Read the briefing here. 

The steel industry, long considered “hard-to-abate” due to its reliance on metallurgical coal, can now decarbonize faster thanks to technological advances. However, financial institutions remain slow to act, hindered by misconceptions about the cost and feasibility of decarbonization. Steel accounts for 11% of global CO2 emissions, and with demand expected to rise and aging facilities, the next six years are crucial for transforming production. The goal of this briefing is to dispel the common myths that financial institutions hold about steel decarbonization and the role of metallurgical coal. 

10 steel decarbonization myths debunked: 

1. The steel sector is “hard-to-abate”

2. Metallurgical coal and thermal coal are fundamentally different

3. Steel demand is projected to increase, so metallurgical coal demand will increase too

4. Fossil-free steel is too expensive

5. CCUS is needed to decarbonize the steel sector

6. Technologies are not mature enough, so there is still plenty of time to decarbonize the steel sector

7. CO2 emissions are the only relevant ESG issue in steel production

8. Financial institutions cannot do anything without government support to the steel sector

9. Current engagement strategies with steel companies are efficient

10. Adopting steel decarbonization targets is enough to decarbonize the steel sector

In order to stop funding coal-based steel and start funding fossil-free alternatives, financial institutions must abandon outdated beliefs and recognize the feasibility and necessity of transitioning the steel industry to a fossil-free future. This involves adopting policies to restrict financing to new metallurgical coal projects and the companies developing them, policies to restrict financing to new coal-based steel projects, to the extension of coal-based steel facilities’ lifetimes and to the companies in charge of such projects, improving existing steel decarbonization targets, and increasing financing for fossil free steel technologies and key enabling factors.