Sectoral Approaches in the Case of the Iron and Steel Industry

Sectoral approaches are discussed widely in international negotiations, governments and research institutes, because they are considered to enhance greenhouse gas mitigation and address competitiveness concerns of globally competing industry. Developing countries have so far rejected binding commitments, industrial benchmarks or sectoral approaches. But according to IPCC, also they have to reduce emissions in a long term, if we want to achieve 2 °C target. Sectoral approaches could be considerable easier start than economy wide commitments. Every sectoral approach includes (1) selecting a sector, (2) defining a sector, (3) designing the approach and (4) amending it to national legislations. The scheme's trustworthiness also requires proper monitoring, reporting and verification. The iron and steel sector seems to suit well for a sectoral approach, due to its concentrated actors and uniform products and processes. The definition of a regulated sector could be only a blast furnace or it could reach also to other steel making sub processes or other reduction processes, e.g. ferrochrome. Emissions could be measured as absolute or with benchmarks, but benchmarks suit a sectoral scheme better. Why developing countries would adopt any commitments is one of the key questions. They may 1) receive funds in exchange of GHG reductions or there can be 2) technology transfers and 3) training of professionals. Generally speaking, these options may look reasonable and sound, but they include many difficult questions. This study gives a brief review of the literature on sectoral approaches and the global iron and steel industry. It carries out a case study of sectoral approaches on the iron and steel sector and discusses underlying barriers and possible solutions.