bout 60% of the steel produced in South Africa is through the blast furnace-basic oxygen furnace production route. The remaining 40% of the country’s steel production occurs through electric arc furnace technology, which relies mainly on recycled scrap steel as an input.
The use of carbon capture and storage technology can also play a role in decarbonising the steel sector. The other side of the value chain also faces difficulties because the growing impetus to address climate change is resulting in related regulations in countries to which the South African steel industry exports.
Another important export market for the South African steel sector is the United Kingdom. The UK is following the EU lead in proposing a carbon price on imports. The UK government is currently consulting on a range of potential policy measures, including a CBAM similar to the EU’s to mitigate future carbon leakage risk.
The iron, steel and non-ferrous metals sectors are among those that would be most affected by this legislation.