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21 Sep, 2023

World's Steel Industry Embraces 1.5°C Science-Based Decarbonization Guidance

The steel industry, known for its significant carbon footprint, is undergoing a transformative shift towards sustainability. With the release of the world's first-ever 1.5°C science-based decarbonization guidance, the steel sector is poised to play a crucial role in achieving global climate goals. This groundbreaking initiative, led by the Science Based Targets initiative (SBTi), provides companies in the steel industry with a clear pathway to reduce their greenhouse gas emissions and contribute to a low-carbon economy.

The Importance of Science-Based Targets

Science-based targets (SBTs) have emerged as a powerful tool for organizations to align their emission reduction efforts with climate science. By setting ambitious and measurable targets, companies can significantly contribute to the global effort to limit global warming to 1.5°C above pre-industrial levels, as outlined in the Paris Agreement. SBTs provide a roadmap for companies to future-proof their growth by specifying the necessary emission reductions and timelines.

The Science Based Targets initiative, a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UNGC), champions science-based target setting as a means to enhance organizations' competitive advantage in the transition to a low-carbon economy. This initiative has gained significant traction, with hundreds of the world's largest companies committing to set science-based targets.

The Steel Sector's Carbon Challenge

The steel industry is one of the most energy- and carbon-intensive sectors globally. In 2019, the sector's direct CO2 emissions amounted to 2.6 Gt, accounting for 7% of total energy sector emissions and 28% of industrial emissions. When indirect emissions are considered, the total rises to approximately 3.6 Gt. Additionally, steel production is projected to increase by approximately 30% by 2070, further exacerbating its environmental impact.

Recognizing the urgent need to curb emissions in the steel sector, the SBTi has developed the Steel Science-Based Target-Setting Guidance. This comprehensive framework provides companies in the steel sector, as well as stakeholders such as the automotive industry, with a methodology to set 1.5°C-aligned near- and long-term climate targets at a corporate level.

The Steel Science-Based Target-Setting Guidance

The Steel Science-Based Target-Setting Guidance offers a granular methodology that enables companies to align their emissions reduction targets with the carbon budget of the steel sector. It incorporates differentiated pathways based on the input of scrap, a mandatory scope 3 target covering upstream emissions from fuels, and a stepwise approach to the target-setting process.

To facilitate the implementation of the guidance, the SBTi has also developed the Steel Science-Based Target-Setting Tool. This tool allows companies to model their targets at the sub-sector level and integrate sub-sector level targets at the company level. It provides companies with the necessary resources and guidance to set ambitious and achievable science-based targets.

The Benefits of Science-Based Targets in the Steel Sector

Companies that adopt science-based targets in the steel sector can unlock several benefits. Firstly, setting science-based targets fosters innovation by driving companies to develop new technologies and processes that reduce emissions. This commitment to sustainability also strengthens investor confidence and reduces regulatory uncertainty, positioning companies for long-term success in a rapidly evolving market.

Furthermore, companies that embrace science-based targets enhance their competitiveness by aligning their business strategies with the global transition to a low-carbon economy. They can differentiate themselves from their peers, attract environmentally conscious customers, and demonstrate their commitment to sustainability. Science-based targets also contribute to the achievement of the United Nations Sustainable Development Goals, further enhancing a company's reputation and social impact.

The Collaborative Effort Behind the Guidance

The development of the Steel Science-Based Target-Setting Guidance was a collaborative effort involving various stakeholders. The Science Based Targets initiative served as the project lead and convener. The Energy Transitions Commission (ETC) acted as the technical partner, providing expertise in the development of the project. An Expert Advisory Group (EAG), consisting of technical experts from stakeholder organizations and companies, contributed to the project execution.

The guidance also underwent a rigorous public consultation process, allowing industry and non-industry representatives to provide feedback and ensure its effectiveness and relevance. This collaborative approach ensures that the guidance reflects the unique context and challenges of the steel sector, making it a valuable resource for companies seeking to reduce their emissions.

The Path Forward for the Steel Industry

The release of the Steel Science-Based Target-Setting Guidance marks a significant milestone in the steel industry's journey towards sustainability. It provides companies in the sector with a clear roadmap to reduce their emissions and align with the 1.5°C goal of the Paris Agreement. By adopting science-based targets, the steel industry can accelerate its transition to a low-carbon economy, mitigate the environmental impact of its operations, and contribute to global climate goals.

Moving forward, it is crucial for companies in the steel sector to embrace the guidance, set ambitious targets, and develop robust decarbonization strategies. By taking decisive action, the steel industry can lead the way in driving sustainable innovation and fostering a net-zero future. The Science Based Targets initiative will continue to support and guide companies in their sustainability journey, ensuring a collective effort to combat climate change.


The steel industry's adoption of science-based targets represents a significant step towards a sustainable and low-carbon future. The Steel Science-Based Target-Setting Guidance provides companies in the sector with a comprehensive framework to set ambitious and achievable emission reduction targets aligned with the 1.5°C goal of the Paris Agreement.

By embracing science-based targets, the steel industry can drive innovation, attract investors, and enhance its competitiveness in a rapidly changing market. The collaborative effort behind the guidance ensures its relevance and effectiveness in addressing the unique challenges of the steel sector.

As the steel industry sets its sights on decarbonization, the Science Based Targets initiative will continue to play a crucial role in providing guidance, resources, and independent assessment of companies' targets. Together, we can build a sustainable future and create a world where economic growth and environmental preservation go hand in hand.

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