SteelWatch Explainer: Met coal: what it is and why it is a climate risk
What needs demystifying?
Metallurgical coal – often shortened to ‘met coal’ – is coal that is used in making iron and steel. Making iron in blast furnaces, using met coal, accounts for the majority of steel sector emissions.
Beyond the circle of industry specialists, met coal has little public visibility. Definitions of what exactly constitutes met coal are varied and confusing.
Despite being a significant contributor to climate change, met coal barely features in discussions at climate meetings, or in setting targets to phase out fossil fuel. Phasing out of coal has focused on reducing the use of ‘thermal coal’ – coal used in power plants.
This SteelWatch Explainer sets out:
- How met coal is defined;
- Where met coal is produced and used;
- Why it is a major problem for climate;
- Why it is coming under greater scrutiny;
- How lobbying attempts to defend continued use of met coal, camouflaging it with terminology;
Previous SteelWatch Explainers in the series explain the climate impact of the coal-based blast furnace and how the steel industry can move beyond met coal using green hydrogen.
What is met coal?
Met coal is coal used to make metals. It is principally used for reducing iron ore to iron in blast furnaces, before iron is made into steel. Over one billion tonnes per year of met coal are produced each year, and it accounts for around 14% of total global coal consumption.
Met coal and thermal coal
The core distinction between ‘met coal’ and ‘thermal coal’ is the purpose for which they are used. Met coal is used for making iron, and thermal coal is used for generating power. These different usages relate to differences in physical properties, such as met coal having higher carbon content and lower moisture content. This higher quality coal is more expensive,1 and it generally makes commercial sense to use it as met coal rather than burning it for power generation. But these physical differences are not rigid categories: they lie on a spectrum, with some overlaps. In particular, the lower quality met coal can be re-routed to be used as thermal coal instead.
Met coal and coking coal
The International Energy Agency (IEA) defines metallurgical coal as a group of coal products comprising “coking coal, semi-soft coal, and pulverised coal injection coal.” Confusingly, though erroneously, the terms ‘met coal’ and ‘coking coal’ are sometimes used interchangeably.2
Recent data shows that coking coal3 accounts for around two thirds of met coal.4 Coking coal is converted to coke (or ‘met coke’) in coke ovens, before it is fed into the blast furnace, where it is indispensable.5
Non-coking coal, accounting for the other third of met coal, includes pulverised coal injection (PCI) coal products and semi-soft coal. PCI coal is used in the blast furnace for operational and economic benefits, while semi-soft coal is used in the coke ovens along with coking coal to produce coke and also blended with PCI coal in the blast furnace. These coals are less distinct in their properties from thermal coal, and are the constituents of met coal that are most likely to be used instead as thermal coal. When non coking coal is used for thermal purposes, it no longer counts as met coal.6
Figure 1: The spectrum and blurred boundaries of met coal
The difference and definitions of what constitutes met coal matter, because coal that is defined as met coal is more easily sheltered from pressure for phasing out coal.
Why coal became central to iron and steel making
The history and geography of steel since the Industrial Revolution is intertwined with the mass exploitation of coal.
Blast furnaces, since their first appearance in the 12th century and for hundreds of years, relied on charcoal made from wood. Trees were felled in China, Europe and the Middle East to be turned into charcoal to feed the furnaces. Up to the 1700s, iron and steelmakers used charcoal both in their furnaces and to ‘carburise’ iron.
In 1709, Abraham Darby perfected the use of coke in a blast furnace to produce pig iron for pots and kettles. This new technique helped boost production, leading to further demand for coal and coke. As the industrial revolution took hold, iron and steelmaking developed in close proximity to coal mines. Then as global steel production spread in the 20th century, countries like the USA, China and India expanded their met coal mining while countries such as Japan and South Korea that depleted or lacked their own coal had to develop supply chains to import coal.
Today, 70% of steel produced globally is made in around 400 integrated steel mills that rely on met coal. This most widely spread steel production process is known as BF-BOF, where coking coal is heated to produce coke that is then fed into blast furnaces to produce iron, the prime ingredient of steel. Molten iron is fed from the blast furnace into a basic oxygen furnace (BOF) to make steel. For full details of the iron and steel making process and its impact, see SteelWatch Explainer: Steel and Climate. Today’s large-scale blast furnaces, typically exceeding 1 Mtpa capacity – the largest can have over 5 Mtpa capacity – cannot operate without coal. Figure 2 illustrates coal products in the blast furnace.
Figure 2: Inside a blast furnace
Met coal’s heavy climate impact
The use of met coal in iron and steelmaking is itself a significant contributor to climate change. The blast furnace produces more CO2 than iron, by weight. Transforming coal into coke (by heating it at high temperatures); burning it in the blast furnace; and processing the resulting iron into steel, means that for every tonne of steel produced, 2.3 tonnes of CO2 is emitted.
This alone means met coal has a massive carbon footprint, making it a major driver of the climate crisis.
But this is compounded by the vast quantities of methane released during its mining. Met coal is generally mined from deep underground where there is higher density of methane. Methane leaks are a frequent byproduct and are rarely well measured or reported. Methane emissions from met coal mining are estimated to be three times higher than for thermal coal. There is also a greater safety risk from explosions.
A 2022 report by the IEA estimated that methane leakage from met coal mining amounts to around 1 gigatonne of CO2e (carbon dioxide equivalent) per annum. Due to paucity of data on this phenomenon, most emissions statistics on coal-based iron and steelmaking ignore these methane emissions. If they were factored in, we estimate that steel production via the BF-BOF route emits 4.2 gigatonnes of CO2e per year. That would result in a very high emissions intensity of over 3 tonnes of CO2e per tonne of steel produced via the BF-BOF route.7
In addition to its climate impact, met coal mining also impacts on biodiversity, air quality,8 human rights, and workers’ lives. For instance, in August 2023 a fire in a met coal mine in Kazakhstan owned by steelmaker ArcelorMittal killed five workers, and later in October a methane explosion killed 46 workers in the same mine.
Where is met coal mined, exported and imported?
According to the IEA, global met coal production in 2023 amounted to 1107 million tonnes, accounting for 12.3% of global coal production.9
China is by far the largest producer, supplying its own steel industry and importing additional quantities to meet its needs. Internationally traded volumes represent a minority (32%) of total production. Australia dominates this category, accounting for around about 50% of global exports. The main importers are China, India, Europe and Japan (see Figure 3).
Figure 3: Global met coal production and trade
At the company level, met coal is largely produced by global mining and trading giants such as BHP-Mitsubishi Alliance and Glencore. However, steelmakers such as Nippon Steel (Japan), POSCO (South Korea), MMK (Russia), SAIL (India), JSW Steel (India) and RINL (India) also have stakes in met coal mines. The investments by Nippon Steel and POSCO reflect the fact that these steelmakers rely heavily on met coal, but cannot count on domestic coal supplies.
For example, in 2023, Nippon Steel acquired 20% of Teck Resources Ltd, which describes itself as the “second largest producer of high-quality steelmaking (coking) coal in the world” (the remainder of Teck is owned by Glencore (77%) and POSCO (3%). Teck mines produce around 27 million tonnes/year. Nippon Steel argued that the acquisition would stabilise its profits by “ensuring resilience to externalities” affecting costs and supply in the global coal market.
Met coal mining is still expanding
Back in 2021, the IEA stated that if the world is to hit its target of net zero emissions by 2050, there must be no new coal mines, or coal mine lifetime extensions.
However, met coal mines are currently still expanding, driven by companies like Glencore, Mitsubishi Corporation, Teck Resources, BHP group and Whitehaven Coal. The expansion is well-financed by banks and investors. In the seven years from 2016 to 2023, finance for met coal expansion totalled USD557 billion (excluding finance received by Chinese companies). As of June 2023, investors that owned USD163 billion worth of the 50 largest met coal developers (excluding Chinese companies), included BlackRock (holding 11%), Vanguard (10%), and Japan’s Government Pension Investment Fund (5%).
Met coal-related methane emissions could increase by 7% by 2030 if all proposed projects that have announced a 2030 start date are developed, and up to 20%, if proposed projects without starting dates also go into development.
Met coal has been missing from the climate debate
Staying within the limits enshrined in the Paris Agreement will require a phase-out of all types of coal. While strides have been made in circumscribing the use of thermal coal, met coal has largely been sheltered from these efforts. In part, this is because of strategic lobbying by the steel and mining industries suggesting that there is no alternative to coal-based iron and steelmaking, unlike thermal coal, which is increasingly being replaced as an energy source by renewables.
Studies by Reclaim Finance’s Coal Policy Tool showed that, while 46% of the 300 major financial institutions surveyed have adopted a climate policy to restrict financing of thermal coal, only 14 such policies specifically cover the financing of met coal, and only one (Zurich Insurance) has a robust exclusion policies on the expansion of met coal.
But pressure is mounting. German campaign group Urgewald’s Met Coal Exit List (MCEL) spotlights 252 met coal mining projects run by 160 companies in 18 different countries, putting pressure on lenders to stop funding them. Now Zurich Insurance has become the first global player to stop insuring the expansion of met coal.
An industry on the defensive
Some industry actors are trying to polish the image of met coal, and maintain it as a safe haven for coal investment and expansion at a time when thermal coal is starting to be phased out.
Some companies suggest met coal is fundamentally different from other coal, calling it ‘good’ coal, or even trying to rebrand it by using new terms. Glencore, for example, uses the term “coal and carbon steel materials”. Don Lindsay, ex-CEO of Teck, claimed that investors were undervaluing the company because “they don’t distinguish between the good coal and the bad coal. Steelmaking coal is absolutely vital for decarbonisation, but they don’t care.” These terms such as “Steelmaking coal” and “carbon steel materials” are industry terms that seek to make met coal more acceptable and thus less susceptible for pressure for fossil-fuel phase out.
Met coal is defended on the grounds it is indispensable for steelmaking. FutureCoal, an industry lobby group, says it is “a crucial component in steel production and industrial growth.” As recently as August 2024, the Japanese steelmaker Nippon Steel claimed in its quarterly earnings release that even “carbon neutral production processes will require a certain amount of coking coal”. Coal industries of Australia, New Zealand and most recently of the USA have been pushing to declare met coal a critical raw material.
This is disingenuous: all coal is coal, with serious climate impacts. And while steelmaking is indeed a vital part of a greener future, it does not need to depend on coal.
Variations on this narrative emphasise that steel by definition is an alloy of iron and carbon, and that because finished steel contains carbon, coal will always be needed to produce it. This argument doesn’t hold water: the amount of carbon in steel can range from 0.25% – 2%, depending on quality and hardness of the steel. Such small amounts can be sourced from coal, gas or even biological sources and can be added at ironmaking or steelmaking stage. This requirement does not justify using 770kg of coal per 1000kg of steel.
A future for steel beyond met coal
Deep decarbonisation of iron and steelmaking is absolutely essential if we are to meet internationally agreed climate targets.
Achieving this means retiring blast furnaces and the use of coal completely from the steelmaking process. In practice, this means both increasing the share of steel produced with scrap in an electric arc furnace (EAF), and adopting different techniques for making iron.
Specifically, the latter involves rapidly expanding the use of new production methods which can do without the use of coal-based blast furnaces. Today, this means making virgin iron using the direct reduction of iron ore (DRI) process. Already, a small but growing quantity of iron is made via DRI process, so far mainly with fossil gas as the input, resulting in a substantial cut in emissions. But a much greater prize comes from substituting the fossil gas with green hydrogen produced with renewable energy, at which point near-zero emissions steel production becomes possible. The first successful production of steel using this method was in 2021.
The green hydrogen-based DRI method (green H2-DRI) is now being installed in the first large-scale steel plants that are scheduled to enter production in 2026. For more details of hydrogen-based steelmaking, see SteelWatch Explainer: Green Hydrogen.
Met coal: changing the narrative
It is time to recognise that met coal is a key part of steel’s climate problem, and is not indispensable.
Policymakers, investors and the industry need to pay attention to met coal and how it is phased out of steelmaking:
- Coal mining, ironmaking and steelmaking companies need to adopt more transparent monitoring and measuring of met coal emissions, invest in immediate actions to cut emissions, and finalise plans to transition out of coal.
- Regulators and policy makers need to be aware of the climate impacts of met coal, and not be misled into giving it special status by industry claims that it is essential or ‘better’ coal;
- Financiers need to strengthen financial exclusions on met coal to match those on thermal coal. Until then, they should be aware that the term ‘met coal’ can be used to bypass their exclusions, by ‘camouflaging’ coal that may end up as thermal coal in power plants, cement plants or petrochemical factories.
- The renewable energy, iron mining and steelmaking industries, alongside policymakers, need to invest in the transformation of ironmaking to a fully renewable-powered coal-free process as part of our emerging zero emissions economy.
Met coal is coal, pure and simple, with climate impacts that match or exceed thermal coal. Meeting climate targets means phasing it out, completely.
This is part of SteelWatch’s Explainer Series, which aims to demystify confusing issues and set the facts straight on common industry claims, so as to build understanding and momentum for transformative steel decarbonisation.
Thanks to Martin Wright for editing this SteelWatch Explainer.
End notes
- KPMG Coal price forecast 2025. Met coal on an average has a 70-90% premium market price over thermal coal. In 2024, met coal was traded on an average at USD205/tonne, whereas thermal coal during the same period traded at USD135/tonne.
- An example from IEA: Coal of this quality [coking coal] is commonly known as metallurgical coal: IEA (2024). An example from Reuters: metallurgical coal, also known as coking coal”: Reuters (22 February, 2024).
- Within coking coal there is a spectrum: hard coking coal (high coking), semi-soft and soft coking coal (least coking).
- Coking coal is around 65% of met coal globally according to GEI, though the share varies geographically. GEI (2025) reports “The steel industry accounted for around 14% of total global coal consumption in 2022. Of this, 9% is coking coal and 5% is thermal coal.”
- Coking coal is heated in the absence of air, and it resolidifies to form a coherent, porous, hard coke. Coking coal has a high crushing strength that makes it indispensable in modern large blast furnaces. While coal in general brings carbon, energy and the reducing agents needed to transform iron oxides into iron in the blast furnace, coke also provides strong porous beds on which iron oxides lie and gas passes through.
- The blurry distinction between metallurgical and thermal coal is visible in mining data: Global Energy Monitor reports existing mining operations of 930 Mt of pure met coal mines and 780 Mt of mixed thermal-met coal mining. Coal Production by Coal Type, Global Energy Monitor (April, 2024). While industry often maintains a difference between met coal and thermal coal, this overlap is visible in this statement from the Minerals Council of Australia (2021): Both PCI coal and semi-soft coals are technically defined as metallurgical coal, but in practice can also be used for thermal purposes, for example in power stations.
- For full details, see our report, Sunsetting Coal in Steel Production (2023).
- CREA (2023). Air quality impacts of ArcelorMittal’s Temirtau steel plant in Kazakhstan — 1996 to 2023.
- Small discrepancies between estimated share of production (12.3%) and consumption (14%) can arise due to fluctuating stocks, or gaps in data. Consumption totals better reflect met coal’s climate impact, so if both numbers are available, it is best to use the consumption figure – but note that production is easier to track precisely, and that the consumption figure is of necessity an estimate.
Glossary of terms
Blast Furnace / BF-BOF
A blast furnace (BF) is where iron oxides are mixed with coal products to produce molten iron. The iron is then processed into steel in a basic oxygen furnace (BOF). This overall iron and steelmaking process is referred to as BF-BOF.
Coke
Coke is a coal product, derived from the distillation of coking coal by heating it to high temperatures in the absence of air in a coking oven. The resulting material is a porous, hard, dense substance with a high carbon content. It is used as a fuel and reducing agent in blast furnaces in ironmaking.
Direct reduction of iron ore (DRI) / H2-DRI
Direct reduction of iron oxides (DRI) is an ironmaking process that is an alternative to the blast furnace. The process is not dependent on coal; it can operate with a broad range of materials (including coal but also gas and hydrogen) to reduce iron oxides.
DRI is today commonly used with gas. It can get close to zero CO2 emissions if it uses green hydrogen (produced using renewable energy). This process is hydrogen-based direct reduction of iron, known as H2-DRI.
Metallurgical coal (also called ‘met coal’)
Metallurgical coal is a broad term referring to coal used for metallurgical purposes (ironmaking and steel making). It encompasses a family of coal types rather than to a single type of coal. The term is used to distinguish from thermal coal, although some coal types labelled as met coal can also be used as thermal coal.
Methane
Methane is a short-lived but potent greenhouse gas, 82.5 times more potent than CO2 across a 20-year time frame. It is the second biggest driver of climate change and is estimated to account for 30% of human-induced warming since the pre-industrial era.
Thermal coal
Coal that is primarily used to generate heat or electricity. When burned, thermal coal releases energy in the form of heat, which is then used to make steam which powers turbines, so producing electricity in thermal power plants.
