Steel is a carbon-intensive industry responsible for over 7% of global greenhouse gas (GHG) emissions, while the automotive industry is a key downstream user, accounting for approximately 12% of global steel demand. Notably, as of 2024, South Korea, China, and Japan collectively account for 61.2% of global crude steel production and 54.8% of consumption, placing these countries at the forefront of the steel supply chain’s decarbonization.

South Korean, Chinese, and Japanese automakers must transparently disclose GHG emissions from steel use, set clear green steel adoption targets and roadmaps, and strengthen participation in global initiatives. Clear, credible demand signals through longterm offtake agreements with steelmakers will be crucial in accelerating decarbonization for both the automotive and steel sectors.

To effectively assess and compare decarbonization strategies across steel supply chains, a consistent definition and standard for ‘green steel’ is essential. As corporate netzero transition accelerates, globally recognized standards are being required to ensure transparency and accountability.

In a rapidly evolving trade environment, the automotive industry faces significant tariff risks if it lacks a robust carbon reduction roadmap for raw materials. Conversely, by systematically managing supply chain emissions and proactively adopting green steel strategies, automakers can mitigate trade risks and strengthen their long-term global competitiveness.