Steel decarbonisation in the early 21st century : Innovation, clean power and modern industrial policy

The global steel industry is a complex socio-technical system of strategicimportance, producing close to 10 percent of global emissions. Decarbonizing thissystem will significantly impact energy use, supply chain configurations, andinternational competitiveness, with geopolitical implications. Governments acrossthe world are therefore turning towards industrial policy to accelerate atransformation and boost competitiveness of domestic industries.This thesis investigates the role of green industrial policy for the decarbonisation ofsteelmaking at three different levels of analysis: the firm, domestic policy and globalmarket level. First, by exploring the first radical decarbonising innovation projectHYBRIT in Northern Sweden through the lens of the innovative enterprise.Favourable internal strategic, organisational and financial conditions enabled theproject, with spillover effects on the rest of the steel industry. Second, by combiningtheoretical insights from the literature on energy systems and industrial policy onthe factors affecting the reconfiguration of global steel supply chains. Energy costsare pivotal for the decarbonisation of energy-intensive industry, and one of multiplefactors shaping international competitiveness. Third, by exploring the potential ofpolicies for deliberate decline in breaking the carbon lock-in associated with steelovercapacity. Although supportive policies have enabled early progress in lowcarbonsteelmaking, accelerating sector-wide decarbonization will require greateremphasis on deliberate decline and reducing overcapacity.By applying theoretical insights from the literatures on innovation, energy systems,and green industrial policy, this thesis argues that ambitious policy initiatives arecritical enablers of the emergent transformation of steelmaking. These initiativeshave not only been motivated by sustainability targets, but also by geopoliticalcompetition. Policy achievements are however constrained by politicalfragmentation and discontinuity in the EU and the US.