Global steel industry doubles down on coal, as new capacity outpaces retirements

Continued investments in new coal-based steelmaking capacity and the planned relining of blast furnaces to extend their operations threaten the industry’s clean transition, according to Global Energy Monitor’s sixth annual report on the sector.

The report finds that 319 million tonnes per annum (mtpa) of coal-based blast furnace capacity globally has either been announced by the industry or is under construction, a five percent increase over the previous year.

Together with an additional 80 mtpa of capacity with  planned relinings, new blast furnace investments far outpace the 141 mtpa of currently operating blast furnace capacity that has announced retirement plans.  Global blast furnace capacity is projected to grow by a net 88 mtpa by 2035.

With roughly 88% of all steel sector emissions generated from coal-based production and the industry responsible for 11% of global CO2 emissions, investments in greener technologies are imperative for the world’s  industrial transition toward net zero emissions. 

Yet the share of green steelmaking capacity increased only marginally in the past year and progress towards green  ironmaking also remains minimal. 

The lower-emissions EAF steelmaking technology increased its share of global operating capacity by just 1% from 33% to 34%. In ironmaking, only 10% uses direct reduced iron (DRI) over emissions-intensive coal-based BF technology, and just 2% (4 mtpa) of operating DRI capacity uses net zero compatible green hydrogen as a primary reductant instead of fossil fuels.