CO2 in the iron and steel industry: an analysis of Japanese emission reduction potentials

Abstract A new linear programming model has been developed for the analysis of CO 2 emission reduction potentials in the Japanese iron and steel industry. This model is named Steel Environmental strategy Assessment Program. The model can be used to analyse the impact of CO 2 taxes on technology selection, iron and steel trade and product demand for the next three decades. The Japanese iron and steel industry accounts for approximately 15% of the Japanese greenhouse gas emissions. The model results suggest that these emissions will decline from a level of 185 Mt in 2000 to about 150 Mt in 2020–2030 because of declining production and increasing recycling. A further emission reduction to 90 Mt is technologically feasible and can be achieved through a global tax of 5000¥/t CO 2 (120¥ is equivalent to 1 US$). CO 2 removal from blast-furnace off-gases and introduction of CO 2 -free electricity are the most attractive options. If only Japan and Europe would introduce such a tax, Japanese emissions will decline to 25 Mt CO 2 . However, this effect is mainly caused by relocation of industry. In fact emissions abroad increase significantly, resulting in 70% carbon leakage. However, leakage can be prevented by measures such as import tariffs for steel from countries without CO 2 reduction policies.