Readiness key takeaways Technology 2 –Scrap-based EAF with green power and BF-BOF with BECCS are the most advanced technologies. –BF-BOF with CCS and CCU are in the prototype stage, while direct reduced iron EAF (DRI-EAF) with CCS is at the demonstration stage and is expected to be commercially available by 2028.301 Infrastructure 1 –Of the 2050 fuel mix, clean power is expected to comprise 26%, hydrogen 29% and bioenergy 6%.302 This will require 833 GW of clean power, 48 MTPA of clean hydrogen and 460 MTPA of biofuels capacity.303 CCUS will also play a key role in reducing emissions. –Significant efforts in building clean power, hydrogen and bioenergy capacity are required to meet the 2050 net-zero requirements, as the current energy mix is dominated by fossil fuels. Demand 3 –As of 2022, less than 10% of steel was produced using low-emission processes, with nearly all progress occurring in low-emission secondary production (e.g. recycling).304 –Demand from the automotive industry has been on the rise, with the announcement of green supply agreements. There is especially high demand for use in EVs. Capital 1 –The steel sector currently has an annual CapEx of $111 billion.305 –The steel sector will require over $129 billion306 in annual investments by 2050. Almost 70% of this investment must come from the ecosystem in the form of low-emission energy capacity investments. –Significant additional investment requirement, low industry margins and ease of increasing capital are leading to the low capital readiness score. Policy 2 –The EU’s Carbon Border Adjustment Mechanism (CBAM) will end free ETS allowances for steel by 2034 and impose tariffs on emissions-intensive imports.307 –By 2025, China will prioritize the creation of a circular economy, seeking an increase in the use of scrap steel to 255 Mt by 2025 and peak steel production and sectoral emissions before 2030.308 Sector priorities Company-led solutions Mid-term (by 2030) –Switch from BF-BOF to EAFs. –Use renewable electricity in EAFs to cut carbon intensity for secondary steel.Long-term (by 2050) –Explore green hydrogen as a replacement for fossil fuels to be used in EAF. Ecosystem-enabled solutions Mid-term (by 2030) –Standardize green steel and hydrogen, setting consistent standards for producing steel and hydrogen from low-carbon sources. –Increase scrap collection to enable more scrap- based production.Long-term (by 2050) –Develop infrastructure for producing and distributing green hydrogen. Net-Zero Industry Tracker: 2024 Edition 3

Net Zero Industry Tracker 2024 Steel