The iron and steel sector is undergoing a period of significant disruption. Alongside persistent overcapacity and rising trade tensions, the sector is also on the cusp of a wider technology transformation. In this context, policymakers face a complex challenge. They must steer their industries through the competitive pressures in the conventional steel markets, while simultaneously aiming to realise the opportunities and manage the risks of a technology transition.
This report explores how policymakers in China, the European Union and the United States understand the steel transition, the uncertainties they face, and the range of possible futures that could emerge. It draws on interviews, regional scenario exercises with policymakers and industry experts, and a three-way dialogue conducted in London using the Three Horizons framework.
The analysis shows that while national contexts differ, many important uncertainties shaping the steel transition are international in nature. These include future trade openness, global demand for low and near-zero emission steel, the development of interoperable standards, and the pace at which new technologies are deployed across regions.
Across all regions, scenarios involving higher levels of international cooperation were generally associated with better outcomes for national steel industries and a faster global transition. The advantages arose from aligned policies in major steel-producing regions creating larger demand for clean steel, faster cost reduction, and reduced risks for first-movers to clean steel technologies. However, despite recognising these benefits, many policymakers appear to be planning for futures with limited cooperation, suggesting a gap between preferred and expected pathways.
Focusing on the prospects for international collaboration, the report finds strong alignment across regions on the long-term vision for the steel sector: a shift towards electrified production routes, high levels of recycling, near-zero emission primary steelmaking, and the phasing out of trade in high-emission steel. The challenge is less about agreeing on the destination and more about aligning competition, trade policy and diplomacy to enable this transition.
The report concludes that unilateral approaches are unlikely to deliver a timely or cost-effective transition. Instead, progress will depend on combining effective domestic policy with selective and pragmatic international cooperation — including on standards, trade in green iron, demand-creation policies, and investment incentives — to shape global competition in ways that accelerate, rather than delay, the move to near-zero emission steel.
