Analysis reveals carbon tax incentivizes low-carbon technology in Stelco's steel production, highlighting the role of government financial incentives in transitioning the industry.
Against increasing global climate change, high-emission industries such as steel manufacturing are facing unprecedented pressure to transform. Canada has implemented a federal carbon tax policy since 2019, which aims to push companies to reduce emissions through market mechanisms. This study analyzes Stelco Holding Inc.'s green transformation, examining the impact of carbon tax on the steel industry. The research employs literature analysis, policy interpretation, and case studies, revealing that carbon tax increases operational costs but incentivizes low-carbon technology investments, including hydrogen-based ironmaking, Electric Arc Furnace (EAF), and Carbon Capture and Storage (CCS). Government financial incentives, such as Strategic Innovation Fund (SIF) and Net Zero Accelerator (NZA), facilitate green technology transitions. Despite challenges like capital pressures and global competition, carbon taxes and policy support drive green transformation. The paper concludes with policy recommendations for balancing environmental and economic objectives.
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Yumei Xu (2025) studied this question.
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