Last reviewed 3 November 2023

Steelmaking is not only a major global greenhouse gas emitter, but also vital for a successful net zero emissions transition and a cleaner, cooler planet. The future for thousands of SMEs, jobs and a reliable new supply chain could pivot on the UK steel sector going “green”, Jon Herbert reports.

The Government’s recent changes, on environmental and cost grounds, to how the UK plans to meet its carbon-cutting commitments under the Paris Climate Agreement are part of a wider review of its strategy to decarbonise, become sustainable and rescue nature by 2050.

At a time of high economic stress, where the low-carbon axe falls on businesses, the public sector and individuals will be a major and unavoidable question for the present and/or future Government to answer.

Big industrial sectors are not exempt

From teaspoons to container ships, steel is vital for the modern world. However, the energy-intensive iron and steel industry was responsible for some 25% of global industrial carbon dioxide emissions in 2019, making it a critical target for climate change mitigation.

Steel is the most widely recycled material by volume — with the disadvantage of having one of the world’s largest industrial carbon footprints. It releases some 8% of all global greenhouse gases. By comparison, transport releases 23%.

Going green: from bad guy to good guy

Thousands of ordinary companies are being encouraged very strongly to systematically decarbonise their own processes (Scope 1), procurement specifications (Scope 2) and wider supporting supply chains (Scope 3).

However, with the key emitters of road travel, aviation and shipping removed from the equation, the impact of steel is left. This explains why Port Talbot Steelworks in south Wales owned by Tata Steel UK and British Steel at Scunthorpe owned by China’s Jingye are under pressure to make green steel or face closure.

The investment costs will be high — as would the price of failure. Green steel will be needed even more in the future to make the wind turbines, nuclear reactors and small components needed for a permanent net zero.

Why change is necessary

Traditional steelmaking is incompatible with net zero, but as demand for steel continues to grow, even clean steel recycling in the circular economy will not provide enough supply.

Losing the UK steel industry and importing steel instead would incur its own large carbon costs. As Tata points out, if UK steel-making stops, existing industry supply chains will become less efficient.

That could mean some users/customers eventually closing or relocating overseas. The UK might then need to outsource its manufacturing and would have a smaller economy.

Dirty figures show growing demand

Decarbonising the steel sector is a huge challenge which could cost $1.4 trillion and involve a revolution across the whole value chain.

Almost two billion tonnes of steel are produced worldwide annually. Global output has increased tenfold since 1950 and more than doubled since 2000 with China’s export output. On the other hand, UK production was 28 million tonnes in 1970, but only 6 million in 2022.

The positive news is that the energy needed to produce a tonne of steel has fallen by circa 60% in 50 years. Even so, the sector is one of 18 of 50 behind its net-zero 2050 trajectory, according to the International Energy Agency’s (IEA’s) report Tracking Clean Energy Progress 2023.

Statistics from GlobalData also show that, of 230 planned steel plants with known technology, more than 70% will use traditional carbon-intensive blast furnaces where coke from coal is heated to 1650°C in a mix with iron ore which then reacts with carbon to make steel. To be clean, these would need to use carbon capture and storage (CCS) technology.

Expanding the steel circular economy will not be enough to meet future demand, which is expected to grow by 20% before 2050, according to the World Steel Association.

The alternative is green steel. This will mean producing massive amounts of green or blue hydrogen.


There are currently three routes to making steel.

  • Blast furnaces — some 75% of steel is made in furnaces where coke creates heat and carbon monoxide which strips oxygen from iron ore. With hydrogen as an alternative, the by-product is benign water rather than carbon dioxide, but to be green, hydrogen must be created with cheap wind- and solar-based renewable energy.

  • Recycled steel — circa 30% of all steel comes from recycling. The modern process melts scrap in arc furnaces preferably powered by green electricity. Using fossil fuels, carbon dioxide emissions are circa 0.4 tonnes per tonne of steel.

  • Direct reduced iron (DRI) – uses methane to produce hydrogen and carbon monoxide which then turn iron ore into iron. Even with renewables, the process needs more electricity than blast furnaces.

Clean green solution

To decarbonise primary steel production, we need geen hydrogen made with renewable electricity to react with iron ore, which is then used in the DRI route. This creates iron and water, instead of iron and carbon dioxide, at a relatively low 1000°C. Liquid metal is then processed in electric arc furnaces.

However, we are not quite there yet. Europe’s first commercial green hydrogen steel plant should open in Sweden in 2025.

Every little helps even in a huge industry.

A new study by Nature suggests that if 4883 iron and steel plants around the world are retrofitted with low-carbon technology five years earlier than planned, their emissions could be cut by 69.6 billion tonnes (±52%) of carbon dioxide between 2020 and 2050 – close to double 2021’s global total.

The study matches plants worldwide with best-case technologies and strategies to cut or end emissions. The authors say their “road map” shows how net zero for steel can be achieved if individual plants pull their weight.

On location

Port Talbot Steelworks’ two 90m high blast furnaces are part of the steelworks built in the 1950s. The plant can produce 5 million tonnes of steel annually and employs 4000 people on site, plus 10,000 in the wider community. However. it also releases 5.7 million tonnes of carbon dioxide — some 2.08% of the UK’s total.

Both blast furnaces, plus two more in Scunthorpe, would cost £6 billion to decarbonise. The industry says it cannot pay this. The Government has offered £300 million for each furnace.

Port Talbot Steelworks provides steel for the Nissan Leaf electric car built in Sunderland and Heinz baked beans tins. It could make 3.6 million tonnes of steel this year. Its largest market is construction. Nevertheless, its future is uncertain without fundamental change.

New history

Tata says no clean technology decisions have been made, but it is expected to replace at least one blast furnace with an electric arc furnace.

If this goes ahead, it will signal a move, at both Port Talbot and British Steel, away from making new steel and towards recycling the 10 million tonnes of waste steel scrap the UK produces annually and currently exports.

Tata adds that lower-carbon, and eventually zero-carbon, steel could give Port Talbot a new lease of life — a view shared by the Unite union, which thinks the UK sector is near collapse and must “invest in green steel”.

IExporting carbon emissions offshore risks the UK losing “the economic value that pays for our NHS and other national services”, Tata says, and the status quo will do nothing to reduce Britain’s global heating contribution.