Problemi Ekonomiki (Mar 2020)
Decarbonization of the Steel Industry: the Role of State Economic Policy
Abstract
The aim of the article is to analyze the potential areas of decarbonization of steel production in order to propose government policy measures for reducing CO2 emissions. The study examines the structure of global carbon dioxide emissions, the trends in CO2 emissions from the steel industry, and the environmental policies of the EU and China. Moreover, economic and technological factors complicating the decarbonization of the steel industry are characterized. The main sources of carbon dioxide emissions at steel-producing enterprises are considered. Using the example of a European company, the volume of capital investment for decarbonization of steel production is shown. The key groups of measures that can help solve the problem of CO2 emissions (carbon capture and storage, carbon capture and utilization, prevention of emissions) are identified. The possibilities and limitations for the application of specific decarbonization measures including melting steel in electric arc furnaces, replacing coke with charcoal, using hydrogen in a blast furnace and for direct reduction of iron, and employing electrolysis of iron are analyzed. The carbon intensity of various decarbonization technologies as well as the potential terms for their commercial implementation are compared. As a result of the study, instruments of economic policy for accelerating the decarbonization of the steel industry are identified. The advantages and disadvantages of these instruments are analyzed. The conclusion about the impossibility of decarbonization without state participation, due to the fact that enterprises in the free market do not receive sufficient competitive advantages from investments to considerably reduce CO2 emissions, is made. The prospects for further research are associated with an in-depth study of the instruments of state policy for decarbonization as well as development of directions for decarbonization of other sectors of the economy.
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