During an event from the World Trade Organization – the Trade Forum for Decarbonization Standards, Aditya Mittal – the CEO of ArcelorMittal commented on the impact of decarbonizing the steel industry on the prices of steel.
He said that removing CO2 emissions from steel production would increase prices by about 10%-20%, which could make green producers’ business model inviable.
Mr Mittal expressed his view that the steel industry has low margins, therefore 10% to 20% increase in prices is “a lot”. “If someone comes in and undercuts, and then steel companies which are producing decarbonized steel will not have a viable business mode,” he added. He also pointed out that the cost of an average car would go up around $100-$200.
“In our preliminary estimates…the cost to decarbonize steel is not so prohibitive, so the system could take it. I think the cost of steel would go up 10 to 20%,” concluded Aditya Mittal.
Decarbonizing the economy and thus the steel industry as a substantial part if it, is critical for the 21st century to limit the worst effects of global warming like droughts, earthquakes, floods and decreased agricultural productivity that would drive up inflation. The global steel industry is responsible for approximately 7% of annual carbon dioxide emissions, therefore it is in an urgent need to reduce those emissions.