Countries to report on green steel and hydrogen at COP28

Governments attending COP27 have agreed on a package of actions focusing on sectors that account for more than 50% of total global greenhouse gas emissions including power, road transport, steel, hydrogen and agriculture sectors.

The actions under the ‘Breakthrough Agenda’ will be delivered through coalitions of committed countries, from the G7, European Commission, India, Egypt, Morocco and others, supported by leading international organisations and initiatives, and spearheaded by a core group of leading governments. These efforts will be reinforced with private finance and leading industry initiatives and further countries are encouraged to join.

Results are expected to be delivered by COP28 in Dubai in November 2023.

Alok Sharma, former UK Energy Secretary and COP26 President, said, “Since we launched the Breakthrough Agenda at COP26, the world has changed, and we are facing a perilous geopolitical and economic situation. That only makes international collaboration more urgent,”

“That’s why I am pleased that countries representing more than 50% of global GDP have now agreed to a set of priority actions for implementation. Now, it is vital for all to deliver and demonstrate real progress as we move forward. This is integral to achieving the 2030 goal of making clean technology affordable, available and accessible to all.”

Yesterday an international group of leading steel manufacturers announced the formation of a coalition to urge the United States and European Union to adopt a global emission standard that incentivises steelmakers to use the cleanest steel production process available.

The new coalition – the Global Steel Climate Council (GSCC) – supports a global standard that accelerates the transition to low-emission steel and recognises the potential of the recycled, circular steel model to reduce carbon emissions.

The transition to green steel will require a vast global investment, according to energy research consultant Wood Mackenzie and the International Energy Agency. They estimate around $1.4trn would be required to decarbonise the iron and steel sector by 2050.

The majority of the world’s steel production is extremely carbon-intensive because it primarily relies on mined and processed coal, iron ore and limestone, and it accounts for around 7% of global emissions.

An added complication is there are no clear metrics for how financial investment in this sector would be structured, nor clarity on standards.

Martin Pei, CTO at SSAB, said, “We need to create transparency and credibility on what true near-zero emissions materials are. Today, there´s no agreed definition for these materials, nor for how to measure CO2 intensity along value chains for the end product. Ambitious standards would contribute to the scale-up of production technologies that set the steel industry on a 1.5-2C compatible path.”

Under a ‘sliding scale’, two steel products could be classified as equally ‘green’, even though one was produced by creating multiple times more carbon emissions than the other.

The majority of investments in Europe – notably Scandinavia – into green technologies so far have come from venture capital financing.

A joint project named Hydrogen Breakthrough Ironmaking Technology (HYBRIT) developed by partners SSAB, LKAB and Vattenfall aims to create the first fossil-free steel and reduce Sweden’s total carbon dioxide (CO2) emissions by at least 10%.

Volvo has begun using fossil-free steel in its trucks, with the first electric trucks with fossil-free steel now being delivered to customers (pictured).

The fossil-free steel, produced by SSAB, is made by using a completely new technology with clean electricity and hydrogen.

H2 Green Steel, developing a hydrogen-powered green steel plant in northern Sweden, recently announced it has received support from leading European financial institutions for its €3.5bn debt financing.

The agenda builds on the leader-level commitment at COP26 by 45 countries to work together to make clean technologies and sustainable solutions the most affordable, accessible and attractive option in each of the emissions-intensive sectors of the global economy, before the end of this decade.

Areas for particular priority included the ramping-up of hydrogen production for clean energy purposes, and increasing the procurement of low-carbon material for public infrastructure projects.

These priority actions are being supported and accelerated by a raft of developments across industry and government-led initiatives, with accompanying key announcements seen today and throughout COP27. These include:

  • The First Movers Coalition, which launched at COP26 to help drive industrial decarbonisation, has expanded to 10 new corporate members including PepsiCo, General Motors, Rio Tinto and ETEX, to reach 65 in total with a combined market cap of about $8trn. Together they commit $12bn to commercialize zero-carbon technology to decarbonize the heavy industry and long-distance transport sectors, responsible for 30% of global emissions.
  • The First Movers Coalition also launched its cement and concrete sector, with newly announced companies committing to purchase at least 10% near-zero carbon cement and concrete per year by 2030.
  • A package of new financial announcements for industrial transitions: the launch of the Climate Investment Funds’ (CIFs) new Industry Transition Programme – the world’s first large scale dedicated finance programme for developing country industry transitions; a $410m green hydrogen investment in Egypt led by the EBRD; and World Bank plans to develop a $1.6bn green hydrogen global programme.

Other steelmakers – including those producing over 70% of all US and over 40% of all European manufactured steel today – use electric arc furnaces (EAFs) that principally input recycled scrap metal to produce steel, generating significantly lower carbon emissions.

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