E3G’s 2025 Steel Policy Scorecard reveals that while G7 nations have advanced their policy ambition for steel decarbonization, actual delivery remains insufficient and fragmented, risking a significant slowdown in global industrial transformation. The assessment indicates that near-zero emissions steel projects are stalling or have been cancelled across the majority of G7 countries, undermining their potential leadership in the clean energy transition and jeopardizing climate objectives.

These developments unfold amidst intensifying political headwinds, including rising trade tensions and industrial policy rivalries that destabilize the global steel landscape. While some G7 members engage in collaborative initiatives like the Climate Club, others, notably the U.S., have seen a rollback of progress, with steel tariffs impacting international momentum and investment certainty. Concurrently, persistently high energy prices in Western Europe have delayed the commercialization of crucial decarbonization pathways, such as hydrogen-based direct reduced iron (H-DRI), despite substantial public financial support.

Beyond the G7, the pipeline for new coal-based steelmaking capacity continues to expand, notably with India planning 200 million tonnes per annum (mtpa) of new coal-fired capacity. This underscores the critical role G7 countries must play in influencing overseas steel investments and accelerating the global transition to cleaner production methods. To get on track, the G7 must prioritize the rapid deployment of clean, affordable electricity for industrial use, alongside renewed international cooperation on standards, finance, and trade mechanisms.

Key findings from the 2025 Scorecard highlight varied national performances. Germany maintains its lead in most policy categories, yet faces project delays due to policy uncertainty and high hydrogen costs, despite commitments to carbon contracts for difference (CCfD). The UK has risen to second place, driven by its 2030 power decarbonization target and support for electric arc furnace (EAF) transitions, though critics note these are crisis-driven subsidies rather than strategic long-term plans. Italy and France show a mixed picture; Italy benefits from partial resolution of the Taranto steelworks crisis, while France faces uncertainty over a key ArcelorMittal DRI project, despite strong grid upgrade plans. Canada and Japan exhibit emerging political support, with Canada focusing on an industrial strategy and Japan piloting procurement schemes, though Japan’s grid remains largely fossil-fuel-based. The U.S. has fallen to last place, with funding cancellations for industrial decarbonization and rollbacks on public procurement, indicating a loss of momentum.

E3G identifies five priorities for global steel decarbonization: investing in clean steelmaking technologies like H-DRI, phasing out high-carbon blast furnaces with just transition principles, delivering abundant clean power for industry, strengthening international collaboration through platforms like the Industrial Deep Decarbonisation Initiative (IDDI), and addressing trade tensions. The scorecard emphasizes that without increased policy ambition, particularly on clean energy, the delivery of near-zero emissions steel risks further stalling, impacting global climate goals and economic resilience.