Steel, Industrial Carbon, and Geopolitics

This paper looks at the geopolitics of hiding and finding industrial carbon through the perspective of steel, a key component of the global carbon footprint (8%). China, Russia and (until 2022) Ukraine have been key players as top steel exporters and states where steel production remains highly CO2-intensive and largely based on blast-furnace (BOF) technology using large amounts of coking coal; the European Union emerges an important player both as a competitor but also as a regulatory power, i.e. through its CBAM initiative and its impact in individual country carbon markets. The paper spotlights the role of coal in the "hidden fossil fuels and hidden carbon" (see Balmaceda 2023) of the steel industry, a role complicated by coal’s dual role both in the steel as well as the electricity generation sectors. Taking as a start the steel value chain in each of our focus jurisdictions, the paper analyzes how these chains have been affected by the hiding carbon logic and by the newer finding-and-taxing carbon external challenge, how these interface with each country’s geopolitical goals and realities, and what have been the key global level implications.