The global carbon neutrality goal set by the Paris Climate Agreement requires socially, economically and politically actionable strategies to reach net zero greenhouse gas (GHG) emissions at national levels. These strategies must be informed by robust, iteratively updated evidence capturing the specifics of diverse national circumstances and developed with all key stakeholders in a consultative fashion. The Deep Decarbonization Pathways (DDP) methodology provides an open but structured means to elaborate, communicate and debate such country-driven scenarios of long-term transitions. This special issue presents advancements in the DDP methodology to integrate key features required to investigate carbon neutrality. This includes the detailed representation of the Agriculture, Forest and Other Land Uses (AFOLU) sector as a key source of negative emissions; a detailed sectoral approach across transport, industry, land-use and power generation that considers a broad range of mitigation options; and the explicit investigation of the compatibility with socio-economic development priorities as defined by each country. The scenario analysis conducted in Argentina, Brazil, China, India, Indonesia, Mexico and South Africa highlights the necessity for wide-ranging sector-focused policy packages supported by adequate international cooperation, in order to simultaneously address multiple objectives in a consistent policy framework. The detailed policy insights gathered in this Special Issue provide concrete benchmarks against which progress of countries towards carbon neutrality can be assessed.

This paper explores strategies for achieving net zero emissions in the United States steel industry by 2050, consistent with the Paris Agreement. The US faces a pivotal moment in the lifecycle of its steel production fleet in the late 2020s, where the opportunity exists to integrate next generation clean steel technologies into the industrial base and become a global market leader in net zero steel by mid-century. Effective policy support at the federal and state levels will be essential for transitioning the most GHG-intensive production methods to cleaner alternatives during this upcoming window of opportunity. Our results indicate that the Inflation Reduction Act alone is unlikely to be sufficient to drive a timely transition to net-zero steel production, and that additional demand-side, trade-related, and post-IRA policy measures are required. The paper contextualizes U.S. steel production within global efforts, examining implications for technological change, energy demand, emissions reductions, and international trade using a geospatially detailed techno-economic model of steel production across 137 countries and 1000+ facility locations. Our analysis finds that the US is well positioned to be one of the first countries in the world to achieve net zero steel manufacturing and could make this transition using existing technologies, but the speed of transition and the resulting patterns of investment are sensitive to US policy choices on trade openness to the rest of the world and with close allies. Trade-restrictive pathways, while capable of accelerating domestic decarbonization, also entail higher costs and economic risks that must be carefully managed.

The steel industry emits 2,400–2,713 Mt CO2 and 12 Mt of fugitive methane globally each year, yet progress towards decarbonization has been limited. In this Review, we examine the potential, feasibility and barriers to decarbonization of the steel sector. The blast furnace–basic oxygen furnace (BF–BOF) accounts for ~72% of global steel production and has the highest carbon emission intensity of existing production routes (~2.3 t CO2 tsteel−1). Conversely, the scrap-based electric arc furnace (EAF) route, which contributes ~23%, has the lowest carbon intensity (~0.68 t CO2 tsteel−1). China, Japan and others rely heavily on BF–BOF whereas the EAF route is favoured in a limited number of nations such as the USA. Established process-level solutions, such as enhanced energy efficiency and waste heat recovery, can reduce carbon intensities by up to 20%. Whereas reductions of over 80% can be achieved with emerging hydrogen-based and electrolysis-based technologies. For example, the carbon intensity of steel produced with hydrogen-based iron reduction technologies is ~0.4 t CO2 tsteel−1 at a cost of over US$800 tsteel−1 (compared to ~US$450 tsteel−1 for BF–BOF). These high costs, together with regional resource limitations and low technical readiness, limit widespread near-term deployment. System-wide measures, such as material efficiency, circular economy and industrial symbiosis, could contribute 30–65% of the required total emissions reduction in line with the 1.5°C target. Future work should prioritize implementing a coordinated, multi-scale approach that combines process-level innovations with system-wide strategies and region-specific policies. The steel sector is a major greenhouse gas emitter, and decarbonizing steel production is critical to meeting climate targets. This Review outlines the environmental impacts of steel production and discusses process-level and system-wide decarbonization strategies, their technological and regional feasibility, and policy frameworks required to support a globally coordinated transition.

Emerging middle-income countries have indicated a strong commitment towards mitigating their greenhouse gas (GHG) emissions not only through their Nationally Determined Contributions (NDCs) but also by raising their climate ambition and committing to net-zero emissions at COP 26 in Glasgow, as well as to tripling renewables at COP 28. The electric power generation sector plays a crucial role in supporting the sustainable social and economic development of a nation but is also currently one of the largest and growing sources of energy related GHG emissions in major emerging economies. In this study, we analyse current policy and deep decarbonization scenarios of the power sector in four developing middle-income economies (Brazil, India, Indonesia and South Africa). Through retirement of old, inefficient fossil-based power plants and a transformative shift towards non-fossil-based variable and firm primary energy sources the results demonstrate a reduction in carbon intensity to 104 grams CO2//kWh (Indonesia), 96 grams CO2//kWh (India) and 43 grams CO2//kWh (South Africa). To achieve power sector decarbonization a step change increase in policy stringency is required, combined with substantial international financial support through mechanisms like Just Energy Transition Partnerships. This must be combined with necessary market reforms to make these markets self-sustaining for needed investments to meet development, energy security and climate goals.

Energy-economic models are increasingly being used to inform climate mitigation policies. This Comment describes three situations where models misinform policymakers and calls for more iterative, policy-orientated modelling exercises that maximize learning in the pursuit of long-term emissions reductions goals.

Building materials could facilitate long-term removal of atmospheric carbon dioxide

Emissions-intensive, trade-exposed (EITE) industries must decarbonize to limit global warming to 1.5 degrees C. This study explores how policy stringency and regional variability impact EITE industrial decarbonization. It uses Canada as a case study due to its heterogeneous industrial sector and high regional resource variability. The study has two scenarios: one with global climate action where the world pushes to limit warming to 1.5 degrees C, and one where Canada acts to achieve net-zero emissions by 2050 and the rest of the world lags. The scenarios differ in three ways: the global price of oil, the pace of technological change for low emission technologies, and domestic climate policy. In the global action scenario, a carbon price of $430USD2020 was needed to achieve 75% decarbonization of EITE industries by 2050. In our global inaction scenario, EITE industries only decarbonize 25%, as domestic climate policy considered international competition and the risk of industrial shutdown. If competitiveness concerns persist as simulated in this scenario, Canada is highly unlikely to achieve deep industrial decarbonization by 2050. The results also show that regional variability plays a significant role in low emissions technology adoption. While all regions will need targeted innovation and commercialization support as well as market uptake mechanisms, we find that relative advantages and disadvantages in terms of resource availability and industrial mix play an important role in how regional decarbonization occurs. For instance, regions with inexpensive local fossil fuels and ready geology suitable for CO2 storage have a high uptake of carbon capture and storage. Regions with access to abundant hydroelectricity rely more on electrification as a decarbonization pathway. Regions with no relative resource advantages are at greater risk for industrial shutdown due to the higher cost of decarbonization.

There is scientific consensus that limiting warming in line with the Paris Agreement goals requires reaching net zero CO2 emissions in the 2050s and net negative CO2 emissions thereafter. Because of the entrenchment of current fossil fuel energy and feedstock demand estimated in almost all global modelled scenarios, 'abated' fossil fuels, using carbon capture and storage (CCS) technologies, are likely to be part of any transition. This will be primarily in cement & lime kilns, chemical production, waste incineration, possibly iron and steel making, and processes designed to produce concentrated CO2 waste streams (e.g., oxycombustion for power). Any use of abated fossil fuels in the context of recent commitments, however, requires consideration of capture rates for fuel processing and end-use, permanence of storage, upstream production fugitive methane, and sufficient means to offset residual emissions. Based on an assessment of evolving CCS technologies and practices in existing sectors and jurisdictions, criteria are proposed for defining 'abated' fossil fuels where 100% GHG abatement is achieved on a lifecycle basis. This can be accomplished through: 1) CO2 capture rates of more than or equal to 90% of CO2 emitted; 2) permanent storage of captured emissions; 3) reducing upstream and end-use fugitive methane emissions to less than 0.5% and towards 0.2% of gas production, & an equivalent for coal; and 4) offsetting any remaining emissions through permanent carbon dioxide removal (CDR). We also discuss commercialization and deployment policy for CCS, including regulation and market mechanisms, highlighting the need to integrate these criteria into international climate agreements.

UNEP’s Emissions Gap Report 2024: No more hot air … please! is the 15th edition in a series that brings together many of the world’s top climate scientists to look at future trends in greenhouse gas emissions and provide potential solutions to the challenge of global warming. As climate impacts intensify globally, the report finds that nations must deliver dramatically stronger ambition and action in the next round of Nationally Determined Contributions or the Paris Agreement’s 1.5°C goal will be gone within a few years.

A mid-century net zero target creates a challenge for reducing the emissions of emissions-intensive, trade-exposed sectors with high cost mitigation options. These sectors include aluminium, cement, chemicals, iron and steel, lime, pulp and paper and petroleum refining. Available studies agree that decarbonization of these sectors is possible by mid-century if more ambitious policies are implemented soon. Existing carbon pricing policies have had limited impact on the emissions of these sectors because their marginal abatement costs almost always exceed the tax rate or allowance price. But emissions trading systems with free allowance allocations to emissions-intensive, trade-exposed sectors have minimized the adverse economic impacts and associated leakage. Internationally coordinated policies are unlikely, so implementing more ambitious policies creates a risk of leakage. This paper presents policy packages a country can implement to accelerate emission reduction by these sectors with minimal risk of leakage. To comply with international trade law the policy packages differ for producers whose goods compete with imports in the domestic market and producers whose goods are exported. Carbon pricing is a critical component of each package due its ability to minimize the risk of adverse economic impacts on domestic industry, support innovation and generate revenue. The revenue can be used to assist groups adversely impacted by the domestic price and production changes due to carbon pricing and to build public support for the policies.

Working with in-country modelling teams and models, targeting net-zero CO2 emissions by later this century, and using decomposition and emissions driver analysis, we develop low emissions cement and steel scenarios linked to usable policy levers for Brazil, India, and South Africa. We find significant mitigation potential from a 'current policy' scenario on the demand side (13-26%) and the production side (58-71%), but these countries' substantial needs for more basic infrastructure - and thus for cement and steel inputs - indicate net-zero will remain very challenging. Demand-side material efficiency reductions, where less steel and cement deliver the same service through better design, will require decades of educational and regulatory efforts, working with buildings sector and infrastructure supply chain actors to reach full potential. In the short to medium run, focusing on reducing emissions from production may deliver more near-term cumulative mitigation by allowing close attention to a small number of domestic companies with high managerial, technical, and financial capacity. To achieve such reductions, governments should encourage the concentration of cement and concrete making at professional facilities to allow the use and regulation of already commercialized lower GHG practices like cementitious material clinker replacement and better concrete mixing while planning for future carbon capture and storage. Governments should also encourage investment in secondary steel making using electric arc furnaces to reuse local recycled scrap, eventually supplemented with increasingly low emission primary iron. International cooperation and support are needed to agree on and implement CO2 intensity accounting systems, improve access to low-emissions production technologies through innovation and commercialization combined with technology transfer or co-development, and offer financial and technical support for clean production investments.Key policy insightsOn the demand side, international buildings organizations and domestic building code regulators should work with architects, structural engineers, and construction companies to implement regionally appropriate material efficiency options.On the production side, international cement and steel organizations, governments and domestic firms should explore cooperation on technology innovation and transfer, finance, and private and public lead market mechanisms, e.g. premia for low emission production and green procurement.Adaptive long-term sectoral strategies addressing demand and supply will need to be developed with all affected parties.

COP27 in Egypt, 2022, brought the possibility of a commitment to phase out “unabated” fossil fuels, and recent UNFCCC climate negotiations in Bonn, June 2023, have demonstrated this will require that “abated” will need to be carefully and transparently defined to be consistent with the Paris Agreement goals. Recent literature and the IPCC AR6 WGIII scenario database indicate the role of fossil fuels in future net-zero energy and industrial systems. There needs to be a substantial reduction in overall fossil fuel use, use of CO2 capture and storage (CCS) on the remaining fossil fuels, and minimal use of unabated fossil fuels only where CCS is not possible. Upstream fugitive emissions of methane from coal, oil and gas extraction must also be reduced by 50-80% or more from current levels. Stricter requirements for systems compatible with the 1.5°C limit include all new and retrofit CO2 emitters employing 90-95%+ capture rates starting in the late 2020s and early 2030s. This is not practically feasible for most mobile, dispersed, and smaller volume emitters, which will require alternative mitigation measures. We elaborate on the standards required for abated fossil fuels and reflect as to whether they can be credibly met in the near term.

The need to reduce CO2 emissions to zero by 2050 has meant an increasing focus on high emitting industrial sectors such as steel. However, significant uncertainties remain as to the rate of technology diffusion across steel production pathways in different regions, and how this might impact on climate ambition. Informed by empirical analysis of historical transitions, this paper presents modelling on the regional deployment of Direction Reduction Iron using hydrogen (DRI-H2). We find that DRI-H2 can play a leading role in the decarbonisation of the sector, leading to near-zero emissions by 2070. Regional spillovers from early to late adopting regions can speed up the rate of deployment of DRI-H2, leading to lower cumulative emissions and system costs. Without such effects, cumulative emissions are 13% higher than if spillovers are assumed and approximately 15% and 20% higher in China and India respectively. Given the estimates of DRI-H2 cost-effectiveness relative to other primary production technologies, we also find that costs increase in the absence of regional spillovers. However, other factors can also have impacts on deployment, emission reductions, and costs, including the composition of the early adopter group, material efficiency improvements and scrap recycling rates. For the sector to achieve decarbonisation, key regions will need to continue to invest in low carbon steel projects, recognising their broader global benefit, and look to develop and strengthen policy coordination on technologies such as DRI-H2.

The production of iron and steel is one of the largest global sources of industrial greenhouse gas (GHG) emissions. South Africa (SA) could competitively export near-zero embodied GHG primary iron to steelmakers in leading decarbonizing markets. A green primary iron production process substitutes hydrogen for coke as the iron ore reductant. A SA plant would enjoy most of its competitive cost advantage from hydrogen produced using very low-cost solar photovoltaic electricity. In import markets, using the European Union (EU) as an example, steelmakers could use imported green primary iron to increase utilization of electric arc furnaces while reducing total EU demand for clean electricity (i.e. for hydrogen for reduction needs) and thereby lower total system costs of decarbonization. SA could bolster crucial export and tax revenues while moving towards a broader transition to a sustainable industry. Three things are needed to unlock new global business models involving the relocating of green primary iron production to regions with abundant renewable energy: (1) a steelmaker with access to a hydrogen reduction technology appropriate for SA's ores willing and able to invest in a plant; (2) access to a bankable lead market for that plant's production; and (3) international trade rules and emissions accounting related to the carbon content of commodities that enable the reconfiguration of supply chains to reduce global decarbonization costs. Key policy insights Green primary iron production in SA could increase value added from local iron ore and solar energy resources, bolster exports and initiate transformation to a sustainable industry. Green primary iron imports from SA to the EU could reduce the cost of overall decarbonization while increasing the competitiveness of steel product manufacturing. Enabling conditions include a willing steelmaker, fair access to the EU iron market, enabling trade rules, and embodied emissions certification and accounting. Green primary iron imports can reduce demands on EU low carbon electricity supply, lowering electricity prices and increasing energy security. The collaboration envisioned between the EU and SA could help develop the framework for future inter-regional decarbonization strategies for other commodities and other countries.

It is possible — and crucial — to green the building blocks of the modern world. It is possible — and crucial — to green the building blocks of the modern world.

Decarbonizing global steel production requires a fundamental transformation. A sectoral climate club, which goes beyond tariffs and involves deep transnational cooperation, can facilitate this transformation by addressing technical, economic and political uncertainties.