Collaboration across sectors, between steelmakers and investors necessary to develop a roadmap for a structured green transformation of Asia’s steel sector

19 October 2023
AIGCC convened a special closed-door, Chatham House roundtable in October 2023. The roundtable particularly discussed ways to create an enabling environment for a structured green transformation of Asia’s steel sector.

AIGCC has published insights from steelmakers and investors on the credible transition pathways to decarbonise Asia’s steel sector. They come from a special closed-door, Chatham House roundtable convened by AIGCC in October 2023.

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Investors and steelmakers have identified some key opportunities to accelerate decarbonisation in Asia’s steel industry.

As Asia has a dominant role as the global supplier of steel, producing approximately 70 per cent of global steel, these opportunities have the potential to make a strong contribution to climate action, given that the global steel industry accounts for more than 7 per cent of annual COemissions.

The roundtable particularly discussed ways to create an enabling environment for a structured green transformation of Asia’s steel sector.

  • Investors noted the importance of increased transparency and disclosures on the status of decarbonising technologies. Such information would give investors the confidence to efficiently allocate capital to the appropriate companies and projects with appropriate return and duration expectations.
  • Participants noted that nearby availability of abundant renewable energy, and the production of green hydrogen are crucial up-stream factors for green steel production.
  • The industry has also called for stronger policy signals amidst uncertainties with emerging technologies and incentives for trade.

Decarbonising technologies for the steel industry

The current technologies for net zero steel exist with varying levels of technological readiness. While there is consensus that there is no single pathway to net zero steel in Asia, peer-to-peer and cross-sectoral collaboration will accelerate the transition to net zero.

Investors identified that steelmakers could take several actions to become more attractive, in particular:

  • Establish a clearer, time-bound, comprehensive definition of “transition technologies for steel” from steelmakers, to ensure a shared understanding and effective decision-making across the industry.
  • Have greater disclosures and transparency on the commercial viability of decarbonising technologies at different Technology Readiness Levels (TRLs), in order to overcome technological barriers for such technologies.
  • Increase peer-to-peer sharing of technological know-how and cross-sectoral collaboration to overcome challenges with the scaling up of emerging technologies.
    • For example, peer collaboration to scale-up emerging technologies, or engagement with the utilities industry to include more green hydrogen and renewable energy, thus reducing direct emissions early in the ironmaking process.

The green steel transition is a collaborative group effort and investors are looking for signals that the green transition is taking place.

Stronger policy signals needed

Participants noted that a forward-thinking approach, with a focus on long-term net zero solutions to support Asia’s leadership in meeting climate goals, is essential to address Asia-specific opportunities and challenges in the context of green steel production. Steelmakers may face market-specific constraints in their journey towards net zero.

To help overcome technological and financial barriers, investors identified potential policies that could stimulate collaboration across markets for the development of a green steel value chain:

  • Establish policies to enable cross-border trading of scrap steel as a commodity to incentivise green steel production
  • Have stronger carbon pricing signals to factor in embedded cost for fossil fuels
  • Enable green procurement policies with more structured demand and commitment from steel purchasers, which would contribute to an overall affordability of green steel.

Policymakers could pave the way forward by creating clear and consistent policies that provide investment certainty.


Hisaya Kambayashi, Senior Stewardship Officer, Sumitomo Mitsui Trust Asset Management said: “The unique opportunity brought about by this dialogue with steelmakers across Asian markets has enabled a cross-pollination of ideas and created a platform for dialogue on relevant industry-wide incentives. This includes policies to facilitate the trading of scrap steel as part of the industry’s transformation across the region and considerations to mobilise energy intensive processes close to sources of renewable energy. Investors share expectations for transparency from steelmakers as they develop their roadmap to transition using emerging technologies.”

Valerie Kwan, Director of Stewardship and Corporate Engagement, AIGCC said: “This roundtable is a first of its kind bringing together Asian steelmakers and investors to discuss industry-wide actions required to future-proof the Asian steelmaking industry in the global accelerated transition to net zero. With deeper appreciation of existing efforts and gaps within the industry, investors are well positioned to advocate for supportive policies and financing incentives to strengthen the development of a green steel value chain.”

AIGCC will continue to facilitate similar forums to complement the support for investor and corporate action as part of Climate Action 100+ sector engagements, with an aim to overcome barriers and capitalise on opportunities available in the transformation of the steel sector.