Socio-technical scenarios for energy intensive industries: The future of steel production in Germany in context of international competition and CO2 reduction

The iron and steel industry belongs to the top five CO2-intensive industries. With respect to national GHG reduction targets, a reduction in the economic activities of these sectors might be helpful for reaching the targets. Cost disadvantages resulting e.g. from additional cost for mitigation measures might foster the attitude towards relocation of economic activities. Since a relocation of economic activities usually is linked with higher emissions in other countries and since the reduction of GHG-emission is a global target, possible effects (i.e. carbon leakage) have to be analyzed in a global context. In the past, the industry has experienced large fluctuations in prices of raw materials and in the demand for steel. In addition, there have been large changes in the policy framework (i.e. environmental regulations). There is much uncertainty with regard to future prices for raw materials and other factors. For taking uncertainty into account we analyzed the future of the steel industry in a broader context. Using a multilevel cross-impact balance approach in combination with a bottom-up cost model we present an approach that enables to take the links between several quantitative and qualitative descriptors into account. For the year 2030, all scenarios show cost advantages for the Chinese steel industry selling steel in Europe. Since our calculations are based on average figures on national level and not on plant-specific data the results reflects possible developments on a rather aggregate level. However, the results can nevertheless be employed to identify possible general developments and to indicate challenges for climate policy as well as for industrial policy