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AuthorMatthew Watkins

Principal Analyst View profile

The global transition from an economy run on fossil fuel energy to one run on low or zero CO2 sources will have multiple impacts on the steel industry, both on the demand and supply sides. Examining these impacts, our team is compiling new and existing insights to serve as part of a featured series: Steel and the green energy transition.

This is a large and complex topic and there is no simple answer to the question of “will the energy transition be net positive or net negative for steel?” Different elements of the transition will act to increase or decrease steel demand and/or supply and these elements will impact on different timescales. There may be no single point in time that we can say, “the transition is all completed: what’s the result for steel?”

But there is value in understanding each of these elements in turn and what their impacts will be. Here we map out the key elements of the transition as they affect steel. Ongoing work addressing each element will sit within the insight series.

Steel and the energy transition - impact of green energy on steel demand

We included in this list policy developments such as carbon border tariffs and could also have included emissions pricing systems. These are drivers or enablers of many of the above factors. CRU has produced a range of content over the past two years, especially concerning carbon border adjustment mechanisms (CBAM), which subscribers can find on CRU Online by searching for ‘carbon border’. We are now looking to examine in more detail some of the elements that can be driven by such policies, as well as other elements of the transition. A further relevant piece of existing, policy-related content is looked at in our Insight, EU Green Deal launch – early reaction for steel, published on CRU Online for our steel subscribers. In this Insight, we took a high-level look at elements of the EU’s Green Deal when it was launched in December 2019. 

No shortage of topics to address

This ongoing series has already started with a number of Insights published addressing the supply side of the equation. From this perspective our series covers topics including:

  • Current technological landscape and options available for lower carbon steelmaking
  • Future of green premia across commodities including supply and demand drivers
  • How higher CO2 prices could shift the EU to low-carbon steelmaking
  • How the transition to CO2-neutral steelmaking will reduce the size of the European steel industry

Longer term, our series and future workplan will focus on the areas less-covered: demand impacts and topics remaining on the tables above. Looking at steel demand implications of the growth in renewable energy, especially wind and solar, and the shift to electric vehicles - there is no shortage of work to be done to better understand the implications for the steel industry. 

Our goal is to keep our subscribers informed. Informed with high quality data and comprehensive analysis produced to help you manage increasing challenges and execute critical business decisions with confidence. 

Join the green energy transition

Interested in receiving the insight series notifications and exclusive downloads? Discover content from the series, including presentations and subscriber-only updates.

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