The steel industry, a pillar for economic and social development, is extremely energy-intensive, creating a lot of climate pollution. Its low-carbon and near-zero-carbon transition is crucial to the world’s climate goals and introduces opportunities for high-quality development for itself and its downstream partners. The continual advancement and popularization of low-carbon technology enables near-zero-carbon steel production. However, the high cost remains a major challenge, causing a conservative approach in investment decisions to such projects that are often capital intensive, potentially hindering the industry’s transition.

Therefore, accelerating the deployment of near-zero-carbon steel projects requires addressing economic challenges. This report adopts a project-level economic model to examine the economics of near-zero transition routes and analyzes how policy, demand-side, and financial stakeholders can address the economic challenges and support the industry’s transition. Supporting measures include policy instruments like green hydrogen subsidies and the carbon market, market instruments such as green premiums paid by buyers, forward offtake agreements, and preferential interest rates from financial institutions. Additionally, the report presents six action recommendations aimed at mobilizing stakeholders to create favorable conditions for accelerating the deployment of near-zero-carbon steel projects.