Steel underpins buildings, transport, appliances, and clean‑energy infrastructure. In 2026, the industry is being reshaped by decarbonization technology, tighter trade rules, and growing demand for credible product‑level emissions data (Allwood et al., 2011; Wang et al., 2021).

International

Most steel is produced via two routes:

• BF–BOF (blast furnace–basic oxygen furnace): makes iron from ore using carbon, then refines it to steel.
• EAF (electric arc furnace): melts scrap and/or iron units (DRI/HBI) using electricity.

Recycling is essential, but not unlimited. Scrap supply depends on the age of steel already in use (Pauliuk et al., 2013), and quality can be constrained by “tramp” elements such as copper that are difficult to remove once mixed into steel (Daehn et al., 2017). Many roadmaps therefore pair EAF growth with DRI—often gas‑based today and hydrogen‑ready for the future (Hasanbeigi et al., 2014; Vogl et al., 2018). Alongside new technology, material efficiency—using less steel for the same service through better design, longer lifetimes, and reuse—reduces pressure on primary production (Allwood et al., 2011).

Local

Policy signals are spreading. Thailand, for example, approved a carbon tax of 200 baht per ton of emissions (implemented through the oil excise tax structure) (Reuters, 2025).

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Regulations

Carbon‑linked trade rules are now a practical steelmaking issue:

• EU CBAM: Rules enter into effect on 1 January 2026 with importer authorization requirements (European Commission, 2025). Amendments adopted in 2025 set certificate sales from 1 February 2027, aligning purchases with embedded emissions from 2026 imports (European Parliament & Council of the European Union, 2025).
• UK CBAM: Starts 1 January 2027; indirect emissions are delayed until 2029 at the earliest (HM Treasury, 2025).

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Technology trends

The “next steel” toolkit is increasingly modular (Fischedick et al., 2014; Rootzén & Johnsson, 2016):

• EAF modernization + cleaner power (Wang et al., 2021).
• DRI–EAF (hydrogen‑ready) for deep cuts (Vogl et al., 2018).
• CCUS and stepwise upgrades where BF–BOF remains (Tonomura et al., 2016; Hasanbeigi et al., 2014).

What major players are signaling:

• ArcelorMittal: decarbonization investment depends on policy clarity and economics (ArcelorMittal, 2024).
• POSCO: HyREX as part of a staged roadmap (POSCO, 2025).
• Nippon Steel: portfolio approach across EAF, hydrogen, and CCUS (Nippon Steel, 2024).
• Rio Tinto: high‑grade DR pellets and ultra‑low‑carbon HBI supply chains (Rio Tinto, 2024).
• Vale: iron‑ore briquettes aimed at reducing sintering‑related emissions (Vale, 2023).
• Baosteel / China Baowu: commercial‑scale hydrogen‑based DRI trials (BHP, 2025).

Practical checklist for sourcing steel in 2026 (what we look for with customers):

• Route transparency: BF–BOF, EAF, or DRI–EAF—and why it fits the application.
• Feedstock clarity: scrap share, DRI/HBI use, and key impurity controls (Daehn et al., 2017).
• Emissions method: consistent site/product‑level measurement and auditable records (IEA, 2023). (IEA)
• Trade readiness: documentation aligned to CBAM‑style reporting needs.

Steelmaking is moving toward “quality + proof.” Suppliers that can deliver metallurgical performance and auditable documentation (route, chemistry, embedded emissions) will be best positioned. We stay at the forefront by tracking technology roadmaps and trade requirements, then translating them into reliable supply options and clear data for customers.

Hot red graphite electrodes in steel mill workshop. Electric arc furnace area at iron foundry.

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Definitions

• Embedded emissions (embodied carbon): GHG released to make a material (often tCO₂e per tonne of steel).
• BF–BOF: ore‑based steelmaking via blast furnace and basic oxygen furnace.
• EAF: electric arc furnace (melts scrap/DRI using electricity).
• DRI / HBI: direct reduced iron / hot briquetted iron—virgin iron units used in EAF steelmaking.
• CCUS: carbon capture, utilization and storage.
• CBAM: carbon border adjustment mechanism—rules linking imports to embedded emissions.

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References (APA)

Allwood, J. M., Ashby, M. F., Gutowski, T. G., & Worrell, E. (2011). Material efficiency: A white paper. Resources, Conservation and Recycling, 55(3), 362–381.

ArcelorMittal. (2024, November 26). ArcelorMittal provides update on its European decarbonization plans [Press release].

BHP. (2025, May 11). BHP and China Baowu celebrated successful commercial-scale DRI trials using BHP’s Pilbara iron ores [Company news release].

Daehn, K. E., Cabrera Serrenho, A., & Allwood, J. M. (2017). How will copper contamination constrain future global steel recycling? Environmental Science & Technology, 51(11), 6599–6606.

European Commission, Directorate-General for Taxation and Customs Union. (2025, December 23). Reminder: CBAM goes live on 1 January 2026 [News article].

European Parliament and Council of the European Union. (2025, October 17). Regulation (EU) 2025/2083 amending Regulation (EU) 2023/956 as regards simplifying and strengthening the carbon border adjustment mechanism. Official Journal of the European Union.

Fischedick, M., Marzinkowski, J., Winzer, P., & Weigel, M. (2014). Techno-economic evaluation of innovative steel production technologies. Journal of Cleaner Production, 84, 563–580.

Hasanbeigi, A., Arens, M., & Price, L. (2014). Alternative emerging ironmaking technologies for energy-efficiency and CO₂ emissions reduction: A technical review. Renewable and Sustainable Energy Reviews, 33, 645–658.

HM Treasury. (2025, November 28). Factsheet: Carbon border adjustment mechanism (CBAM) [Policy paper].

International Energy Agency. (2023, April 4). Emissions measurement and data collection for a net zero steel industry [Report].

Nippon Steel Corporation. (2024, September 2). Carbon Neutral Vision of Nippon Steel [Presentation].

Pauliuk, S., Milford, R. L., Müller, D. B., & Allwood, J. M. (2013). The steel scrap age. Environmental Science & Technology, 47(7), 3448–3454.

POSCO. (2025, October 29). From CCUS to HyREX: The full lineup of POSCO Group’s decarbonization strategies for a sustainable steel industry [Newsroom article].

Reuters. (2025, January 21). Thai cabinet approves collection of carbon tax. Reuters.

Rio Tinto. (2024, November 15). Rio Tinto and GravitHy join forces to accelerate the decarbonisation of steelmaking in Europe [Press release].

Rootzén, J., & Johnsson, F. (2016). Managing the costs of CO₂ abatement in the steel industry. Energy Policy, 98, 459–469.

Tonomura, S., Kikuchi, N., Ishiwata, N., Tomisaki, S., & Tomita, Y. (2016). Concept and current state of CO₂ ultimate reduction in the steelmaking process (COURSE50) aimed at sustainability in the Japanese steel industry. Journal of Sustainable Metallurgy, 2, 191–199.

Vale. (2023, August 31). Vale begins load tests in the first iron ore briquette plant in Brazil [Press release].

Vogl, V., Åhman, M., & Nilsson, L. J. (2018). Assessment of hydrogen direct reduction for fossil-free steelmaking. Journal of Cleaner Production, 203, 736–745.

Wang, P., Ryberg, M., Yang, Y., Feng, K., Kara, S., Hauschild, M., & Chen, W.-Q. (2021). Efficiency stagnation in global steel production urges joint supply- and demand-side mitigation efforts. Nature Communications, 12, 2066.