Current Accounts: The Hinrich Foundation Trade Podcast
Decarbonizing the global steel industry
Published 22 August 2023
In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, guest host Nii Akrofi Smart-Abbey from the Association of Foreign Press Correspondents in the United States (AFPC-USA) and Executive Director of Asia Trade Center Deborah Elms discuss how lack of standardization is proving to be a challenge in decarbonizing the steel industry.
Tune in to the special episode hosted by the Association of Foreign Press Correspondents in the United States here:
Iron and steel production accounts for 8% of annual carbon emissions, according to a WTO climate change brief on decarbonizing the steel industry, and global steel production has tripled in the past 50 years with 1.8 billion tons produced in 2020. This is mainly due to the methods used to produce steel which includes combining iron with carbon, recycled steel, and other elements. But that is not all. Decarbonization standards in the iron and steel industries are proliferating. Navigating different standards can create costs and inefficiencies at a time when efforts must strive to be as effective and affordable as possible. The industry is committed to going green but with the lack of standardization, will it be possible to agree on a single blueprint for reducing carbon emissions?
Deborah Elms of the Asian Trade Center and Nii Akrofi Smart-Abbey from the Association of Foreign Press Correspondents in the United States (AFPC- USA) discuss the challenges of decarbonizing the steel industry.
Here is an excerpt from their conversation:
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Nii Akrofi Smart-Abbey: |
How does lack of standards in producing and decarbonizing steel impact trade? What benefits would the industry derive once they are able to standardize decarbonization? |
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Deborah Elms: |
Well, let me give you a simple example. So the European Union has their carbon border adjustment measurement, or CBAM, which is just coming into effect. And that can be very problematic for non-European countries, especially non-European developing countries who have to understand a very complicated piece of legislation. A lot of standards embedded in that apply that in a context that is very different in their domestic environment where there may be no rules at all on carbon at all. So they have to sort of catch up with what are European standards and then they have to be prepared, if they're not yet meeting those standards, to pay a price for their exports, which is new and can be quite expensive. And that is going to create real challenges for potential exporters around the world who are suddenly confronted with much higher freight compliance costs and potentially impossible levels of complexity that they have to address. So we’re going to see, differences between markets again. You can say yes, for climate reasons we absolutely need to do this, but for competitiveness reasons [it] can be really challenging. Again, especially, it's going to hit the hardest, as always, developing countries and smaller companies who really don't have the resources to comply. |
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Author
Deborah Elms
Dr. Elms is Head of Trade Policy at the Hinrich Foundation in Singapore. Prior to joining the Foundation, she was the Executive Director and Founder of the Asian Trade Centre (ATC). She was also President of the Asia Business Trade Association (ABTA) and the Board Director of the Asian Trade Centre Foundation (ATCF).
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