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Synergies and trade-offs between climate and circular economy policies in the steel industry

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  • Calzadilla, Alvaro
  • Winning, Matthew
  • Domenech, Teresa

Abstract

A pathway towards 1.5°C requires substantial economic, societal and technological transformations (IPCC 2018). All sectors require deep and immediate emissions reductions. Heavy industry (steel, cement and chemicals) and heavy-duty transport (trucking, shipping and aviation) are responsible for around one-third of global CO2 emissions (ETC 2018). However, reducing emissions in these hard-to-abate sectors requires policy makers to support the development and diffusion of carbon-neutral technologies and align decarbonisation strategies to global and regional sustainable development pathways. We use an updated version of the ENGAGE-Materials model to assess different strategies and technology options in the iron and steel sector to achieve decarbonisation and a sustainable use of resources. Our results show that an enhanced circularity and the availability of new low-carbon technologies in the steel sector help reduce the costs of decarbonisation. Furthermore, the introduction of a global carbon price that limits fossil fuel use and the associated greenhouse gas emissions motivates the steel industry to move towards a more circular use of steel.

Suggested Citation

  • Calzadilla, Alvaro & Winning, Matthew & Domenech, Teresa, 2022. "Synergies and trade-offs between climate and circular economy policies in the steel industry," Conference papers 333480, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333480
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    References listed on IDEAS

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    1. Chris Bataille, 2020. "Low and zero emissions in the steel and cement industries: Barriers, technologies and policies," OECD Green Growth Papers 2020/02, OECD Publishing.
    2. Nechifor, Victor & Calzadilla, Alvaro & Bleischwitz, Raimund & Winning, Matthew & Tian, Xu & Usubiaga, Arkaitz, 2020. "Steel in a circular economy: Global implications of a green shift in China," World Development, Elsevier, vol. 127(C).
    3. Valentin Vogl & Max Åhman & Lars J. Nilsson, 2021. "The making of green steel in the EU: a policy evaluation for the early commercialization phase," Climate Policy, Taylor & Francis Journals, vol. 21(1), pages 78-92, January.
    4. Joeri Rogelj & Alexander Popp & Katherine V. Calvin & Gunnar Luderer & Johannes Emmerling & David Gernaat & Shinichiro Fujimori & Jessica Strefler & Tomoko Hasegawa & Giacomo Marangoni & Volker Krey &, 2018. "Scenarios towards limiting global mean temperature increase below 1.5 °C," Nature Climate Change, Nature, vol. 8(4), pages 325-332, April.
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    Keywords

    Environmental Economics and Policy; Resource /Energy Economics and Policy;

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