An interview with MK Daily: Korea’s steelmakers must prepare for the EU’s carbon tariffs

The Climate Group

Our CEO, Helen Clarkson sat down with South Korean news outlet, MK Daily, to discuss the big questions such as, how will trade restrictions such as the EU’s CBAM will impact South Korea’s important steel exports? What are the key steel decarbonisation trends for 2024? What are the benefits of SteelZero membership to businesses? Find the answers and more below.

South Korea is the world’s sixth-largest producer of crude steel. What is the relationship between Korean steel manufacturing and consumption companies and Steel Zero?

SteelZero has more than 40 members around the world, including major automakers, construction companies, and energy companies. Volvo Cars, Maersk, Ørsted, and Vattenfall are representatives.

The world’s major steel-buying countries and companies have pledged to purchase and use 100% carbon-neutral steel by 2050 at the latest. They are demanding more and more clean steel. Steel producers who can’t supply clean steel risk being left behind.

It is becoming clearer that Korean companies that consume steel will also need to secure eco-friendly products in order to be competitive. Governments around the world are starting to regulate steel production, and investors are increasing their eco-friendly investments. SteelZero is expected to grow in the local market as much as RE100, which has been invested by many large Korean companies.

How will trade restrictions such as the EU’s CBAM affect Korea’s steel exports to Europe? I wonder if you think it will affect other trade restrictions as well.

According to the Korea Institute of Energy Research, as of 2018, greenhouse gas emissions from the steel industry accounted for 13.3% of Korea’s total emissions. South Korean steel companies export more than one-third of their steel, so trade regulations such as the EU’s CBAM are very important. It is expected that such regulations will spread to the world’s major steel markets.

Why did Climate Group launch Steel Zero following RE100, an initiative related to electricity generation?

Climate Group has initiatives such as ‘Concrete Zero’, which aims to decarbonize concrete production, and ‘EV100’, which aims to achieve net zero in the transportation sector. The areas in which we are advancing our mission are focused on the sectors that emit the most carbon. In order to make a bigger impact with the same effort.

What are the decarbonization trends in the global steel market in 2024?

I am confident that there will be an unprecedented level of interest in decarbonization. In the past year, we’ve seen a number of companies, such as automakers, contract with steel producers to secure low-carbon steel.

This year, more steel producers will launch “green steel” brands, and more companies will try to purchase the most reliable of these products. In addition, the CBAM preparation period initiated by the EU is changing the landscape of the global steel industry, including Korean companies. Steelmakers are also recognizing the need to prepare.

What are the benefits of companies joining SteelZero?

First of all, it is possible to increase the purchasing power of carbon-free and low-carbon steel. For example, an official from Swedish automaker SKF, a member of SteelZero, said: “We are already working with steel suppliers, but there is a limit to what one company can do.” SKF said that the increase in purchasing power by joining SteelZero is attractive. There is also an opportunity to share their experiences with companies that have already tried to purchase carbon-neutral steel.

The decarbonization of the steel industry will ultimately depend on global steel producers being able to produce enough carbon-free steel. Where do you think you’re at in terms of production?

In 2020, when Steel Zero was launched, steel companies did not talk about carbon neutrality at all. Now, just four years later, decarbonized steel is the talk of the town. Vendors, customers, investors, and policymakers alike are looking for ways to do it.

Of course, progress is sometimes slow, and the level varies from country to country. However, there are demands from member states, government regulations and incentives, and technological innovation. As we get closer to 2030, we believe that steel manufacturers will be able to meet the demand for carbon-neutral steel.

This article was originally published, in Korea, by MK Daily.

/Public Release. View in full here.