Algoma, a steelmaker, is expediting its shift to electric steelmaking due to the impact of U.S. steel tariffs. Prime Minister Mark Carney engaged with U.S. President Donald Trump to seek relief from the 50 percent U.S. tariff that has burdened Canadian steelmakers since June, compounded by low global steel prices attributed to oversupply from China. In a recent news release, Algoma disclosed securing $500 million in government loans, citing that the tariffs have rendered its blast furnace and coke oven operations unsustainable. Consequently, Algoma plans to discontinue these operations while hastening its transition to electric steelmaking.
Facing similar economic challenges, other Canadian steelmakers are under pressure to decarbonize. The steel industry’s contribution to global greenhouse gas emissions, responsible for climate change, is estimated at seven to nine percent. In Canada, steel production accounted for approximately 13.1 megatonnes of CO2 in 2023, equivalent to the emissions of three million gas-powered cars or two percent of the country’s total emissions. Notably, Ontario hosts Canada’s steel industry, with the three largest industrial CO2 emitters in the province being steel plants, generating 40 percent of industrial greenhouse gas emissions.
To mitigate emissions, the federal and provincial governments have invested $2 billion in converting Ontario plants to lower-carbon energy sources. Algoma’s strategic shift to electric arc furnaces for secondary steelmaking aims to reduce carbon emissions by up to 70 percent while boosting production efficiency. This transition aligns with global trends towards green steel production, driven by policies promoting low-emission steel in construction projects.
Furthermore, ArcelorMittal Dofasco’s initiative involves replacing coal with natural gas and hydrogen in primary steelmaking processes. This transition to hydrogen-based direct reduced iron technology is pivotal in reducing carbon footprints in steel production. The project, aimed at cutting emissions by 60 percent by 2028, underscores the industry’s commitment to sustainability and aligns with government efforts to decarbonize the steel sector.
Overall, the steel industry’s trajectory towards green steel production is propelled by government support, industrial carbon pricing mechanisms, and evolving procurement standards favoring low-emission steel. The ongoing efforts to decarbonize the steel industry amidst economic challenges underscore the importance of aligning industry practices with long-term sustainability goals.