Steel industry pursues decarbonization and major Brazilian investments

The global steel industry is facing a dual challenge: it accounts for approximately 8% of global greenhouse gas emissions while remaining essential for the energy transition by providing materials for wind turbines, electric vehicles, and renewable energy infrastructure. To meet rising demand, the sector may require investments between $1.5 trillion and $2 trillion by 2050 to decarbonize processes.

Companies are exploring various routes to reduce carbon intensity, including scrap recycling, the use of electric furnaces, and charcoal. The most difficult transition involves the integrated route, which relies on coal as both a fuel and a chemical reducing agent. Replacing traditional blast furnaces requires significant capital investment.

In Brazil, Ternium, part of the Techint Group, is expanding its industrial footprint. The company has consolidated its position as the main shareholder of Usiminas following a R$ 1.7 billion investment in shares. Over the last five years, modernization efforts at Usiminas have totaled R$ 7 billion, including a R$ 2.7 billion project to replace Blast Furnace 3. Ternium also expects to invest between R$ 1.2 billion and R$ 1.4 billion by the end of 2026, with significant focus on energy efficiency and coke production.