The global transformation of the metallurgy sector toward decarbonization does not yet have a clear leader. At the same time, the experience of metallurgical giants shows that the green transition in the industry is directly influenced by carbon pricing and economic incentives.
Caroline Ashley, Executive Director of SteelWatch, spoke about this in an interview with the Mining and Metallurgy Center.
The “green” transformation of the economy primarily hinges on financial considerations. Fossil fuels for a number of industries are still subsidized by the state. However, businesses interested in the transition must use lobbying pressure to achieve competitiveness in clean production, Ashley believes.
According to her, a number of factors influence the decision to invest in decarbonization or not:
- carbon pricing;
- availability and cost of “green” hydrogen;
- government support;
- the solvency of buyers who will choose “green” steel over “dirty” steel.
"Policymakers and steel product buyers who put public responsibility first will help stimulate the transition. A robust emissions trading scheme in Europe, along with cross-border carbon adjustment for all steel imports, is extremely important," emphasized Caroline Ashley.
The expert points out that interference in the EU Emissions Trading System (EU ETS) could slow down progress in decarbonization. In her opinion, if companies are genuinely interested in shaping their future competitiveness, they should demand not softening of the system, but a firm and defined emissions policy without swings and reformations.
The “green” transition is inevitable
Currently, the pace of the transition remains unchanged, as do emission volumes in the sector. This is primarily due to geopolitical uncertainty, causing businesses to delay investments in decarbonization.
Caroline Ashley is convinced that the transformation of the steel industry with the abandonment of fossil fuels is inevitable, and the economy of the future will be defined by access to renewable energy sources.
"Citizens are increasingly aware that economic shocks will continue until we abandon fossil fuel-based production. The war in Iran, as well as the war in Ukraine, should not be viewed as a challenging period in a fossil-fuel-based economy. It must be understood as the end of that economy," insists the expert.
EcoPolitic previously reported on the catastrophic impact of CBAM on exports of Ukrainian steel products to the EU.
Industrialists emphasized that Ukraine’s industry cannot compete with the European one due to unequal conditions.
