Metallurgical coal outlook under steel's accelerated energy transition 1.5-degree scenario

Steel is responsible for 7% of global CO2 emissions. This industry needs a transformational change if the world is going to achieve a 1.5-degree warming pathway aligned to the goals of the Paris climate agreement. We have explored an alternative aggressive decarbonisation scenario, beyond our base case and AET 2.0 scenario, whereby steel follows a 1.5-degree warming pathway. The challenge is massive. A revolution in steelmaking is required for success. Under the AET1.5 scenario, we investigate the impacts to metallurgical coal, with demand intrinsically linked to virgin iron production. As hot metal production is replaced by scrap and DRI-fed EAFs, the global metallurgical trade faces stiffer declines than forecast under our AET2.0 scenario. Coal suppliers will face intense competition and lower price expectations.