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REPORT: The Climate Club can be key to decarbonising the steel sector

In this Policy Brief we dive into how the Climate Club can be designed to decarbonise the steel sector based on five key policy recommendations.

Press Release

Brussels/Berlin, Monday 27 November 2023: Today, EPICO KlimaInnovation and the Konrad Adenauer Stiftung published a policy brief on how the Climate Club can contribute to decarbonisation of the steel sector, "Piloting the Climate Club in the Steel Sector: Focus on the Quick Wins, Create a Safe Space for Dialogue". Based on five key recommendations identified in the policy brief, the Climate Club can lead efforts for international cooperation in the steel sector.

The Climate Club was established at the G7 Summit in June 2022 and will be officially launched at COP28 in Dubai. As an intergovernmental forum with a focus on industrial decarbonization, the Climate Club has the potential to fill a gap for international cooperation in the steel sector and raise the ambition for global emission reduction. The steel sector, which accounts for 8% of total energy system emissions, is important for economies worldwide and will be critical for meeting a variety of socio-economic needs, such as the residential sector, and for building renewable energy infrastructure.

Piloting the activities of the Climate Club in the emission-intensive and trade-exposed steel sector has the potential to accelerate emission reduction in the sector, and further to provide the blueprint for other sectoral cooperation.

This publication provides guidance on the focus areas and activities of the Climate Club in the steel sector. With membership criteria based on nationally defined steel decarbonisation pledges and roadmaps, the Climate Club can create a vision for a near zero emission steel industry and facilitate greater institutionalisation for the goal of decarbonising the steel industry.

The policy brief makes the following recommendations:

  1. To successfully kick-start its activities, the Climate Club should avoid a narrow focus on carbon pricing and carbon leakage.
  2. Membership to the Climate Club for the steel sector should be based on national steel decarbonisation pledges linked to national roadmaps for the steel sector.
  3. The Climate Club should offer match-making for bilateral and plurilateral partnerships across the steel value chain with benefits for countries from the Global North and the Global South.
  4. The Climate Club should focus on "quick wins" in areas for cooperation with investment of relatively low political capital.
  5. Building on trust and goodwill established through partnerships, the Climate Club should provide a safe space for discussions on more contentious issues in the steel sector in the medium and long-term.

The Policy Accelerator Process

The Policy Brief is the result of a project involving key high-level topical stakeholders, coming together throughout EPICO's and KAS' yearly second sprint of design-thinking process of the "Policy Accelerator for Climate Innovation 2023". Authors convened for a two-day workshop in Brussels on 27 and 28 September 2023 where their ideas were challenged by Kurt Vandenberghe, (Director-General of the Directorate-General Climate Action (DG CLIMA) of the European Commission), Francisco Javier Ulloa Muñoz (Deputy Head of Mission at the Embassy of Chile in Germany), Parth Kumar (Programme manager for the Industrial Pollution Unit, Centre for Science and Environment, New Delhi), and Karin Jancyková (Programme Manager for Climate and Energy, Multinational Development Policy Dialogue at Konrad Adenauer Foundation).

The policy brief was developed by Parul Kumar (Senior Policy Specialist Environment, EPICO), Heiner von Lüpke (Research Associate, Climate Policy Department, DIW Berlin), Max Åhman (Associate Professor, Office Director, Project Manager and Senior Lecturer, Environmental and Energy Systems Studies, Lund University), Simon Otto (Project Researcher, 3E Centre for Environment, Economy and Energy, BSoG) Samuel Flückiger (Head of EU Climate Policy, tyssenkrupp steel), and Åsa Ekdahl (Head of Environment and Climate Change, World Steel Association).


Parul Kumar, Senior Policy Specialist Environment, EPICO KlimaInnovation:

"The decarbonisation of the steel industry needs stronger international cooperation and the Climate Club is well-positioned to contribute as an ambitious intergovernmental body."

"To be successful, the Climate Club should focus on national steel decarbonisation pledges for member countries, facilitate partnerships across the steel value chain, build trust through quick wins, and over time, provide a safe space for discussions on contentious topics in the steel sector."

Press contact:

Yoali Sandoval
Mobile: +49 176 7027 2857
Mail: yoali.sandoval@epico.org

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