Policy Resource:

Toward a Tradable, Low-Carbon Product Standard for Steel

This working paper by the World Resources Institute (WRI) explores the idea of setting a low-carbon product standard for steel in the United States. It offers recommendations on how to set an effective standard that can drive decarbonization in the steel industry, including: what products should be covered, how to set a benchmark, reporting and compliance requirements, how to address the risk of leakage and competitiveness, and more.

The United States must significantly decarbonize every aspect of its economy, including the industrial sector. Innovative policies will be required to provide strong incentives and to drive U.S. manufacturers to adopt technologies and practices that will lead to a reduction in industrial greenhouse gas (GHG) emissions. In recent decades, the United States has significantly shifted its production of steel from processes with high emissions intensities to ones with lower emissions intensities that predominantly use recycled steel as an input. However, steelmaking still accounts for over 80 percent of direct emissions due to metals manufacturing (EPA 2021), 5 percent of industrial emissions, and approximately 1.5 percent of total GHG emissions in the United States (EPA 2020b). Furthermore, steel production is estimated to account for 8 percent of global emissions, so it is important for global leaders in steel production, such as the United States, to take the lead in reducing steel emissions.