SBTi launches first science-based decarbonisation framework for steelmakers

The Science Based Targets initiative released the world's first science-based decarbonisation framework for the iron and steel industry, requiring over 91% cuts in direct emissions by 2050 versus 2021. The guidance gives Indian steelmakers, a major hard-to-abate sector, a credible 1.5°C-aligned target-setting roadmap.

The Science Based Targets initiative introduced the world's first science-based decarbonisation framework for the global iron and steel industry, enabling manufacturers to set emissions reduction goals tailored to the sector. The guidance requires a reduction of more than 91% in direct emissions by 2050 compared to 2021 to align with limiting warming to 1.5°C. Steel contributes up to 9% of global greenhouse gas emissions, and research warns that by 2040 as much as 14% of steel companies' value could be jeopardised by escalating carbon prices.

The framework affects primary and secondary iron and steel manufacturers, value chain participants such as iron ore suppliers and downstream steel buyers, and financial institutions. The guidance accounts for future global steel demand, data limitations, technology accessibility, and steel scrap availability when setting 1.5°C-aligned short- and long-term targets. More than 20 steel companies have already endorsed short-term science-based targets, 27 have committed to setting targets, and 19 have made net-zero commitments, with existing target-setters encouraged to recalibrate goals.

Steel companies should use the Steel Science-Based Target-Setting Guidance to establish short- and long-term targets aligned with 1.5°C, and those with existing targets should recalibrate ahead of regular update schedules. The methodology was co-developed with the Energy Transitions Commission under the Mission Possible Partnership and refined through an Expert Advisory Group, a two-month public consultation, and review. Steelmakers and financiers can monitor adoption of the framework to manage transition and carbon-price risk through 2050.

Key figure — Required emissions cut: more than 91% in direct emissions by 2050 versus 2021