Algoma, a steelmaker, is expediting its shift to electric steelmaking due to the impact of U.S. steel tariffs. Prime Minister Mark Carney engaged with President Donald Trump to seek relief from the 50% tariff burden faced by Canadian steelmakers since June, aggravated by low global steel prices attributed to Chinese oversupply. The company recently secured $500 million in government loans, citing the tariffs’ unsustainability on its blast furnace and coke oven operations, prompting a transition to electric steelmaking.
Amid economic strains and decarbonization pressures, Canadian steel producers are facing similar challenges. Steel production globally contributes 7-9% of greenhouse gas emissions, with Canada’s steel sector producing 13.1 megatonnes of CO2 in 2023, equivalent to emissions from three million gas-powered cars. The industry’s concentration in Ontario sees steel plants ranking among the top CO2 emitters in the province.
To address emissions, steelmakers are adopting various decarbonization strategies. Algoma, for instance, is embracing electric arc furnaces for secondary steelmaking, shifting away from traditional blast furnace operations to reduce carbon emissions by up to 70%. Meanwhile, ArcelorMittal Dofasco in Hamilton plans to substitute coal with hydrogen, aiming to cut emissions significantly by 2028.
Green initiatives in the steel industry have received government support, with investments made in transitioning plants to lower-carbon energy sources. Federal procurement standards now favor steel products with low emissions, reflecting a shift towards sustainable practices. The industry’s future competitiveness hinges on green policies to align with long-term decarbonization goals.
