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Policy and pricing barriers to steel industry decarbonisation: A UK case study

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  • Richardson-Barlow, Clare
  • Pimm, Andrew J.
  • Taylor, Peter G.
  • Gale, William F.

Abstract

Global climate targets have highlighted the need for a whole-systems approach to decarbonisation, one that includes targeted national policy and industry specific change. Situated within this context, this research examines policy and pricing barriers to decarbonisation of the UK steel industry. Here the techno-economic modelling of UK green steelmaking provides a technical contribution to analysis of pricing barriers and policy solutions to these barriers in the UK specifically, but also to the broader industrial decarbonisation literature. Estimated costs and associated emissions projections reveal relevant opportunities for UK steel in contributing to national climate and emissions targets. Modelling demonstrates that green steelmaking options have been put at price disadvantages compared to emissions-intensive incumbents and that fossil-free hydrogen-based steelmaking has lower emissions and lower levelised costs than carbon capture and storage options, including top gas recycling blast furnace (TGR-BF) with CCS, and HIsarna smelter with CCS. Two primary policy recommendations are made: the removal of carbon pricing discrepancies and reductions in industrial electricity prices that would level the playing field for green steel producers in the UK. The research also provides relevant policy considerations for the international community in other industrial decarbonisation efforts and the policies that must accompany these decarbonisation choices.

Suggested Citation

  • Richardson-Barlow, Clare & Pimm, Andrew J. & Taylor, Peter G. & Gale, William F., 2022. "Policy and pricing barriers to steel industry decarbonisation: A UK case study," Energy Policy, Elsevier, vol. 168(C).
    • Handle: RePEc:eee:enepol:v:168:y:2022:i:c:s0301421522003251
    DOI: 10.1016/j.enpol.2022.113100
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    References listed on IDEAS

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    Cited by:

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    2. Liu, Yue & Sun, Huaping & Meng, Bo & Jin, Shunlin & Chen, Bin, 2023. "How to purchase carbon emission right optimally for energy-consuming enterprises? Analysis based on optimal stopping model," Energy Economics, Elsevier, vol. 124(C).
    3. Tom Savage & Antonio del Rio Chanona & Gbemi Oluleye, 2023. "Robust Market Potential Assessment: Designing optimal policies for low-carbon technology adoption in an increasingly uncertain world," Papers 2304.10203, arXiv.org.
    4. Sandra Kiessling & Hamidreza Gohari Darabkhani & Abdel-Hamid Soliman, 2022. "The Bio Steel Cycle: 7 Steps to Net-Zero CO 2 Emissions Steel Production," Energies, MDPI, vol. 15(23), pages 1-22, November.
    5. Bożena Gajdzik & Radosław Wolniak & Wies Grebski, 2023. "Process of Transformation to Net Zero Steelmaking: Decarbonisation Scenarios Based on the Analysis of the Polish Steel Industry," Energies, MDPI, vol. 16(8), pages 1-36, April.

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