By Editorial Staff – 10/13/2026

The multinational’s experience reflects the challenge of balancing emissions reductions without compromising competitiveness, commercial viability, and industrial capacity. It is an important issue, but one that has remained secondary to more powerful market forces.

The discussion around low-carbon steel still runs into the issue of price. Will customers accept paying more? With stricter emissions rules and new trade barriers, the industry will have to secure the low-carbon iron that will supply the furnaces of the future.

Currently, steel production accounts for approximately 8% of global greenhouse gas emissions. Conventional production remains heavily dependent on coal, making the sector one of the largest industrial sources of carbon emissions. However, as rules governing carbon-intensive production become stricter, the economic consequences of emissions will become increasingly significant.

Increasingly, emissions will weigh on access to markets. Steel with a lower carbon footprint tends to face lower costs related to emissions. More polluting steel, on the other hand, will be more exposed to tariffs, quotas, and other trade barriers.

At the International Iron Ore & Green Steel Summit in Barcelona, discussions with original equipment manufacturers (OEMs) in the automotive sector and major European steel producers highlighted growing demand for information on carbon dioxide equivalent (CO₂e) emissions at every stage of the value chain.

The European Union’s carbon levy on imports (CBAM) assigns a cost to emissions associated with imported products. The European bloc also adopts trade measures to protect its industry from excess capacity, carbon leakage, and unfair competition.

The United States has been following a similar path regarding imported steel. Although the policies are different, both point in the same direction. More polluting steel tends to face higher costs and more barriers to entering these markets.

Japan is also moving in this direction. The Japanese government recently announced US$1.1 billion to support the decarbonization of JFE Steel. The initiative adds to the European Union’s CBAM and Japan’s Green Transformation policy, known as GX. Taken together, these measures demonstrate a broader shift.

Governments are placing greater value on emissions reductions and creating incentives for the use of less-polluting materials.

This evolution changes the terms of the comparison. The choice may no longer be between conventional steel and a green alternative, in a simplistic comparison of whether it costs 20% or 30% more.

Increasingly, the difference will be between steel with a lower carbon footprint, which may face lower emissions-related costs and fewer trade barriers, and more polluting steel, which is subject to tariffs, quotas, and carbon costs.

Electric arc furnaces are essential to this transition, but they need metallic raw materials to feed them. Scrap will play an important role, but it is unlikely to be sufficient to meet global demand for primary iron, especially as steel consumption grows in emerging economies.

Direct reduced iron (DRI) and hot briquetted iron (HBI) will become increasingly important. This creates a strategic opportunity for countries capable of combining high-quality iron ore, renewable energy, and modern processing technology.

Brazil is well positioned to compete. Its high-quality mineral resources and renewable energy generation potential could enable the production of lower-carbon iron for steelmakers in Europe and other markets. Projects under development in Brazil demonstrate this potential.

According to an assessment by Bureau Veritas, one of these projects is expected to achieve, by 2034, a carbon factor of approximately 0.14 tonnes of CO₂e per tonne of HBI. Independently assessed data such as these will become increasingly important for steelmakers, investors, and regulators as carbon gains a clearer economic value.

Brazil and Europe can complement each other’s advantages. Brazil has the conditions to produce low-carbon iron at competitive prices.

Europe, in turn, has an established steel industry and strong capabilities in the engineering and automotive sectors. With imported HBI, European EAFs could take advantage of this combination, while each region contributes what it does best.

* Guy Saxton is President of Brazil Iron.

Articles published by CNN Infra seek to encourage debate and reflection and to shed light on perspectives concerning the main challenges, problems, and solutions facing Brazil and other countries around the world. The articles published in this section do not necessarily reflect CNN Brasil’s views.

Source: www.nortaonoticias.com.br