IN SUMMARY
Steel underpins almost every sector, but making it is responsible for 7 to 9% of global greenhouse gas emissions. In Indonesia, where the industry has grown around 21% a year since 2013, roughly 80% of production still uses the blast furnace–basic oxygen furnace (BF-BOF) route, one of the most carbon-intensive ways to make steel. With the EU’s Carbon Border Adjustment Mechanism and offtakers such as data centres and automakers demanding lower-carbon steel, Minviro carried out a life cycle assessment of Indonesian hot-rolled coil to quantify its footprint, find the hotspots, and set out the decarbonisation options.
Indonesian hot-rolled coil emits 2.2 kg CO₂e per kg. The blast furnace and basic oxygen furnace stages together account for more than half the total climate change impact.
Direct emissions are the dominant hotspot. Direct CO₂ from the blast furnace, converter, sintering and coke oven makes up 54% of the footprint, with energy use adding around 22% and quicklime 12%.
Process gases provide a large credit. Treating blast furnace and converter gases at the power plant, plus coke oven gas, delivers a combined credit of around -1.4 kg CO₂e per kg, materially lowering the net figure.
Why Indonesian steel is under pressure
Globally, around 70% of steel is made using metallurgical coke, and the iron and steel sector accounts for 7 to 9% of human-caused greenhouse gas emissions. Indonesia’s industry has expanded rapidly, but as of 2024 about 80% still relies on BF-BOF, which uses coke both as fuel and as the reducing agent that converts iron ore to metal, producing large direct CO₂ emissions in the process. That carbon intensity is becoming a commercial liability. The EU’s CBAM, the Ecodesign for Sustainable Products Regulation, carbon taxes in several markets, and voluntary low-carbon commitments from data centre operators and automakers all point the same way. A previous study also found Indonesia’s domestic emissions reporting standard does not meet CBAM requirements, which makes credible, internationally aligned measurement an urgent gap to close.
How the study was built
Minviro ran a cradle-to-gate LCA in its XYCLE software following ISO 14040 and 14067, with a functional unit of one kilogram of hot-rolled coil at the factory gate. The system boundary spans material preparation (sintering, pelletising and coke making), iron production in the blast furnace, steel production in the basic oxygen furnace, and continuous casting and hot strip milling, including upstream mining of iron ore, coal and limestone. Allocation was applied between steel plate and hot-rolled coil, with system expansion used for byproducts such as slag, top gases and chemicals from the gas power plant. Primary data on plant configuration, direct emissions and gas flows came from literature validated by Indonesian industry stakeholders, with results compared against figures from local NGOs and civil society organisations, and sensitivity analyses on feedstock, electricity and mass balances.