Simulating regional workforce impacts of decarbonizing integrated steelmaking

Area of Science:

• Industrial Ecology
• Labor Economics
• Climate Change Mitigation

Background:

• Heavy manufacturing, including iron and steel, faces pressure to decarbonize due to climate change.
• The iron and steel sector is a significant source of global CO2 emissions and a major regional employer.
• Understanding workforce transitions is vital for economic and clean energy strategies in industrial regions.

Purpose of the Study:

• To simulate the impact of transitioning from integrated steelmaking to direct reduced iron (DRI) and electric arc furnace (EAF) production on the workforce.
• To assess the transferability of skills, knowledge, and abilities (SKAs) of the existing integrated steelmaking workforce to new production methods.
• To identify barriers to workforce transition, such as skill gaps and wage discrepancies.

Main Methods:

• Simulation modeling of an "in-place" industry transition using Southwest Pennsylvania as a case study.
• Analysis of skills, knowledge, and abilities (SKAs) required for direct reduced iron (DRI)/electric arc furnace (EAF) jobs compared to integrated steelmaking roles.
• Identification of occupational groups with varying degrees of general job market transferability.

Main Results:

• The integrated steelmaking workforce possesses the SKAs for over 95% of jobs in DRI/EAF facilities.
• However, the number of jobs in DRI/EAF facilities is only 25% of those in integrated plants.
• Approximately 85% of occupations are limited by missing skills, while 15% are limited by insufficient wages for transition.

Conclusions:

• While the steelmaking workforce has highly transferable skills, job availability decreases significantly with the transition to DRI/EAF.
• Skill gaps and wage issues are primary barriers to workforce mobility out of the iron and steel industry.
• The findings can inform social policy, retraining program design, and regional economic strategies for decarbonization efforts.