Low-carbon reorientation in steel, oil refining and petrochemical industries: Final report for the Industrial Decarbonisation Research & Innovation Centre

Frank Geels, Julian Gregory

Research output: Book/ReportOther report


Steelmaking, oil refining and the petrochemical industries are still significant UK industrial CO2 emitters, and to meet its net-zero obligations, the UK needs to quickly decarbonise them. They have all significantly reduced their scope-1 greenhouse gas emissions in recent decades: steelmakers by 56% between 1990 and 2021, oil refining by 46% between 1996 and 2021, and petrochemicals by 88% between 1990 and 2019. However, these reductions arose from incremental energy efficiency improvements, removal of two very strong climate-forcing chemicals (HCFC-22, N2O); and industrial decline, rather than low carbon reorientation. This decline was especially marked in the steel industry (73% since 1973) and oil refining (57% since 1973), and somewhat less in petrochemicals (32% since 2008). Deeper decarbonisation will require the implementation of radical innovations like carbon capture and storage (CCS), low-carbon hydrogen (for fuel switching or hydrogen direct reduction of iron ore), feedstock change, or electric arc furnaces (for steel).

For our research, we analysed the three industries as separate case studies for over 30 years, through a longitudinal analysis and applying the Triple Embeddedness Framework (TEF), where we initially asked two research questions:
1) What have been the main contextual developments and business strategies in the three industries since 1990?
2) What do these longitudinal developments imply for the speed and direction of low-carbon reorientation in each industry, and their commitments to various low-carbon pathways?

The TEF sees industries as operating in both an economic environment and a socio-political environment, where industry responses to contextual pressures are shaped by an industry regime. Because low-carbon reorientation costs £billions, firms in industries are understandably cautious to commit to such expenditure, and therefore low-carbon reorientation requires an increase in external pressures for firms to respond. In response, firms tend to reorient through a sequence of steps: 1) denial, 2) incremental change, 3) exploration of radical innovations, 4) deployment of radical innovations, 5) deeper change in mindset and mission. The three case study analyses showed that oil refiners have moved from phase 3 to phase 4 since 2019, but that steelmakers and petrochemical firms are still in phase 3 (although after recent announcements by both TATA Steel UK and Jingye Steel, this may be about to change).
This report presents three industry longitudinal analyses that we carried out and published as stand-alone academic studies in Energy Research and Social Science (ERSS). It also comparatively reviews the net-zero transitional performance differences between the three industries to address a third research question:
3) What explains the varying speed of low-carbon reorientation across the three industries in the 2019-2023 period?

That comparative analysis focuses on five factors: a) policies, b) technical and practical feasibility, c) international competition, d) financial justifiability, e) wider corporate strategies and mindsets.
Original languageEnglish
Number of pages111
Publication statusPublished - Nov 2023

Research Beacons, Institutes and Platforms

  • Manchester Institute of Innovation Research


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