Cutting Steel Emissions Deeply Need Not Cost More, Southeast Asia Model Finds

A cost model of steelmaking in six Southeast Asian countries finds that cutting the industry's carbon dioxide emissions by two-thirds by 2050 would cost no more per metric ton of steel than a far shallower cut, provided hydrogen and electricity infrastructure and cross-border technology sharing arrive alongside a carbon price rather than after it. The study was published Sept. 7 in Environmental Research Letters.

That condition is the authors' point. Tae Yong Jung of Yonsei University, Yoonmo Koo of Seoul National University and colleagues write that the apparent trade-off between emission ambition and cost is "largely an artifact of incomplete policy packages," and they conclude that governments in the region should put hydrogen and electricity investment before or alongside carbon pricing.

The numbers are outputs of the team's model, not measurements. It covers 19 steelmaking technologies across the six countries from 2020 to 2070, picks the cheapest mix of equipment that meets demand, and runs scenarios varying carbon pricing, technology cooperation and infrastructure readiness. The paper is open access under a Creative Commons license.

With no climate policy in the model, continued blast-furnace expansion locks in rising emissions, reaching 1.14 metric tons of carbon dioxide per metric ton of steel by 2040, 18% above the 2020 level. Against that business-as-usual case, the most favorable combination of policies brings emissions down 67% by 2050, and that deep cut arrives at no higher cost per metric ton than a 17% cut.

The scenarios separate what each lever contributes. Carbon pricing produces the largest emission reduction, 27.1 percentage points on average, but raises costs. Infrastructure readiness adds 20.9 points and lowers them. Technology cooperation adds 2.4 points, delivers a 6% to 9% cost savings and spreads the transition across a wider set of technologies.

Its authors list funding from the Economic Research Institute for ASEAN and East Asia and the Institute of Energy Economics, Japan.