ABU DHABI, 4th August, 2023 (WAM) — The International Renewable Energy Agency (IRENA) affirmed that the steel sector is among the most significant contributors to climate change, responsible for about 7 percent of global energy-related carbon emissions. In its recent outcome document, the G20, at its Ministerial Environment and Climate Ministers’ Meeting, recognised “that the steel sector is fundamental for comprehensive economic development, especially in developing countries, yet its environmental footprint has been and continues to be of concern”.
In partnership with the Indian G20 Presidency, IRENA launched a comprehensive report on transitioning to a circular steel sector. Titled ‘Towards a Circular Steel Sector’, the report provides an overview of the key factors driving the environmental impact of steel products, and related pillars for increased circularity in the sector.
G20 countries, which represent the world’s largest economies, produce about 85 percent of the world’s steel and are responsible for consuming about 80 percent of it. Coordinated action by the G20 countries can address the challenges and opportunities of the sector, enabling its transition towards a more circular steel industry, one of the key priorities set forth by the Indian G20 Presidency.
“Adopting the circular principles, accompanied by renewables-based technologies, as presented in this report can help close the loop in the material value chain of steel and reduce greenhouse gas emissions from the sector,” stated IRENA Director-General Francesco La Camera in the report. “By working together, the G20 can lead the way in implementing circularity by fostering the exchange of best practices, removing trade barriers, and establishing common standards for sustainable steel production.”
The report highlights the importance of circularity in the iron and steel sector and presents strategies to help establish an innovative approach to improving the sustainability of the sector. According to IRENA’s analysis, achieving a circular steel sector requires improved material and process efficiency; increased steel recycling; and the adoption of renewable energy sources for steel production.
IRENA also underscored the fact that the transformation of the steel sector not only requires fundamental action at the national level, but also international dialogue and cooperation in the G20, which is key to advancing progress aligned with all pillars of circularity.
The report lists the following key cooperation areas between G20 countries that can accelerate progress:
– Cooperation in the G20, to identify and scale best practices in the major steel-consuming sectors, through mutual learning and exchange of regulatory experience, can contribute to the more efficient use of steel globally.
– Dialogue and cooperation in the G20 can contribute towards removing the barriers to the international scrap trade, allowing scrap to be transported and used where it creates the most economic and environmental value.
– G20 members can facilitate the exchange of best practices among national policymakers and regulators. These discussions may focus on preventing market distortions that disincentivise investments in energy efficiency projects.
– G20 members can cooperate through dialogue towards internationally agreed definitions, standards, and certifications for renewables-based and low-carbon steel; initial demand creation through multilateral public procurement commitments; knowledge exchange on technology research and development; professional skills needed for the transition; and technical and financial assistance to developing countries, among others.