Deep decarbonisation of iron and steel industry in the age of global supply chain– issues and solutions

Deep decarbonisation of the global manufacturing sector is needed to achieve the climate targets under the Paris Agreement. As of September 2019, 77 countries have announced targets to be carbon neutral by 2050. However, in the age of
globalisation, countries are concerned that decarbonisation leads to cost increases for industries, companies will move their production bases to countries with less strict energy efficiency and greenhouse gas (GHG) emission regulations. Such relocation of production base can demotivate countries to implement rigorous policies for industry decarbonisation and cause leakage, reducing the global impacts of decarbonisation. This paper uses the iron and steel industry as an example to check: 1) to what extent the above statement is true; and 2) how to address this global chain and cross-border issue in the decarbonisation of industries.