Environmental kuznets curve in the iron and steel industry: evidence from 30 major steel-producing countries

Abstract

With the growing attention on carbon neutrality, the transformation to low-carbon production is the most pressing global mission today. The Environmental Kuznets Curve (EKC) is frequently used to develop carbon neutrality roadmaps for various industries and even entire nations, but few scholars have applied it to the iron and steel industry (IaSI). According to the International Monetary Fund, the global IaSI accounts for 7% of total CO₂ emissions, making it a key sector for emissions in manufacturing. Given the high industrial linkages of the IaSI, it’s crucial to focus on its CO₂ emission patterns. This paper investigates the EKC hypothesis in the IaSI using data from 30 countries from 1990 to 2019. The results show that the EKC hypothesis is valid in the global IaSI. The study suggests that CO₂ emissions of the IaSI will peak when the per capita real GDP reaches $17,535 (constant price in 2010). Unlike emerging economies, the IaSI in advanced economies has reached the carbon peak. The robustness of this result is verified by an appropriate U test. Our results also show that a 1% increase in crude steel production will increase the CO₂ emissions of the IaSI by 0.675%; however, expanding the proportion of using electric arc furnaces to produce crude steel can substantially reduce CO₂ emissions. Discussions on the EKC curve of IaSI reveal significant policy implications for countries striving to achieve carbon peaking and neutrality targets.