In the context of volatile climate policy and shifting geopolitics, "decoupling" describes the separation of two previously linked metrics or relationships. The term, which gained prominence during U.S.-China trade tensions to describe the severing of high-tech supply chains, has evolved into a broader industrial mandate.
In the steel industry, it now refers to two main areas:
This refers to reducing CO2 emissions while maintaining or increasing steel production. Achieving "absolute decoupling," in which production grows while emissions decline through Hydrogen Reduction Steelmaking (HRS) and renewable energy, is seen as the only viable path to Net Zero. The industry aims to break the historical link between industrial growth and environmental impact.
This describes the collapse of global trade rules as major markets like the U.S., EU, and China form separate blocs. Each region is asserting its own standards, such as the EU's Carbon Border Adjustment Mechanism (CBAM), resulting in a fragmented landscape of independent regulations and carbon tariffs.
Unlike previous tech-focused decoupling, the current shift is driven by "Carbon Borders." Companies must now adopt "multi-local" strategies, creating separate decarbonization frameworks and procurement networks for each region to remain competitive.