Key points
- Lower-emissions electric arc furnace (EAF) steelmaking accounts for 49% of all capacity currently announced or under construction, up from 43% in 2023 and 33% in 2022
- Under current projections, the global operating steel fleet is set to reach 36% EAF by 2030, just shy of the net zero-aligned target set by the International Energy Agency (IEA).
- Most EAF capacity in development has yet to break ground however, with just 14% under construction.
- Construction on new coal-based steelmaking capacity dominates, threatening to derail the green steel transition.
The global iron and steel industry made major strides towards net zero goals in the last year, with more lower-emissions EAF steelmaking coming online and entering the development pipeline than ever before, according to Global Energy Monitor’s (GEM) annual report on the industry.
The report shows two trends supporting this shift: First, nearly all newly-announced steelmaking capacity follows the EAF production route (93%), which indicates a strong boost in electric arc furnace steelmaking in the years to come.
Second, planned capacity and retirements indicate a transition away from coal-based steelmaking: The global fleet will count an additional 171 million tonnes per annum (mtpa) of basic oxygen furnace (BOF) capacity, 310 mtpa of EAF capacity, and 80 mtpa of capacity with unknown technology.
If these developments and retirements take effect, global operating steel capacity should sit just under the IEA’s net zero-aligned target for 2030, and with heightened momentum the goal is increasingly attainable.
The IEA has called for a milestone of 37% EAF by 2030, so it is the first time since the launch of the Global Steel Plant Tracker that this milestone is in sight.
The report warns however that while EAF steelmaking is being announced at record rates, less than 14% of this potential capacity has moved to the construction phase: Of all projects that have actually begun construction, nearly 46% are still emissions-intensive BOF-based.
This substantial buildout of new coal-based capacity is increasingly out of alignment with a net zero future and poses a significant threat of carbon lock-in and stranded assets.
At the country level, China maintains its enormous share of global operating capacity, but India has forged ahead as the largest developer of all upcoming iron and steel plants, particularly coal-based steelmaking.
Caitlin Swalec, Program Director for Heavy Industry at Global Energy Monitor, said, “The progress is promising for a green steel transition. Never before has this much lower-emissions steelmaking been in the pipeline. At the same time, the buildout of coal-based capacity is concerning. What the industry needs now is to make these clean development plans a reality, while backing away from coal-based developments.”
