She adds that a hydrogen ecosystem will also need to be developed for green steel, as decarbonisation will require about 50-million tonnes a year of competitively priced green hydrogen, with commercial viability versus conventional steelmaking routes requiring green hydrogen supply at $2/kg. 

The report warns, however, that these measures will still fall short of emissions targets, which necessitates a further incremental $200-billion to $250-billion investment in carbon offset measures, such as carbon capture, utilisation and storage, as the industry will need to capture and store 470-million tonnes of carbon to reach its emission target in 2050.

Green premiums are also inevitable, given new technologies and low-carbon feedstocks are likely to inflate steel production costs by 15% to 20%, in which steelmakers will pay about $100/t by 2050 to align themselves to a 1.5 °C goal by 2050, Wu avers.

“While steelmakers will have to swallow the price hikes for raw materials, carbon abatement costs will ultimately be passed on to steel end-users, meaning it is the consumer who must pay for the green premiums.”