Reports > Sustainability

Implications from the Global Discussion on Standards for Low-Carbon Steel

2025.09.17 Yoon-Gih Ahn

Yoon-Gih Ahn

#Hashtag

#carbon neutral #green steel #steel
Discussions on international standards for product greenhouse gas (GHG) calculation—a cornerstone for transitioning to a low-carbon economy—are actively underway, centered on the steel industry. The UN/Climate Club and the World Steel Association (worldsteel) are leading efforts to establish methodologies for defining and verifying low-carbon steel, while both recognize the need for alignment with ISO standards. This report examines their respective approaches—each aiming to promote sustained global GHG reduction and the formation of a climate premium market—with a particular focus on the Allocated Carbon Footprint (Allocated CFP) methodology.
Table of Contents

  • 1. Global GHG Policy Framework

  • 2. Recent Discussion on International Standardization of GHG Accounting for Steel Products

  • 3. Comparison: UN Climate Club vs. World Steel Association (worldsteel) Approaches

  • 4. Strategic Responses by the Korean Steel Industry

  • 5. Conclusion

    • Appendix

Executive Summary

  • (Supply chain emissions also regulated) Decarbonization policies are now extending beyond production-phase GHG reduction to include product-level and supply chain emissions.

    • ※ (Policy principle) EU’s Integrated Product Policy (IPP)

  • (Global debate over low-carbon steel standards) Under the G7 resolution, ① UN/Climate Club, and ② WSA/the steel industry are debating international standards for calculating carbon-reduced steel.

    • Both sides acknowledge the necessity of ISO procedures to establish their methodologies as globally recognized standards.

  • (UN/Climate Club) Advocates for near-zero and low-carbon steel based on specific criteria, regardless of the production route (blast furnace or electric arc furnace).-> Being promoted as a pre-standard under ISO procedures.

  • (WSA/Steel industry approach) Promotes a carbon accounting method that reflects material flow and traceability by production process, aiming for integration into relevant ISO international standards.

    • To prevent greenwashing and foster a premium market for low-carbon steel, the WSA is discussing adoption of the Allocated CFP (Carbon Footprint) methodology.

  • (Korean steel industry supports the Allocated CFP model) The Allocated CFP method applies the existing ISO product LCA standard (ISO 14067) and incorporates double-counting prevention mechanisms from Article 6 of the Paris Agreement,

    • This is the most reasonable approach for enhancing Korea’s competitiveness and ensuring sustained GHG reduction.

Key Implications

➊ Integration of the Allocated CFP method into ISO revisions
Timely incorporation into the comprehensive revision of the international product LCA standard (ISO 14067), alongside with discussions with worldsteel.

 

➋ Development of a premium market for low-carbon steel
Financial support for Best Available Technologies (BAT) for Allocated CFP steel, along with government priority procurement.
- The Japanese government is providing 20 trillion yen in funding for steel G/X projects under the principle of economic additionality.

 

➌ Promotion of ISO-based mutual recognition agreements (MRA)
With the Korea–EU MRA facing challenges, leveraging the International Accreditation Forum (IAF) under ISO-based standards can enhance Korea’s position in attracting global ESG capital and strengthening its negotiating power in EU CBAM (Carbon Border Adjustment Mechanism) discussions.


 

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