What question did this study set out to answer?

The research aims to examine how carbon pricing impacts the global steel industry, creating divergent systems.

March 12, 2026Open Access

Two Worlds - Carbon Pricing Splits Steel Industry

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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