[ INTERVIEW ]
Shift one also explores the practical steps needed to achieve carbon reduction , broadening the discussion to include issues like carbon leakage . “ For example , what does carbon leakage mean , and how can we combat it ? Often , we look at emissions on a national level , but we need to consider the global impact ,” Mr . Erkkilä continued .
He explained that simply shutting down a steel plant may reduce emissions locally , but it does not solve the larger problem . “ The demand for steel remains , and if production moves to a country with less stringent environmental regulations , the overall emissions could be even higher . So how do we address this issue ? It has been recognized for some time , and mechanisms like the Carbon Border Adjustment Mechanism ( CBAM ), which is currently in a reporting phase and will fully roll out by 2026 , are being developed to tackle it . I am looking forward to seeing how CBAM evolves .”
The discussion around CBAM and carbon leakage naturally led us into the second shift : geopolitics . As the report highlights , steel has always held a dual identity — vital for both war and peace — and has historically carried political weight . “ In the 2000s ,
This photo of Outokumpu ’ s cold rolling mill in Germany reflects a future where environmental stewardship and industrial progress go hand in hand . Photo : Outokumpu Corporation
steel ’ s strategic importance seemed to diminish , largely due to globalization . While many countries benefited , challenges arose , especially as other producers struggled to compete with the cost efficiency of Chinese steel ,” Mr . Erkkilä observed .
“ Now , with rising protectionism , trade wars , and tensions between global and regional powers , the dynamics of the past 30 years are changing . Steel may once again be seen as a strategic resource ,” he emphasized .
We are now entering an era where the free flow of goods across global markets is being called into question . The vulnerabilities of global supply chains are becoming more apparent , especially in light of ambitious climate policies , which , according to the Center for Economic Policy Research , have often contributed to carbon leakage . This is precisely why the EU has implemented CBAM — a clear example of how sustainability efforts are becoming intertwined with geopolitics .
Circularity and demand
Shift three focuses on another essential element — circularity . Recycling is one of the key levers in decarbonization , but while steel recycling rates are already high , there is still room for improvement .
“ The bigger issue ,” Mr . Erkkilä pointed out , “ is that we are producing things that do not last . If products were designed to be more durable , the need to discard and replace them would decrease . We should be creating products with longevity in mind , emphasizing durability rather than feeding
24 Green Steel World | Issue 15 | November 2024