Algoma, a steelmaker, has announced plans to expedite its shift to electric steelmaking due to the pressures of U.S. steel tariffs. Prime Minister Mark Carney recently met with U.S. President Donald Trump to seek relief from the 50 percent tariff that Canadian steelmakers have been grappling with since June, coupled with low global steel prices attributed to oversupply, primarily from China.
In a recent news release, Algoma disclosed that the imposed tariffs have rendered its blast furnace and coke oven operations unsustainable. Consequently, the company has secured $500 million in government loans and will discontinue these operations as it accelerates its transition to electric steelmaking. This move aligns with the broader trend in the Canadian steel industry, where other steelmakers are also facing economic challenges and the imperative to decarbonize.
The steel industry’s environmental impact is substantial, contributing around seven to nine percent of global greenhouse gas emissions worldwide. In Canada, the steel sector produced approximately 13.1 megatonnes of CO2 in 2023, equivalent to the emissions of three million gas-powered cars and representing two percent of the country’s total emissions. Notably, Ontario hosts the core of Canada’s steel industry, with the three largest CO2 emitters in the province being steel plants, collectively responsible for 40 percent of industrial greenhouse gas emissions.
To mitigate its carbon footprint, Algoma is shifting to secondary steelmaking using electric arc furnaces, a process that involves recycling scrap steel or using refined iron instead of iron ore. This approach is expected to reduce carbon emissions by up to 70 percent and enhance production efficiency. On the other hand, ArcelorMittal Dofasco in Hamilton is exploring the replacement of coal and coke with hydrogen through direct reduced iron (DRI) technology to reduce carbon emissions by 60 percent. These initiatives are supported by government investments and policy frameworks promoting green steel production.
In conclusion, the steel industry’s transition to low-carbon practices is essential for sustainability and aligns with global efforts to combat climate change. By embracing innovative technologies and government support, Canadian steelmakers are paving the way for a greener and more competitive steel sector.