Lead markets for a resilient and climate-neutral steel industry

The steel industry has embarked on a demanding transformation. Politicians are supporting the sector with large subsidy packages and the development of the necessary energy infrastructure. In addition to making hydrogen and renewable energy available in sufficient quantities and at affordable prices, work is also needed to establish the climate-friendly lead markets of the future. 

To address the temporary price difference, lead markets must be artificially segmented to separate climate-friendly products from conventional fossil steel grades. To make these lead markets transparent and fair, a universal standard is required, as proposed by the German Steel Association in its Low Emission Steel Standard (LESS). The Federal Ministry for Economic Affairs and Climate Action has incorporated the initiative from the steel industry into its concept ‘Lead markets for climate-friendly basic materials’. This position paper evaluates the LESS and the Federal Government's concept paper from a climate and development policy perspective, and makes policy proposals for the concrete implementation of future-proof lead markets in the steel industry.