A report published by the United Nations Framework Convention on Climate Change (UNFCCC) Technology Executive Committee and launched at COP31 has highlighted significant differences in standards and certification systems for low- and near-zero-emission industrial products, warning that fragmented methodologies and high investment costs continue to hinder their wider adoption. Titled Analysis of Standards and Labels for Low and Near Zero Emission Production and Products, the report examines regulatory and voluntary standards, carbon-intensity thresholds and certification mechanisms in the steel industry.
Steel production accounts for approximately seven percent of global emissions, according to the report. Although standards for low-emission materials are developing rapidly, differences in emissions accounting, system boundaries, verification requirements and certification criteria continue to limit international comparability. Certified low- or near-zero-emission production also remains below one percent of global output in steel, cement and low-emission hydrogen, the report indicates.
BF-BOF steelmaking accounts for 71 percent of global production
Approximately 71 percent of global steel production uses the blast furnace-basic oxygen furnace (BF-BOF) route, which generates around 2.3 mt of CO₂ per mt of steel, according to the report. Electric arc furnace (EAF) production accounts for the remaining 29 percent.
Predominantly scrap-based EAF production recorded an average emissions intensity of approximately 0.69 mt of CO₂ per mt of crude steel in 2024, although actual emissions depend on electricity sources, raw materials and accounting methodologies. These differences in production routes and emissions accounting complicate comparisons between steel products and certification systems, the report emphasizes.
Low-emission steel certification standards use different carbon-intensity thresholds
Several benchmarks for low- and near-zero-emission steel are identified in the report. ResponsibleSteel certification indicates emissions levels of approximately 1.1-1.8 mt of CO₂ per mt of crude steel, depending on production routes and assessment boundaries, while EAF-based production may achieve levels of around 0.6-1.0 mt of CO₂ per mt. Meanwhile, the First Movers Coalition defines near-zero-emission steel as material produced with no more than 0.4 mt of CO₂ per mt on a cradle-to-gate basis.
The EU Emissions Trading System (ETS) free-allocation benchmark stands at approximately 1.328 mt of CO₂ per mt of hot-rolled steel. The 0.4 mt threshold is associated primarily with hydrogen-based direct reduced iron (DRI) and EAF production powered by renewable electricity. However, differences in how standards account for scrap content, production routes and lifecycle emissions continue to complicate certification, procurement and international trade.
Baosteel, HYBRIT and SALCOS advance low-emission steel production technologies
Several industrial projects developing low-emission steel production technologies are also highlighted. In China, Baosteel completed the connection of a one million mt near-zero-carbon steel production line at its Zhanjiang plant in December 2025. The facility combines hydrogen-based direct reduction, scrap, EAF steelmaking and low-carbon rolling technologies. The production line is expected to reduce emissions by 50-80 percent compared with conventional BF-BOF production and avoid up to 3.14 million mt of CO₂ annually, according to the report.
In Sweden, the HYBRIT project aims to replace coking coal with renewable hydrogen in iron ore reduction, potentially reducing emissions by 90-95 percent compared with conventional steelmaking. Stegra's planned facility in Sweden is also mentioned, with a design capacity of five million mt of near-zero-emission steel annually by 2030 using renewable electricity, hydrogen-based DRI and EAF technology.
Meanwhile, Germany's SALCOS project aims to replace existing blast furnace operations with hydrogen-based DRI and EAF production, reducing emissions intensity from approximately 2.3 mt to 0.4 mt of CO₂ per mt of steel. Despite technological progress, near-zero-emission steel still represents less than one percent of global production, the report notes. High capital expenditure, insufficient hydrogen and renewable electricity infrastructure, financing difficulties and limited demand for certified products remain major barriers.
Turkey's ETS framework and steel industry examined
Turkey's industrial decarbonization policies and their potential implications for the country's steel industry are also examined. According to the report, Turkey's first Climate Law entered into force in July 2025, establishing the legal basis for a national emissions trading system and creating governance structures, including a Carbon Market Board. A draft ETS regulation published on July 22, 2025, proposed an emissions-intensity-based cap, benchmark-guided free allocation and coverage of electricity and industrial installations emitting at least 50,000 mt of CO₂ equivalent annually. The ETS is intended to support industrial decarbonization through carbon pricing, emissions monitoring and allowance trading, while contributing to Turkey's 2053 net-zero target and alignment with EU-related trade requirements, according to the report.
EAF production accounts for approximately 70-75 percent of Turkey's steelmaking capacity, giving the country a lower average embodied emissions profile than steel industries dominated by blast furnace production, the report highlights. This production structure could support the Turkish steel sector's position under EU Carbon Border Adjustment Mechanism (CBAM)-related procurement and trade requirements, according to the report.
Green public procurement and financing needed to expand low-emission steel markets
Inconsistent carbon-intensity thresholds, limited mutual recognition of certification systems, insufficient access to financing and high decarbonization costs are identified as major obstacles to the wider adoption of low-emission industrial materials. Stimulating demand through green public procurement and aggregated purchasing commitments is also emphasized, including those made by First Movers Coalition members such as Ford and Volvo for steel with emissions below 0.4 mt of CO₂ per mt by 2030. To address existing barriers, the report recommends developing multi-tier international reference standards that account for differences in national industrial development and technological readiness, rather than imposing uniform global thresholds.
Other recommendations include strengthening digital monitoring, reporting and verification systems, improving the interoperability of national certification frameworks and expanding financial support through concessional financing, tax incentives and carbon contracts for difference.
