Emission reduction strategies in the EU steel industry: Implications for business model innovation

Matilda Axelson, Sebastian Oberthür and Lars J. Nilsson

Journal of Industrial Ecology, 2021, vol. 25, issue 2, 390-402

Abstract: The European steel industry must achieve deep greenhouse gas emission reductions to become climate neutral by 2050. New business models are often proposed as one of the key solutions but are mostly addressed in general terms, without elaborating on or systematically analyzing how these new business models are actually linked to specific mitigation measures or strategies. In this paper, we assess when and to what extent different emission reduction strategies in the EU steel industry have implications for business model innovation. Through a review of 42 recent publications on industrial decarbonization, we identify 9 types of decarbonization strategies for steelmaking and their emission reduction potential. The strategies achieve emission reductions through material efficiency, emission efficiency, or a combination of both. For each strategy, we analyze the need for incremental or radical changes in business models on the basis of a thorough reading of the business model literature. Our findings show that EU steel firms can pursue several strategies to decarbonize without having to radically innovate their business models. Importantly, material efficiency strategies, arguably key to decarbonization, imply more radical changes to business models than emission efficiency strategies. Our study is a first contribution to the systematic assessment of industrial decarbonization strategies from a business model perspective. It is also an attempt to bring more rigor to the understanding of the role of business models in industrial decarbonization.

Date: 2021
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