Carbon-Neutral Steel Production and Its Impact on the Economies of China, Japan, and Korea: A Simulation with E3ME-FTT:Steel

Pim Vercoulen, Soocheol Lee, Xu Han, Wendan Zhang, Yongsung Cho, Jun Pang

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)


The iron and steel industry is a large emitter of CO2 globally. This is especially true for the iron and steel industries in China, Japan, and Korea due to their production volumes and the prevalence of carbon-based steel production. With few low-carbon and commercially available alternatives, the iron and steel industry is truly a hard-to-abate sector. Each of the countries of interest have committed to a net-zero future involving the mitigation of emissions from steel production. However, few studies have investigated the means by which to achieve decarbonization beyond the inclusion of price signalling policies (e.g., carbon tax or emission trading schemes). Here, we use E3ME-FTT:Steel to simulate technology diffusion in the ISI under several policy environments and we investigate the likely impacts on the wider economy. The results show that penalizing carbon intensive processes can incentivize a transition towards scrap recycling, but it is relatively unsuccessful in aiding the uptake of low carbon primary steelmaking. A combination of support and penalizing policies can achieve deep decarbonisation (>80% emission reduction compared with the baseline). Mitigating the emissions in the iron and steel industry can lead to economic benefits in terms of GDP (China: +0.8%; Japan: +1.3%; Korea: +0.1%), and employment (Japan: +0.7%; Korea: +0.3%) with China, where job losses in the coal sector would negate job gains elsewhere, as the exception.

Original languageEnglish
Article number4498
Issue number11
Publication statusPublished - 2023 Jun

Bibliographical note

Funding Information:
This research was funded by the Asia Research Project of Meijo University.

Publisher Copyright:
© 2023 by the authors.


  • decarbonization
  • economic simulation
  • energy transition
  • iron and steel industry
  • mitigation policies
  • technology diffusion

ASJC Scopus subject areas

  • Renewable Energy, Sustainability and the Environment
  • Fuel Technology
  • Engineering (miscellaneous)
  • Energy Engineering and Power Technology
  • Energy (miscellaneous)
  • Control and Optimization
  • Electrical and Electronic Engineering


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