Green Steel, Shared Rules?

The steel industry is facing crucial turning points – both in terms of its climate impact and its industrial strategies. The key challenge in steel production is no longer identifying pathways to cleaner steel. Rather, the focus is now on creating the right investment conditions and demand signals required to scale up green steel production.

This is why standards for low-carbon steel are important: only with a reliable framework and clearly defined standards for what will be considered low-carbon steel in the future can steel producers make robust market forecasts – and these, in turn, form the basis for the forthcoming billion-euro investments in climate friendly steel production. Standards therefore achieve way more than just the classification of emissions: they create demand by reducing uncertainty for buyers and minimising the risks associated with major investments in low-carbon production technologies.

Shared Rules for Low-Carbon Steel? Comparing China and Europe Standards

With this in mind, Dr. Chun Xia-Bauer, Dr. Lukas Hermwille and Dr. Anna Leipprand from the Transformative Industrial Policy Research Unit at the Wuppertal Institute analyse two standards for low-carbon steel in China and Europe in their policy brief "Green Steel, Shared Rules?": the European Low Emission Steel Standard (LESS) and China’s "C2F Steel" standard. According to the researchers, the two standards are largely comparable from a technical perspective: Both support the transition to highly decarbonised primary steel and scrap-based steelmaking powered by renewable energy. While both follow a "sliding scale" approach, dynamically adjusting emissions-intensity thresholds according to the share of scrap used in production, significant differences remain in their system boundaries.

Thus, a full technical interoperability is unlikely in the near term. A more realistic step would be mapping and conversion tools that help firms, buyers and policymakers understand how products classified under one standard would be interpreted under the other. Such a framework would allow standards to coexist with less friction and greater trust. Current global alignment efforts are therefore worth continuing: While politically challenging, the authors argue that making standards work together is essential for building credible lead markets for low-carbon steel.

The policy brief "Green Steel, Shared Rules? A Closer Look at Low-Carbon Steel Labels in China and Europe" can be downloaded free of charge via the link below.