
; ; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Green steel, CBAM, EU ETS, Carbon club, Climate Change
in
Nat. Commun.
volume
16
issue
9087
article number
9087
publisher
Nature Publishing Group
ISSN
2041-1723
DOI
10.1038/s41467-025-64440-9
language
English
LU publication?
yes
id
08461294-aa7d-420a-b1cf-54f1de94aec7
date added to LUP
2025-10-16 09:25:36
date last changed
2025-10-16 09:52:50
@article{08461294-aa7d-420a-b1cf-54f1de94aec7,
  abstract     = {{The global steel industry accounts for 8–10 % of global CO2 emissions and requires deep decarbonisation for achieving the targets set in the Paris Agreement. However, no low-emission primary steel production technology has yet been commercially feasible or deployed. Through analysing revisions and additions of European Union climate policy, we show that green hydrogen-based steelmaking in competitive locations achieves cost-competitiveness on the European market starting 2026. If the deployment of competitive low-emission steelmaking is insufficient, we show that the European steel industry loses competitiveness vis-à-vis countries with access to low-cost renewable energy. Therefore, we assess the options for the European steel industry to relocate the energy-intensive ironmaking step and trade Hot Briquetted Iron for rapid deep decarbonisation of the European steel industry. Lastly, we discuss complementing policy options to enhance the Carbon Border Adjustment Mechanism’s strategic value through European Union-lead global climate cooperation and the possibility of sparking an international decarbonisation race.}},
  author       = {{Johnson, Constantin and Åhman, Max and Nilsson, Lars J and Li, Zhenxi}},
  issn         = {{2041-1723}},
  keywords     = {{Green steel; CBAM; EU ETS; Carbon club; Climate Change}},
  language     = {{eng}},
  month        = {{10}},
  number       = {{9087}},
  publisher    = {{Nature Publishing Group}},
  series       = {{Nat. Commun.}},
  title        = {{Emerging green steel markets surrounding the EU emissions trading system and carbon border adjustment mechanism}},
  url          = {{http://dx.doi.org/10.1038/s41467-025-64440-9}},
  doi          = {{10.1038/s41467-025-64440-9}},
  volume       = {{16}},
  year         = {{2025}},
}