The global steel industry is at a crossroads in its role in achieving the targets set under the Paris climate agreement to limit global warming to 1.5°C, according to a study by civil society group Steelwatch.
From now until 2030, an estimated 71pc of 400 steel facilities worldwide that are responsible for the majority of coal-based steel output will be due for a refurbishment also known as "relining".
Relining these assets risks locking in high-emission technologies for another 20 years. On top of this, there are at least 125 planned coal-based blast furnace (BF) projects globally that are likely to disrupt the green transition of the steel industry, Steelwatch said.
The report calls for an immediate halt to any investment on new or relined coal-based blast furnaces in OECD countries, while in emerging economies investment should be stopped for facilities that would come on line after January 2028.
"By 2050, a business-as-usual approach to coal-based steel production will see it eat up almost a quarter of the carbon budget that remains for the entire planet to have half a chance of stabilising at 1.5°C of warming," the report said.
Coking coal usage in blast furnaces is the main driver behind the high emission levels of the global steel industry.
Including methane emissions, Steelwatch estimates that production through the BF-BOF (basic oxygen furnace) route releases 4.2 gigatons/yr of CO2 and 90pc of emissions for the entire industry. This translates to over 3t of CO2 per tonne of steel emitted via the blast furnace route.
The report casts doubt over the short-term effectiveness of carbon capture technologies because of their inability to be ready at the speed and scale needed. Consensus around this idea has picked up recently, as other studies on the green transition of the steel industry have also concluded that carbon technology is still in its infancy.
The ability to scale clean electricity for hydrogen production, adequate government policy support and commitment from steel buyers to bridge the cost gap for zero emissions steelmaking are necessary in achieving the industry's net zero objectives, Steelwatch said.
