The Green Revolution Is Being Built on a Very Dirty Industry

The battle against climate change is relying on the same polluting building block that drove the second Industrial Revolution a century and a half ago. Steel, which transformed everything from guns and bridges to cities and shipping at the end of the 19th century, is also critical to the wind turbines, solar panels and electricity pylons needed to displace fossil fuels. But steel is itself reliant on burning billions of tons of coal, with the industry emitting more carbon dioxide than cars, buses and motorbikes combined.

Weaning a low-margin industry off cheap coal and onto more costly green steel technologies will require massive government support and concerted action by steelmakers from Tangshan to Indiana. In the past year, five of the six biggest steelmakers lined up behind the Paris Agreement, committing to reaching net zero emissions by 2050. U.S. President Joe Biden and Chinese President Xi Jinping are pushing hard to reduce greenhouse-gas emissions, while the European Union plans to slap an import levy on building materials produced in countries with lower environmental standards, making local, low-emission steel more competitive.

“In the last year or so, the steel industry has collectively ‘got it,’” said Doug Parr, Greenpeace U.K.’s chief scientist. “Particularly since Biden got elected, there’s a recognition that climate policies are going to reach into all sectors. If one or two companies start to move to cut emissions, then others in the sector look very exposed.”

The Group of Seven nations, whose leaders are meeting in the U.K. this weekend, plan to take action to decarbonize steel and other industrial sectors, according to an early draft communique. The political impetus couldn’t come at a more important time, as renewable-energy technologies need even more steel per unit of energy they produce than the fossil fuels do.

But there’s still a long road ahead. We’ve crunched the numbers on getting steel to net zero in a series of charts showing the vast scale of the challenge.

Modelling by BloombergNEF shows that to build enough wind turbines to reach net zero by 2050, 1.7 billion tons of steel will be needed. That’s enough to make 22,224 replicas of San Francisco’s iconic Golden Gate Bridge. Solar panels and pylons to expand electricity grids are similarly steel heavy.

Baowu Steel Group, China’s state-owned national champion and the world’s No. 1 producer, is among the steelmakers committed to carbon neutrality by 2050, a decade before the target set by President Xi for the country as whole. Baowu has been at the forefront of technological change in China’s industry for decades and could be pivotal in driving the nation’s green ambitions.

Beijing is aiming for steel to hit peak carbon emissions before 2025, and is pushing for a 30% cut by 2030. It’s a massive task because the industry is dominated by coal-fired blast furnaces that will be difficult to transform, and many of which have years of useful life remaining.

“The industry is looking with a lot of interest at what is happening in China, just because of the sheer size of the Chinese industry,” said Benedikt Zeumer, a consultant at McKinsey & Co. “Because the Chinese industry is centrally driven, direction can be translated into complete action.”