SteelZero Initiative: Establishes procurement alignment framework for net-zero compatible steel across global industrial value chains

What’s Required

SteelZero was launched in 2021 by the Climate Group in collaboration with ResponsibleSteel to accelerate decarbonization of the global steel sector. Steel production currently accounts for roughly 7 to 9 percent of global carbon dioxide emissions, largely due to the use of coal-based blast furnace technology. SteelZero addresses this challenge by mobilising downstream buyers of steel to create market demand for low-emissions production pathways.

Companies joining SteelZero commit to procuring steel that meets emissions performance thresholds consistent with global climate targets. The initiative focuses on demand-side transformation rather than production regulation. This approach is designed to complement emerging regulatory frameworks such as carbon pricing systems, industrial decarbonisation policies, and green public procurement rules.

Participating companies must establish procurement strategies that progressively increase the share of low-emissions steel in their supply chains. The initiative defines net-zero compatible steel as steel produced through technologies and production pathways aligned with emissions trajectories required to limit global warming to 1.5°C.

Member companies are required to measure and disclose their total annual steel consumption across all operations and projects. This includes direct procurement as well as steel embedded in purchased products or construction materials where feasible.

Companies must also evaluate the emissions intensity of steel suppliers. This typically requires collaboration with steel producers to obtain emissions data related to steelmaking processes, including emissions associated with raw material extraction, smelting, and finishing processes.

SteelZero participants must develop internal procurement policies prioritising steel produced through low-carbon technologies. These technologies include hydrogen-based direct reduced iron production, electric arc furnace steelmaking powered by renewable electricity, and other emerging decarbonisation pathways.

Supplier engagement is a core element of the framework. Companies are expected to actively encourage steel suppliers to transition toward lower emissions production methods. This may involve long-term purchasing agreements, collaborative technology development, or investment in supply chain decarbonisation initiatives.

Public disclosure is also required. Members must report progress toward SteelZero commitments and describe procurement strategies that support low-emissions steel markets.

Important Deadlines

SteelZero initiative launch: 2021

Interim procurement milestone: 50% of steel procurement aligned with low-emissions production pathways by 2030

Long-term objective: 100% net-zero compatible steel procurement by 2050

Companies must disclose progress periodically as part of the initiative reporting requirements.

Current Status

SteelZero currently includes companies from sectors such as construction, engineering, automotive manufacturing, and infrastructure development. These industries represent major global consumers of steel and therefore play a key role in shaping market demand.

The initiative operates alongside ResponsibleSteel certification systems and other industrial decarbonisation frameworks. As steel producers adopt low-carbon production technologies, SteelZero procurement commitments are expected to accelerate market adoption.

Mandatory vs Exceptions

SteelZero participation is voluntary and applies only to organisations that formally join the initiative.

However, once a company becomes a member, it is expected to adopt the procurement commitments and reporting requirements defined within the initiative framework.

Companies operating in markets where low-emissions steel supply is limited may adopt transitional procurement strategies while supporting development of new supply chains.

Penalties for Non-Compliance

SteelZero does not impose financial penalties.

However, failure to demonstrate credible progress toward procurement commitments may result in removal from the initiative or reputational consequences.

Companies failing to meet procurement milestones may face scrutiny from investors, climate advocacy groups, and corporate peers.

Examples of Known Violations

Typical implementation challenges include:

• incomplete tracking of steel consumption across global supply chains.

• lack of reliable emissions intensity data from steel suppliers.

• corporate procurement commitments not supported by contractual purchasing agreements.

• continued reliance on blast furnace steel production without transition planning.

inconsistent definitions of low-emissions steel across markets

Resources

• https://www.climate-group.org/steelzero

• https://www.climate-group.org/steelzero-members