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EMISSIONS: EU Carbon Price to Encourage Green Metals by 2030

EMISSIONS
BulletPower BulletsEnergy BulletsCommodities

The EU carbon price will likely be high enough to encourage greener metals production by 2030, with the EU carbon price estimated to reach €146/ton CO2e by the end of this decade according to BNEF. 

  • Carbon prices are forecast to rise, while abatement costs for net-zero production are anticipated to fall, which will likely support the economics of greener production.
  • BNEF forecasts hydrogen-based crude steel production may be cost-effective against coal-fired production in 2030.
  • If combining biofuels and hydrogen, the cost competitiveness with coal is currently on track to just before 2030, as some existing infrastructure can be used (see chart).
  • Electrification, however, is not anticipated to become cost competitive against coal until 2040 as it requires new furnace designs, while CCS projects are struggling to cost compete.
  • Production based on hydrogen instead of natural gas is also not expected to be cost efficient until 2050. 
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The EU carbon price will likely be high enough to encourage greener metals production by 2030, with the EU carbon price estimated to reach €146/ton CO2e by the end of this decade according to BNEF. 

  • Carbon prices are forecast to rise, while abatement costs for net-zero production are anticipated to fall, which will likely support the economics of greener production.
  • BNEF forecasts hydrogen-based crude steel production may be cost-effective against coal-fired production in 2030.
  • If combining biofuels and hydrogen, the cost competitiveness with coal is currently on track to just before 2030, as some existing infrastructure can be used (see chart).
  • Electrification, however, is not anticipated to become cost competitive against coal until 2040 as it requires new furnace designs, while CCS projects are struggling to cost compete.
  • Production based on hydrogen instead of natural gas is also not expected to be cost efficient until 2050.