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March 12, 20260 citationsOpen Access

Two Worlds - Carbon Pricing Splits Steel Industry

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AKAndrzej M. Kotas

Key Points

  • The research aims to examine how carbon pricing impacts the global steel industry, creating divergent systems.
  • Analysis of carbon pricing effects in the EU, India, and the Middle East
  • Evaluation of strategic options from China's green steel pilots
  • Assessment of CBAM implications for steel imports
  • EU faces significantly higher carbon costs compared to India and the Middle East
  • China's investments in green steel represent only a small fraction of total capacity
  • CBAM is projected to create a substantial cost barrier for high-carbon imports starting in 2026

Abstract

Carbon pricing creates two incompatible steel systems. EU faces €200+ per tonne carbon costs whilst India/Middle East operate with zero constraints. China's 15-20 billion green steel pilots (2% capacity) alongside conventional expansion creates strategic optionality. CBAM imposes 25-30% cost barrier on high-carbon imports from 2026. China's 2030-2032 policy decision determines if global convergence occurs by 2035.

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Cite This Study

Andrzej M. Kotas (2025) studied this question.

synapsesocial.com/papers/69b2584996eeacc4fcec7c54https://doi.org/10.5281/zenodo.18925210
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