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29 Apr 2020, 13:09
Julian Wettengel

Europe’s steel industry must invest 100 billion euros for climate neutrality by 2050 – study

Clean Energy Wire

At least 100 billion euros of investments are necessary to make European steel production climate neutral by 2050, according to a study by Munich-based consultancy Roland Berger. “Europe's steel industry will need to invest heavily if it is to reach the EU's climate targets,” said Roland Berger partner Akio Ito, adding that companies will be unlikely to shoulder the investments by themselves. “The EU or individual governments should offer such additional tax breaks, subsidies and financing as are necessary to enable steel producers to make the switch.” The aftermath of the coronavirus crisis will add to the financial stress of steelmakers, making stimulus packages to support green steel transformation an even greater imperative, he added. There is still no conclusive answer to the question of what the right technological solution is for extensive CO₂ reduction, resulting in great uncertainty for companies, the consultancy said, adding that the transition needed to start in the next five to 10 years to be completed by 2050. Hydrogen-based direct reduced iron (DRI) is the most advanced method and “makes the most sense from a climate perspective” as soon as there is enough renewable energy available, Roland Berger noted.

Pressure is rising fast on industry to join the great decarbonisation race. Many energy-intensive German companies, like chemical giant BASF and steelmaker ThyssenKrupp, already have detailed plans for drastic emission cuts but lack viable business models to implement them. The steel-producing sector is currently the largest industrial CO₂ emitter in Europe, accounting for 22 percent of total emissions, Roland Berger writes.

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