Linking Global Integrated Assessment and Hybrid Input-Output Models To Support Steel Decarbonization Policies in...

Formulating decarbonization strategies for the European steel industry is crucial for meeting EU climate goals while preserving competitiveness. The present study develops an integrated modeling framework linking GCAM, a technology-rich global integrated assessment model, with the MARIO multiregional input-output framework to trace EU steel production, trade, and its direct and embedded greenhouse-gas emissions. Four scenarios are examined: a baseline aligned with current pledges and three pathways resembling major EU policy packages for 2025-2050, notably the Carbon Border Adjustment Mechanism (CBAM) and green-steel subsidy schemes. Results indicate that CBAM promotes low-emissions steel technologies, reduces total embedded emissions in EU steel consumption (up to -46% in 2030 and -23% in 2050), and helps stabilize the sector during the transition. Complementary green-steel support accelerates deployment of low-carbon production capacity and strengthens long-run competitiveness. Across scenarios, emission intensities of steel production fall (up to -80% in 2050), and consumption-based footprints associated with EU steel demand decline. The GCAM-MARIO coupling provides a transparent link between scenario design and economy-wide footprint accounting, illustrating how border measures and targeted subsidies interact. Overall, combining CBAM with sustained support for green-steel technologies offers an effective pathway to decarbonize the European steel industry while maintaining its international competitiveness.