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New commentary in Nature Climate Change on climate clubs for decarbonising the global steel industry


In the context of NDC ASPECTS, a team of researchers from all over the project consortium has published a commentary in Nature Climate Change with the title: "A Climate Club to Decarbonize the Global Steel Industry".

So far, most climate club proposals focus on the coordination of carbon pricing and corresponding policy instruments among its members. Non-members, on the other hand, are being targeted with tariffs or similar penalties (carbon border adjustments) to protect their own green industry from unsustainable competition. Instead, the authors now propose to orient a climate club towards the concrete transformation challenges of individual sectors making a specific proposal for the steel industry.

NCC clubs for steel
The global steel decarbonization technology gap. The vast majority of green steel projects and initiatives are located in the Global North, but the bulk of future demand for green steel will come from emerging and developing economies.


Such a club could facilitate the transformation of the steel industry by addressing political, economic, and technological uncertainties. "In order to successfully implement the decarbonisation of the steel industry, a significant share of the existing fossil fuel-based production facilities will have to be replaced by CO2-free technologies in the next ten years. But these technologies are not yet widely available," emphasises Lukas Hermwille of Wuppertal Institute, the lead author of the study.

Moreover, these technologies require new infrastructures as well as significant amounts of renewable electricity and green hydrogen. It is still unclear whether and how sufficient demand for green steel will develop, which will also make it possible to refinance the additional costs of green steel compared to conventionally produced steel. In their contribution, the scientists explain how a steel climate club could make concrete contributions to overcoming this challenge.

Full reference: Hermwille, L., Lechtenböhmer, S., Åhman, M., van Asselt, H., Bataille, C., Kronshage, S., Tönjes, A., Fischedick, M., Oberthür, S., Garg, A., Hall, C., Jochem, P., Schneider, C., Cui, R., Obergassel, W., Fragkos, P., Sudharmma Vishwanathan, S., & Trollip, H. (2022). A climate club to decarbonize the global steel industry. Nature Climate Change.