From Blast Furnace To Breakthrough: A New Future For The World’s Favorite Metal
There are three primary pathways to producing steel, each with its own emissions profile. Traditional primary steelmaking uses coal-fired blast furnaces and generates the highest emissions. Direct reduced iron (DRI) lowers emissions when iron ore is reduced using natural gas — and even more when clean hydrogen is used. Secondary steel relies on recycled scrap melted in electric arc furnaces, which can be powered by clean electricity — resulting in the lowest emissions.
Every building, car, appliance, and wind turbine has at least one thing in common: steel. It’s the backbone of modern life. It’s strong, it’s versatile, it’s cost-effective — and it’s a major driver of climate change. Steel production emits around 6% of global emissions, making it one of the highest-emitting industries on the planet. That’s because most steel still comes from blast furnaces that use coal, part of an emissions-intensive process that hasn’t fundamentally changed in centuries. And with global demand for steel set to rise, the challenge is only getting bigger. But steel’s high emissions also mean high leverage: cleaning it up could unlock one of the largest decarbonization wins of the century. From green hydrogen for direct reduced iron production to increased use of green electricity, innovators are racing to reinvent steel — and tap into a trillion-dollar opportunity to engineer a new net-zero world.
Using IPCC and GCAM data, Energy Innovation projected future “greenhouse gas emissions at stake” in 2050, assuming current policies remain in place. The resulting estimates overlap because different technologies may reduce the same emissions pool.
The Path We’re On
The backbone of the built world is buckling under its own carbon weight.
When it comes to metals, nothing beats steel. It’s the scaffolding of civilization as we know it — but most of that steel comes with a hidden cost: sky-high carbon emissions. Churning out 1.9 billion tonnes of steel each year is responsible for more than the emissions of all the world’s planes, ships, and freight trains combined.
The basic problem is how steel is made.
How is steel made?
For more than 3,000 years, humans have made steel by removing oxygen from iron ore using carbon — a process known as carbothermic reduction. While early steelmakers used charcoal, today’s dominant method relies on coal-derived coke. The basic chemistry, however, has barely changed since the Iron Age.
Global steel production is dominated by two main production routes.
Route 1: Blast Furnace-Basic Oxygen Furnace (BF-BOF)
Today, roughly 70% of global steel is produced via the blast furnace–basic oxygen furnace (BF-BOF) route. In a blast furnace, iron ore is heated with coke and limestone to produce molten pig iron. In this step, carbon serves two roles: it provides the intense heat required for smelting and acts as a chemical reducing agent, stripping oxygen from iron ore and eventually forming CO₂. As a result, BF-BOF steel typically emits around 2.3–2.7 tonnes of CO₂ per tonne of steel.
The pig iron is then refined in a basic oxygen furnace, where oxygen is blown through the molten metal to remove excess carbon and impurities, producing steel with a controlled composition. While this secondary step consumes energy and generates emissions, the majority of steel’s climate impact occurs during the initial iron ore–to–pig iron conversion.
Over decades, steelmakers have already captured most available efficiency gains within this pathway. Improvements to insulation, heat recovery, and process optimization now deliver only marginal emissions reductions. As long as carbon remains the reducing agent in ironmaking, the bulk of these emissions are unavoidable — not the result of inefficiency, but of chemistry.
Route 2: Electric Arc Furnace (EAF)
The remaining ~30% of global steel is produced primarily through electric arc furnaces (EAFs), which melt scrap steel — and in some cases direct reduced iron (DRI) — using electricity rather than coal. Where electricity is low-carbon and scrap is abundant (as in parts of the U.S. and Europe), this route has proven to be significantly less emissions-intensive. However, scrap availability, quality constraints, and rising global steel demand mean primary steelmaking remains unavoidable at scale — especially in fast-growing economies.
DRI is an alternative primary steelmaking technology to BF-BOF. While less emissions-intensive than a blast furnace, this method still uses methane as a reducing agent and currently requires high-grade ores, which limits DRI to roughly 5% of total global steel production.
In short, the steel sector is split between a dominant, carbon-locked pathway, and a cleaner but currently constrained alternative.
Steel comprises over 90% of total metal use. It’s the second most-produced engineered material in the world (after cement).
What makes the traditional steelmaking pathway so hard to decarbonize is also what creates an opening for change. In today’s dominant blast furnace process, carbon isn’t just a fuel — it’s consumed as part of the chemistry itself. A meaningful share of the ironmaking input is therefore lost as carbon dioxide, meaning emissions are structurally embedded in the process rather than the result of inefficiency or poor energy choices. After decades of optimization, most available efficiency gains have already been captured. That reality limits incremental progress — but it also creates an opportunity for fundamentally new approaches that are both more emissions-efficient and potentially more cost-effective.
There are also ways to reduce steelmaking emissions by using less of it. In some applications, like building, lower-carbon materials can substitute. But at the end of the day, there’s no getting rid of steel. In fact, our efforts to decarbonize the world will require even more of it. Wind turbines, solar farms, transmission lines, electric vehicles, mass transit, population-dense housing — they’re all brought to you by steel. Without cleaner steel, the math for a livable climate simply doesn’t add up.
A New Way Forward
Re-engineering the world’s workhorse metal
Pathways to more sustainable steel include using less and recycling more; cleaning the energy used in steelmaking; and capturing the emissions from steelmaking (see Engineered Carbon Removal). Steelmakers have already squeezed significant efficiency gains out of the age-old process, which means there’s opportunity for something bigger: entirely new ways of producing steel. The question is, can we invent new pathways for creating decarbonized steel that are even cheaper and more efficient?
We think the following imperatives and moonshot represent the most promising pathways for decarbonizing steel at scale.
Innovation Imperatives
Substitute alternative reducing agents in existing steelmaking processes
Replacing fossil-based reducing agents in current steelmaking methods can enable emissions reductions without radical shifts to the $1 trillion of steel industry infrastructure that already exists. Promising options include hydrogen for direct reduced iron (DRI) processes and alternatives to metallurgical coke in blast furnaces. Scaling these solutions can significantly lower the carbon intensity of steel production while leveraging much of today’s existing infrastructure, accelerating the transition to low-emission steel. To be impactful at scale, the cost of these reducing agents will need to compete with — and ideally beat — metallurgical coal and natural gas.
Develop novel reduction and separation processes that can use abundant iron ores without coal or natural gas
Decarbonizing primary steelmaking requires new ways to produce iron without fossil reductants. Promising approaches include direct electrification and electrochemical ironmaking, as well as molten-phase hydrogen-based reduction and advanced ore upgrading that expands the usable ore supply. However, some leading low-carbon routes (notably H₂-DRI) depend on high-quality ore inputs, which can make ore preparation a cost and scaling constraint. Across these pathways, a major barrier is the same: clean electricity (and, where relevant, clean hydrogen) must be cheap enough to compete with today’s incumbent steel routes.
Moonshots
Develop separations technology to manage impurities in secondary steel production
Steel is the world’s most recycled material — but limits still exist. The future potential of recycled steel is hampered by the buildup of impurities, particularly copper, which degrades quality and restricts the use of scrap in high-performance applications. A moonshot solution would develop advanced separation or purification technologies capable of removing these trace contaminants at scale, enabling endless recycling without loss of quality. If achieved, this would allow steel to circulate indefinitely in a closed loop, drastically reducing the need for virgin ore and slashing the emissions tied to primary steelmaking.
The most viable solutions will:
New steelmaking methods should work with a broad range of iron ores, not just high-grade ones.
Solutions, including electricity-intensive pathways, must be available at a price on par with today’s blast-furnace steel, without relying on carbon pricing or subsidies. assuming.
Steel is dominant for good reason: it’s strong, cheap, durable, weldable, and widely available. It’s easy to cast, form, and shape. Any solution hoping to disrupt steel’s dominance will deliver the same functional properties and downstream usability by being able to produce the same range of steel alloys as traditional methods.
The world has over $1 trillion in steelmaking assets — blast furnaces, casting facilities, and rolling mills. Ideally, new solutions will either slot into or repurpose that infrastructure.
Solutions must depend on feedstocks and inputs that are globally abundant and scalable to gigaton-level steel production, without creating new resource bottlenecks or unsustainable land-use demands.
Solutions must deliver a true step-change reduction in emissions intensity per tonne of steel, rather than incremental improvements to existing processes.
