Algoma, a steelmaker, is hastening its shift to electric steelmaking due to the impact of U.S. tariffs on steel. Prime Minister Mark Carney engaged with U.S. President Donald Trump seeking relief from the 50 percent U.S. tariff imposed on Canadian steelmakers since June. This, coupled with low global steel prices due to oversupply attributed to China, has led Algoma to announce a transition to electric steelmaking after securing $500 million in government loans.
The tariffs have rendered operating the blast furnace and coke oven unsustainable for Algoma. As a result, the company plans to exit these operations and expedite its move to electric steelmaking. Similar economic pressures and environmental obligations are faced by other Canadian steelmakers.
Steel production globally contributes significantly to greenhouse gas emissions, accounting for approximately seven to nine percent of global emissions. In Canada, the steel industry emitted around 13.1 megatonnes of CO2 in 2023, equivalent to the emissions of three million gas-powered cars or two percent of the country’s total emissions. Ontario, the heart of Canada’s steel industry, sees its three largest industrial CO2 emitters as steel plants, generating 40 percent of the province’s industrial greenhouse gas emissions.
To reduce carbon emissions, steelmakers in Canada are adopting various decarbonization strategies. Algoma is transitioning to electric arc furnaces for secondary steelmaking, eliminating CO2-intensive processes. This shift is expected to cut carbon emissions by up to 70 percent and enhance production efficiency.
On the other hand, ArcelorMittal Dofasco in Hamilton plans to replace coal with natural gas and hydrogen to reduce its carbon footprint. The company aims to phase out coal and achieve a 60 percent reduction in emissions by 2028 through innovative technologies such as direct reduced iron (DRI) production.
The government’s support, industrial carbon pricing incentives, and updated procurement standards favoring low-emission steel products are crucial in driving the green steel transition. The steel industry’s future competitiveness hinges on sustainable practices, with a clear focus on long-term goals to achieve environmentally friendly steel production.
