Feasible supply of steel and cement within a carbon budget is likely to fall short of expected global demand

Abstract

The current decarbonization strategy for the steel and cement industries is inherently dependent on the build-out of infrastructure, including for CO₂ transport and storage, renewable electricity, and green hydrogen. However, the deployment of this infrastructure entails considerable uncertainty. Here we explore the global feasible supply of steel and cement within Paris-compliant carbon budgets, explicitly considering uncertainties in the deployment of infrastructure. Our scenario analysis reveals that despite substantial growth in recycling- and hydrogen-based production, the feasible steel supply will only meet 58-65% (interquartile range) of the expected baseline demand in 2050. Cement supply is even more uncertain due to limited mitigation options, meeting only 22-56% (interquartile range) of the expected baseline demand in 2050. These findings pose a two-fold challenge for decarbonizing the steel and cement industries: on the one hand, governments need to expand essential infrastructure rapidly; on the other hand, industries need to prepare for the risk of deployment failures, rather than solely waiting for large-scale infrastructure to emerge. Our feasible supply scenarios provide compelling evidence of the urgency of demand-side actions and establish benchmarks for the required level of resource efficiency.

Fig. 1. Potential range of future global zero-emissions infrastructure deployment.

a Carbon capture capacity for 2021 projected by the International Energy Agency (IEA) scenarios. b Carbon capture capacity for 2050 projected by the IEA scenarios. c The potential range of future carbon capture capacity. d Total electricity supply projected by the IEA scenarios. e The potential range of future total electricity supply. f The potential range of future emission intensity of electricity. The data are based on a series of Energy Technology Perspectives reports. We examined all reports and extracted data from those reports for which data were available. Current operating and planned carbon capture capacities for 2030 were obtained by accessing the IEA database in June 2023. The right-hand error bars in Fig. 1c show the range of 2050 values.

Fig. 2. Global feasible supply of steel and cement within Paris-compliant carbon budgets by 2050.

a Steel supply within a 1.5 °C budget. b Cement supply within a 1.5 °C budget. c Steel supply within a well-below 2 °C budget. d Cement supply within a well-below 2 °C budget. The expected demand data are based on the International Energy Agency (IEA) Baseline scenario (Stated Policies Scenario), the IEA Net Zero scenario, and the Low Energy Demand (LED) scenario.

Fig. 3. Global crude steel production per process within a 1.5 °C budget by 2050.

a BF-BOF: blast furnace and basic oxygen furnace route. b Fossil DRI-EAF: fossil fuel-based direct reduced iron and electric arc furnace route. c H2 DRI-EAF: hydrogen-based direct reduced iron and electric arc furnace route. d Scrap-EAF: scrap-based electric arc furnace route.

Fig. 4. Cumulative feasible supply of steel and cement compared to the minimum requirements to meet basic human needs, 2015-2050.

a Steel. b Cement. The data on the minimum requirements are based on empirical data on the relationship between global in-use steel and cement stocks and the five essential services (i.e., electricity, water, sanitation, shelter, and mobility). Error bars reflect the uncertainty in the relationship between historical need satisfaction and material use levels around the world. It should be noted that the minimum material requirements for basic human needs only include the requirements for countries where the per capita in-use material stocks do not reach sufficient levels to satisfy needs.

Fig. 5. Feasible per capita in-use stocks of steel and cement in 2050 compared to the current levels across four income groups.

a Steel. b Cement. Current in-use stock levels for steel and cement are based on the literature and divided into four income groups with reference to the World Bank classification. The most populous countries in each income group (i.e., the United States, China, India, and Ethiopia) are presented separately from the overall distribution. The levels of minimum requirements to satisfy basic human needs are based on the literature.

Fig. 6. Comparison of the global feasible supply and expected demand for the construction and manufacturing sectors in 2050.

The feasible supply is based on the 1.5 °C budget case. The expected demand is based on the International Energy Agency Baseline scenario (Stated Policies Scenario). ‘Compatible’ indicates feasible supply, while ‘Incompatible’ indicates a gap between feasible supply and expected demand.