Indonesia produced nearly 17 million tonnes of crude steel in 2023, and output could reach 60 million tonnes a year by 2060. Meeting the country’s 2060 net-zero pledge means decarbonising a sector still dominated by blast furnace-basic oxygen furnace (BF-BOF) production.

Current roadmaps lean heavily on three electric arc furnace (EAF) routes. Those routes depend on scarce feedstock. High-grade iron ore suitable for direct reduction makes up less than 10% of global iron ore trade, and quality scrap is limited. The roadmaps also rely mostly on direct CO₂ accounting, which can make some technologies look better on paper than they perform across their full life cycle.

This whitepaper takes a wider view. It assesses the cradle-to-gate climate change impact of one kilogram of liquid steel across ten alternative iron and steelmaking routes, benchmarked against BF-BOF.

What’s inside

• Ten routes compared side by side. These cover smelting reduction, natural gas and hydrogen DRI paired with either an EAF or an electric smelting furnace (ESF-BOF), alkaline iron electrolysis, molten oxide electrolysis, and scrap-EAF.

• Three layers of carbon accounting. Results are shown for direct CO₂, then direct CO₂ plus electricity, then a full LCA with upstream supply chain impacts and environmental credits. You can see how the ranking of routes shifts at each step.

• The role of co-product credits. The paper explains how slag valorisation, process gas recovery and petrochemical co-products change the comparison, and where those credits do and don’t apply.

• A decarbonisation classification for each route. Every route is rated for fossil carbon dependency, carbon lock-in risk and the conditions it needs to deliver deep reductions.

• An indicative short-, medium- and long-term pathway. Facility characteristics are matched to the routes best suited to them.

Key findings at a glance

• Natural gas DRI routes cut direct CO₂ by more than 50%. Once credits for an optimised BF-BOF are included, though, their net impact is comparable to BF-BOF.

• Hydrogen DRI paired with an electric smelting furnace and BOF achieves up to a 60% net reduction. It can also run on lower-grade ore and existing BOF assets.

• Electrolysis-based and scrap-EAF routes deliver reductions of more than 80% under renewable electricity.

• Upstream supply chain impacts account for 40–50% of the net footprint across six routes, even in a best-case scenario. Direct-emissions accounting alone misses this.