The iron and steel sectors account for around 11% of carbon dioxide emissions worldwide (Carbon Brief 2021). Yet, under the International Energy Agency's 1.5°C scenario, demand is projected to rise by 12% by 2050, as steel will be increasingly used for renewable energy infrastructure, e-mobility and railways, which underscores the urgency of decarbonising steelmaking processes (IEA 2021).
To help chart a course for climate-neutral EU steel, EPICO is launching the Green Steel Dialogues, a new blog series unpacking some of the most contested policy debates in steel decarbonisation. With a focus on developments in the EU and Germany, each edition connects proposals from EPICO’s report ‘Ironing Out the Transformation of EU Steelmaking: Actionable Pathways for Climate Neutrality’ with perspectives from industry and civil society.
For our first edition, we sat down with Adina Adler, Executive Director of the Global Steel Climate Council, to explore how credible standards could finally bring order to the complex and fragmented debate on low-emissions steel.
Understanding the divide between the Blast Furnace-Basic Oxygen Furnace (BF–BOF) and the Electric Arc Furnace (EAF) route is key: these are the two main pathways to produce steel, with distinct implications for emissions, scrap use, and policy design. BF-BOFs reduce iron ore using coal and primarily produce flat steel from virgin iron while EAFs uses electricity to melt recycled steel, sponge iron (made in Direct Reduced Iron furnaces (DRI), which are more climate-friendly when using natural gas or fossil-free hydrogen), and limited amounts of pig iron. In Europe, only ArcelorMittal Hamburg (formerly Hamburger Stahlwerke) produces DRI. Since the sponge iron can be used in EAFs, the binary between BF-BOF and scrap-EAF is expected to vanish.
One policy tool to support decarbonisation is the adoption of so-called lead market policies: performance-based labelling schemes linked to regulation, including instruments such as public procurement, subsidies, and fiscal incentives. Yet, agreement on steel standards for low-emission steel has proven elusive, not only between BF-BOF and scrap-EAFs but also among NGOs, reflecting deep divisions over the potential of different low-emission technologies and the allocation of public resources. While some advocate for large-scale public support to decarbonise primary ironmaking through renewable hydrogen, others emphasise maximising scrap collection and upcycling, complemented by green iron sourced from the most competitive regions.
While some advocate for large-scale public support to decarbonise primary ironmaking through renewable hydrogen, others emphasise maximising scrap collection and upcycling, complemented by green iron sourced from the most competitive regions.
In Europe, major producers such as ThyssenKrupp do not operate any scrap-EAFs, reinforcing myths around the limitation of scraps, especially for flat steel production (See Steelwatch 2025 and Sandbag 2022). While being a relatively widespread phenomenon in the US (Laplace 2025), only one site in Europe, located in Cremona, Italy, produces flat steel in an EAF, using Arvedi’s ESP (Endless Strip Production) process. Arvedi Cremona was the world's second mini mill for flat rolled steel in 2009, operating on a metallic charge composed of approximately 67 to 71 % scrap, 18 to 19 % pig iron, and 12 to 14 % hot-briquetted iron (HBI) (S&P Global 2021). Arvedi claims a carbon intensity of only 133 kg of CO2 per tonne of steel produced.
Image: Source: The Steel Climate Standard Framework for Steel Product Certification and Corporate Science-based Emissions Targets
Standards matter, especially when public money is on the table. “Today, there’s a lot of noise, a lot of narrative engineering. Some primary producers are pushing for sliding scales that would still qualify two tonnes of CO₂ per tonne of steel as green. But that’s the global average. That’s not green, it’s just the status quo,” explains Adina Adler.
The GSCC was founded in 2022, emerging in response to what its members saw as the limitations of ResponsibleSteel’s approach. It now represents 22 steel producers, accounting for roughly 5 % of global capacity, and 15 companies from across the upstream and downstream supply chain. Its membership includes major US producers such as Nucor and Steel Dynamics, European firms like Riva, Celsa, and EuRIC (the European Recycling Industries' Confederation), and other international members including Deacero, Tenaris, Alfa Acciai Group, Icdas, Megasa, and Tokyo Steel.
ResponsibleSteel was launched in Australia in 2015. According to its latest Annual Progress Report, it has certified 66 sites across 14 countries. Its approach, dubbed the “sliding scale”, neutralises the scrap advantage in terms of CO2-e through a single benchmark, effectively averaging high-carbon and low-carbon producers. This method is based on assumptions - namely that scrap availability is insufficient and that scrap cannot be used for flat steel - which are increasingly being challenged.
Image: Source: ResponsibleSteel International Production Standard Version 2.1, May 2024
In contrast, the GSCC’s Steel Climate Standard sets differentiated targets for flat and long steel, allowing scrap-based producers to reward their contribution to climate mitigation and material efficiency. Its dynamic and differentiated approach is visible in its emissions intensity curves: flat products must move from 1.84 tCO₂/t in 2022 to 0.12 tCO₂/t by 2050, while long products must drop from 1.47 tCO₂/t in 2022 to 0.12 tCO₂/t. These targets integrate the more challenging use of steel scrap for flat steel while avoiding a bias towards DRI usage in long steel, which would be expensive and detrimental to climate and circular targets. “I don’t think neutralising scrap, as the sliding scale does, is fair, or useful” explains Adler. “Because scrap is a solution. And we should be encouraging solutions.”
I don’t think neutralising scrap, as the sliding scale does, is fair, or useful. Because scrap is a solution. And we should be encouraging solutions.
Image: Source: Material Economics (2020), Preserving value in EU industrial materials. A value perspective on the use of steel, plastics, and aluminium (p.30)
Still, the threshold for long steel products - 1.47 tonnes of CO₂ per tonne in 2022 - is considered relatively high. Importantly, no BF-BOF operator has joined the GSCC so far, probably due to the sliding scale approach favouring iron production.This has attracted criticism from both blast furnace producers and environmental organisations. They fear that scrap-EAF can be certified without making further decarbonisation efforts. As a result, the standard may allow companies to benefit from a green label without incentivising a real shift to near-zero emission technologies, such as hydrogen-based DRI (Steelwatch 2023). To this, Adler clarifies “What we’re doing is really a glide path. The thresholds evolve downward over time, and categories A, B, C can be added to reflect that. The idea is not just to define green steel, but to encourage progress. The Steel Climate Standard provides a single, technology neutral framework that applies to all steel producers equally on a global basis. Therefore, for some, it is already achievable, and for others, it is a target. Further to this, we sought to acknowledge companies whose past investments and efforts have already led to low carbon solutions.” An example is Nucor, which started switching to DRI in the 1960s and to thin slab casting (flat steel with scrap) in the 1980s. "For companies whose long products are at or above the IEA averages - and there are some in Europe - we are here to support their journey, which may include small as well as large production changes”, Adler concludes.
The idea is not just to define green steel, but to encourage progress. [...] For some, it is already achievable, and for others, it is a target. Further to this, we sought to acknowledge companies whose past investments and efforts have already led to low carbon solutions.
The GSCC has been vocal against the sliding scale approach. “Primary producers are spending millions lobbying for a sliding scale,” explains Adler. “They’re trying to get regulation to say that if they ‘improve’ their blast furnaces a little, they qualify as low-emission. But they don’t want to invest in EAFs. They don’t want to improve scrap sorting. They just want the label.”
They’re trying to get regulation to say that if they ‘improve’ their blast furnaces a little, they qualify as low-emission. But they don’t want to invest in EAFs. They don’t want to improve scrap sorting. They just want the label.
Inspired by ResponsibleSteel, the German Steel Association developed the Low Emission Steel Standard (LESS), which prides itself on its support by the federal government, NGOs such as Bellona Deutschland and Germanwatch, and scrap-EAF steelmakers such as GMH Gruppe. A comparison to which Adler responds that “The GSCC is a global organisation with steel producers, consumers and suppliers in more than 80 countries worldwide. We are an industry organisation working collaboratively with governments, NGOs, international organisations and other stakeholders, but operating independently in the marketplace. As far as we can tell, LESS has only German members, but not including all steelmakers, and has a number of skeptics.”
As far as we can tell, LESS has only German members, but not including all steelmakers, and has a number of skeptics
Scrap-EAFs have their own decarbonisation pathways. In 2023, an estimated 7.6 million tonnes of CO₂ could have been avoided if the electricity powering EAFs had been fully renewable in the EU. The carbon intensity of the grid plays a decisive role here, and over 75% of these avoidable emissions came from just three countries: Italy (3 Mt), Germany (1.9 Mt), and Poland (1 Mt) (E3G, Steelwatch, EPICO et al. 2025).
Image: Source: Science Based Target Initiative
The Steel Climate Standard includes scopes 1, 2 and 3, and requires corporate-wide science-based emission targets (SBET). Its market differentiator is the combination of these SBETs with product-level emissions intensity certification. Unlike static labels, product data reflects ongoing corporate emissions reductions, making the certification dynamic and more of a glide path than ResponsibleSteel or the Low Emission Steel Standard. “This isn’t creative accounting. It’s about cutting actual tonnes of emissions.” Adler explains. In 2025, for instance, Nucor set an SBET of 0.975 metric tons of CO2e per metric ton of hot-rolled steel produced by 2030, which was certified by the GSCC. At least half of the members will be certified by the end of 2025 with the remaining to come in 2026.
In the UK, the Lower Thames Crossing project has adopted a GSCC-based classification system for public procurement, assigning steel products a grade: from A to E, or “near-zero” based on scrap content and carbon intensity. From 2025, the project requires all procured steel to meet at least Category C, defined as emitting less than 660 kgCO₂e per tonne. This threshold covers the upstream emissions from quarrying, mining, raw material transport, and the production of hot-rolled steel. Downstream stages such as coating, fabrication, delivery to site, and assembly are excluded. Carbon offsetting is not permitted to meet the target. “This kind of system gives customers clarity,” welcomes Adler. “It tells them what they’re buying, and it tells producers what they should aim for.”
In terms of end uses, construction and automotive are still the two main consumers of steel in Europe, although infrastructure, energy infrastructure and defence are expected to gradually increase. In the EU, the revised Energy Performance of Buildings Directive introduces mandatory calculation and disclosure of the life-cycle Global Warming Potential (GWP) for new buildings, making embedded emissions - including from steel - directly relevant. By 2027, Member States must publish roadmaps for GWP limit values and from 2028, GWP disclosure will be required for all new buildings over 1000 m², and from 2030 for all new buildings. In 2015, France introduced the concept of life cycle assessment (LCA) back in 2015 in the context of its “loi relative à la transition énergétique pour la croissance verte”, which laid the foundations for the integration of GWP and LCAs, formalised in 2022.
Vehicles were notably excluded by the ESPR. Now, the EU Commission’s Proposal for a Regulation on circularity requirements for vehicle design and on management of end-of-life vehicles (VDEoL) introduces Reusability, Recyclability, and Recoverability requirements on the design and type-approval stage of vehicles, requiring manufacturers to demonstrate circular design and material performance before a vehicle can be placed on the market. Proposed measures include mandatory recycled content declarations and targets for steel (rising to 30% in some policy options), as well as post-shredder treatment requirements to improve scrap quality. Together, these policies create regulatory and market pressure on OEMs to demand verifiably low-emission or recycled steel. Yet, they also create pressure on recyclers to deliver less copper-contaminated scrap, and risk increasing prices for scrap for scrap-EAFs. In a new report, the Institut du Développement Durable et des Relations Internationales (IDDRI) proposes the creation of an E40+ scrap category with a maximum copper content below 0.15% (Gross & Hermine 2025). The idea is to secure a high-quality scrap stream suitable for flat steel production without distorting the market for standard E40 scrap used in long products like rebar, thereby enabling closed-loop recycling in automotive without penalising other EAF users. According to IDDRI, removing high-purity scrap for E40+ does not necessarily reduce supply for those EAF producers using more tolerant grades, if the new flow comes from enhanced dismantling.
Where policy lags, corporate buyers could lead according to Adler. “BMW, Volvo, Mercedes, they’re the ones who can push this,” says Adler. “If they say, ‘we’re only buying below 1 tonne of CO₂,’ the market will follow. But right now, demand is still fuzzy. And that fuzziness favours incumbents.”
With legislation such as the ESPR, the EU may be moving toward a more defined lead market approach. While the ESPR covers a wide array of products and prioritises design for durability, reparability, and recyclability, steel-specific delegated acts have yet to define how emissions performance classes will be applied in practice. By preserving distinctions between production routes and evolving targets over time, the GSCC positions itself not as a label, but as a framework that can be adapted to a changing industrial and regulatory landscape. “We’re still young,” Adler admits. “But we’re trying to be practical. We're not about policing. It’s about providing clarity, and a path forward.”
The GSCC aims to cut through the fuzz. Its framework allows customers to track progress year-on-year: if a producer commits to reductions, that trajectory is monitored. “That’s a game-changer,” Adler says. “We don’t say ‘you’re green or not.’ We say, ‘show us how you’re getting greener.’ That’s what lead markets should reward.”
But she warns that Europe's head start may not last. “In the US, EAFs are already the dominant route. The EU’s still debating definitions, still propping up blast furnaces. The Inflation Reduction Act may be paused, but many US projects are moving forward anyway.”
In other words: the race is on. And all eyes are on the IDAA’s voluntary carbon intensity label, which the ESPR Delegated Act on iron and steel would build on.
In the US, EAFs are already the dominant route. The EU’s still debating definitions, still propping up blast furnaces. The Inflation Reduction Act may be paused, but many US projects are moving forward anyway
Note: Throughout this series, we use the term “low-emission steel” rather than “low-carbon steel” to reflect the full range of greenhouse gas emissions (including methane (CH₄) and nitrous oxide (N₂O)). “Low-carbon steel” also refers to a specific metallurgical category (steels with less than 0.15% carbon content).