Why steel? Why SteelWatch?
It is exciting to launch SteelWatch. But why SteelWatch? Why do we exist?
The reasons for SteelWatch to exist are worrisome, galvanising, and among the best-hidden secrets in the climate change space.
Our Director Caroline Ashley explains why SteelWatch has been created. The reasons we exist are worrisome but also galvanising.
It is exciting to launch SteelWatch. But why SteelWatch? Why do we exist?
The reasons for SteelWatch to exist are worrisome, galvanising, and among the best-hidden secrets in the climate change space.
Why do we focus on steel?
The steel industry is the industrial sector with the fastest growing emissions since 2000. In a period when CO2 emissions should have started declining, they have actually doubled.
I sometimes hear people in the US or Europe say, ‘why should I cut my carbon footprint, its India and China growth that matters’. 1 Well the climate footprint of the steel sector – 7% of annual greenhouse gas emissions – matches India’s total annual emissions. But few people know that.
To be completely blunt, none of us have a hope of living on a planet ‘stabilised’ at ‘only’ 1.5 degrees of climate change unless the steel industry changes course fast. Seventy percent of steel is made using coking coal, and on current pathways, that production method will eat up a quarter of the carbon budget that we have left for half a chance of staying at 1.5 degrees.2 The steel industry is shifting, just not nearly fast enough for a 1.5C pathway.
Why SteelWatch?
There are already some great organisations working on steel decarbonisation. So why do we need SteelWatch?
Firstly, the steel sector needs greater transparency and pressure overall. It has received less scrutiny than other sectors – power, autos, meat – perhaps because of national sensitivities, lack of consumer brand presence, or that unhelpful ‘hard to abate’ label that now needs to go. There is some powerful research happening on how steel can decarbonise. The latest, just last week from Agora, has already shifted views of the feasibility of phasing coal out of steel by the early 2040s. But there are few voices willing to call out complacency, greenwashing, or insidious delay tactics with policy makers. We can.
Of course the limits of what is currently technically and commercially feasible matter a lot. But if we let that be the only thing that matters, the only voice in town, we cannot hope to tackle climate change sufficiently. What is feasible needs to be looked at in the context of what the climate needs, and how painful inaction will be. We need a vocal challenge to the assumption that being a bit better than last year is enough. We need to push ambition that at first seems daunting and over time becomes the leading narrative, and an opportunity for a competitive edge.
Secondly, there couldn’t be a better time. Disruption has started – old habits and assumptions are having to change. A timetable to end free allowances in the EU Emissions Trading Scheme, the Inflation Reduction Act in the US, and the first green steel operations in Northern Europe are all catalysing questions and new directions. Steel company announcements on cleaner steel are picking up pace, even if not going for depth. The shape of the new sector that emerges is not yet clear. This is the time to influence the pathway and pace.
Thirdly, the task is urgent. Decarbonising in 2049 for net zero in 2050 is too late. IPCC is quite clear: globally we need to slash emissions by 2030. So steel needs to get in on that.
Transforming steel is happening in real time but needs long term investments. It requires big investments R&D, robust engagement with workers and communities. That is why steel companies need to start now on their public transition plans to green steel. And why we need to track those plans and their delivery. This takes patience but, the task in hand is also urgent, and more urgent than steel CEOs seem to grasp.
Finally, steel is a source of national pride, but also an internationally traded commodity. Dynamics in one country or continent will directly affect another. That may be through competition between producers, shifts in iron and metallurgical coal supply, trade tariffs, investor requirements, or rising green steel demand. And so too, having an international civil society organisation that can link and catalyse arguments and evidence for change across regions can add oomph in this space. We aim to be a literal and figurative translator between regions, in the cause of faster deeper change.
Market dynamics are exactly that – dynamic. Not only will technology and demand shift. So too will narratives and standards. Perhaps even the personal aspirations of steel CEOs shift as societal expectations change. Changing views of what is possible and what is essential will shift market norms. We will play one small role in the change space. But collectively we all have to deliver change by 2030 if we want a prospect of a warmer but still liveable planet.
1 There are many arguments against this kind of view, which we don’t go into here.
2 Sunsetting Coal in Steel Production, SteelWatch, 2023
