"We need to establish standardized carbon emission measurement criteria and agreed-upon carbon reduction certification guidelines."
"The WTO should ensure fair steel trade, and new trade rules like the EU's CBAM are necessary."
Efforts to ensure fairness in steel trade must precede the smooth decarbonization of the global steel industry.
On May 7 (local time), Edwin Basson, Secretary-General of the World Steel Association, attended the Green Steel Forum held in Singapore and stated, "Creating a level playing field will be key to steel trade as the global steel industry pursues decarbonization."
He added, "Common principles for carbon-related standards and branding, such as measuring criteria for greenhouse gas emissions and reductions and the mass balance approach, are being discussed to ensure fair trade in steel amid decarbonization efforts."
Basson pointed out, "The measurement approaches developed by the global steel industry over the past 20 years lay the foundation for harmonious future measurements. G7 and G20 countries are currently discussing a unified measurement approach for carbon emissions, and new agreements among major countries are needed."
Currently, many steelmakers market their own brand of decarbonized steel using the 'mass balance approach.' In most cases, the carbon dioxide reduction effect from one part of the production process is offered as a carbon reduction certificate for products produced in another part of the process.
Basson stated, "These principles have been agreed upon by the members of the World Steel Association and will be used to develop official guidelines. This will promote decarbonization in a responsible and transparent manner."
He emphasized, "Steel trade transactions are always open, with 30-40% of the world's total steel production being traded within regions. Therefore, a fair and open trade system is necessary. To maintain this, rules and a trade environment ensuring a level playing field among steelmakers from different countries must be established."
He continued, "The WTO must be at the center of the process to ensure a level playing field. Global countries are working to develop new trade rules like the EU's CBAM, which consider carbon emissions and, in some cases, the carbon cost and decarbonization efforts in steel production."
Currently, the global steel industry and major market research firms expect world steel production to increase by 20-25% from the current level to 2.4-2.6 billion tons by 2050. Most steel-producing countries aim to achieve carbon neutrality by 2050, and the global steel industry has set a target of reducing carbon emissions by 50% by 2050.
Meanwhile, Basson predicted that due to the shortage of raw materials like scrap steel and DRI needed for EAF production, which is a core technology for carbon neutrality, about 50% of total steel production will still rely on the BF/BOF route by 2050. Asian countries, including South Korea, China, Japan, and India, as well as ASEAN, will maintain high dominance in BF production. In China, the share of EAF production is expected to increase to a maximum of 30% over the next decade.
The shortage of hydrogen needed for the decarbonization of BF is another challenge, similar to the issues of hydrogen storage and transportation.
Basson stated, "Hydrogen energy is needed to replace coal as an energy source for manufacturing low-carbon steel products. However, the high cost of hydrogen production means that the demand for coal in power generation and metallurgy is likely to continue."
He added, "The World Steel Association recognizes that decarbonization of the steel industry is a lengthy and costly process, requiring significant changes to secure clean energy needed for steel manufacturing. Despite these difficulties, we will see examples of low-carbon steel products being produced with very low carbon emissions from BF/BOF processes in the near future."
Meanwhile, the investment to convert the existing BF/BOF process that uses coal as a raw material and energy source to a hydrogen reduction steelmaking process is progressing, mainly in Europe, and companies like Sweden's SSAB are producing and distributing green steel.
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