Key points
- Coal-based steelmaking capacity under development globally – projects that have been announced or are under construction – increased to 380 million tonnes per annum (mtpa) in 2022 from 350 mtpa in 2021.
- The steel industry now faces as much as US$554 billion in stranded asset risk as countries build out coal-based capacity while simultaneously working towards their carbon neutrality commitments.
- The Global Steel Plant Tracker includes data on all 731 mtpa of steelmaking capacity under development globally, making it the most up-to-date overview of changes in the global steel industry and the first reference point for bodies like the International Energy Agency.
Coal-based steelmaking capacity under development globally that follows the ‘blast furnace-basic oxygen furnace’ production method increased to 380 mtpa in 2022 from 350 mtpa in 2021, at a time when its share of the world’s total capacity must shrink dramatically in order to hit decarbonization targets, according to a new report from Global Energy Monitor.
The annual survey of data in the Global Steel Plant Tracker finds that almost all of the coal-based capacity under development is in Asia (99%), with China and India holding the majority of those developments (79% together).
For the first time ever, India surpassed China as the top developer of coal-based capacity: it holds 40% of coal-based ‘blast furnace-basic oxygen furnace’ capacity under development, while China is responsible for 39%.
But while coal-based steelmaking has in recent years ceded part of its share to cleaner forms of production, the transition is moving far too slowly.
According to the International Energy Agency’s Net-zero by 2050 scenario, the total share of ‘electric arc furnace’ capacity should reach 53% by 2050. This means 347 million metric tonnes (Mt) of coal-based capacity would need to be retired or canceled and 610 Mt of electric arc furnace capacity would need to be added to the current fleet.
Caitlin Swalec, Program Director for Heavy Industry at Global Energy Monitor, said, “Steel producers and consumers need to raise ambition for decarbonization plans. The transition away from coal-based steelmaking is underway but moving far too slowly. Developers that add coal-based capacity now run the risk of facing billions in write downs in the future.”
