Demand for steel is expected to increase in the coming decades as population growth, industrialization, and urbanization in emerging economies continue. A substantial amount of new steelmaking capacity will be added in developing and emerging economies by 2030: this marks a geographic shift in global steel production to countries where there is the greatest need for support for implementing low-carbon steel production.
Research shows that all new plants post-2025 must be strictly low-emission, but there remains a large gap between announced carbon-intensive and low-carbon capacity in the pipeline. Most new low-carbon projects for primary production are in high-income countries and China, while developing and emerging economies to a large extent are planning on high carbon capacity additions.
Very few international finance institutions (IFI) have strategies to support green steel production but there is a growing momentum to develop them. IFIs can play an important role in kick-starting the transition to green steel, especially in emerging and developing regions.
This report identifies five key opportunities for IFIs to enable a transformation of the steel industry in emerging and developing economies: fund feasibility studies and development of policy frameworks for green steel, facilitate country roadmaps for green hydrogen, support demand for green steel, and support circular business models.