Sustainable Material Writing: Environmental and Societal Risks in the Steel Supply Chain

2025 | Sustainable Materials | Carnegie Mellon University, MSSD

Challenge: Tasked with analyzing the supply chain of a critical material, I selected steel due to its global importance in construction and manufacturing. Understanding its full lifecycle, from raw extraction to end-of-life, posed a challenge because of the complexity of global supply chains, diverse processing methods, and associated environmental and societal risks.

Solution: By mapping steel’s journey through extraction, processing, manufacturing, distribution, use, and end-of-life, I assessed key environmental and social risks, including resource depletion, emissions, and labor impacts. The study proposes strategies for a more sustainable supply chain, including cleaner technologies, ethical sourcing, and circular economy practices.

Evaluating Environmental and Societal Risks in the Steel Supply Chain

Steel is one of the most essential construction materials in the modern world, forming the backbone of urban infrastructure, housing, bridges, and transportation systems. It seems indispensable to the global economy, especially in construction, due to its immense strength, durability, and recyclability. Half of the global steel demand is from construction, where it represents both a vital material for development and a critical source for environmental and social risk. When the industry produces 1,860 million tonnes of steel annually, these massive flows of material, energy, and resources contribute roughly 7 to 9 % of total anthropogenic carbon dioxide emissions. Through this paper, we are trying to evaluate the environmental and societal risks associated with the steel supply chain and explore potential strategies to make the supply chain more sustainable.

Beginning with raw material extraction and ending with recycling or disposal. Each stage involves geographic, energy, and social dimensions that form its sustainability profile. The steel-making process begins with mining iron ore and coking coal. These are the primary inputs for producing pig iron. Most of these reserves are located in Australia, Brazil China, whereas metallurgical coal is mined heavily in Australia, India, and the United States. These operations are usually open-pit with massive land disturbances, deforestation, and obviously a lot of water use. 

The extracted materials are either transported via rail or ship to process, often to a different continent, further contributing to the materials' embedded carbon footprint. Here, the ore undergoes crushing, grinding, and concentration to remove impurities. Though there are many production routes, the blast furnace and basic oxygen furnace use coke derived from coal to reduce iron ore into molten iron. An alternative would be direct reduced iron, natural gas, or hydrogen as a reducing agent. The direct reduced iron process, combined with electric arc furnaces (EAF), offers a lower carbon alternative when combined with renewable energy.

However, we have not made steel yet. The molten iron from the blast furnace should be refined into steel in an oxygen furnace. The steel is now cast, rolled, and shaped into rebars, plates, or structural sections. While the BF-BFO (blast furnace-basic oxygen furnace) is the most common global practice, it is also the most carbon-intensive, with over 2 tonnes of CO₂ emissions per tonne of steel. On the contrary, an EAF route could produce less than 0.5 tonnes per tonne of steel when powered by renewables.

Any material has to be brought to the site. Steel is taken to sites either via road, rail, or sea. As the majority of the use is for reinforcement (rebar), framing, and structural elements in buildings, the material is long-lived. The time it takes to reach the recycling loop is further away. However, towards the end of its life, steel can be recovered through deconstruction and recycling. Of all industrial materials, steel has one of the highest recovery rates, with more than 85% of construction steel being recycled globally. Although the availability of scrap steel is limited by the long service life of buildings, new primary production is still necessary to meet growing demand. This unique constraint affects the pace of decarbonization despite steel’s inherent recyclability.

Each stage of the steel supply chain has its own environmental and social risks that would affect the ecosystem and human communities. Understanding these risks is essential for developing effective sustainability strategies. The environmental consequences of iron ore and coal mining include land degradation, habitat loss, water contamination, and air pollution. Open-pit mining destroys large tracts of forest and agri land, displacing local populations and disrupting ecosystems. The storage of mine tailings has many hazards. Socially, mining regions face many issues of unsafe labor conditions, low wages, and limited community consultation. This leads to ongoing conflicts between mining companies and local residents.

The steel-making process itself is the most energy-intensive industrial activity. Traditional BF-BOF plants rely heavily on coal, leading to massive carbon emissions and local air pollution. Globally, steel emits approximately 2.6 gigatonnes of CO₂ annually. It also consumes huge amounts of freshwater for cooling and quenching. Let's not forget the environment it's made in, and how it affects the people. Workers in steel mills are exposed to extreme heat, noise, and air contaminants, posing chronic health risks. In many industrial regions, the concentration of steel production creates “fenceline communities” where residents experience elevated rates of respiratory and cardiovascular diseases due to poor air quality.

Finished steel components need to be transported, adding to the GHG emissions and the carbon footprint of the product. Within the construction phase, steel’s embodied carbon (the total emissions from production, transport, and fabrication) represents a significant portion of a building’s life-cycle footprint. While recycling steel substantially reduces energy use and emissions, unfortunately, the current scrap supply cannot meet total global demand. Alongside this, they usually operate under unsafe and unregulated conditions, exposing workers to hazardous environments. The transition to a circular steel economy thus requires both technical infrastructure and social safeguards to ensure equitable participation and safe working conditions.

To reduce, if not omit, the environmental and societal risks we have analyzed, the industry and policymakers should pursue a mix of technological innovation, governance reforms, and market-based measures. These interventions target different leverage points on the supply chain. The most critical change is part of decarbonization in production. Shifting from BF-BOF to EAF routes using scrap can significantly cut emissions. Especially when powered by renewable electricity or even hydrogen-based reduction. Are there any recent green steel projects upcoming in Europe and Asia using hydrogen-based DRI combined with renewables? This has reduced emissions by up to 95% per tonne of steel. Upstream, sustainable mining practices such as dry tailings disposal, ecosystem restoration, and independent monitoring can prevent environmental disasters and improve community safety.

During the construction phase, design for deconstruction offers a powerful strategy to extend the life and reuse potential of steel components. By prioritizing bolted rather than welded connections and maintaining material passports for steel elements, buildings can become material banks that feed future projects. The reuse of this structural steel can reduce embodied carbon by nearly doubling it compared to producing new steel from scratch.

Ethical sourcing and traceability are vital to addressing social risks in mining and steel production. International frameworks such as the ResponsibleSteel standard provide third-party certification for producers who meet labor, environmental, and governance benchmarks. Governments of the world can strengthen the enforcement of environmental regulations, mandate transparency in tailings management from affected communities before mining projects proceed. Within the industry, improving worker safety through automation, protective equipment, and training programs is essential to ensuring a just transition as the sector decarbonizes.

Other market-based interventions can accelerate the transition toward low-carbon steel. Buying cleaner as a policy has now been implemented in many regions and requires public infrastructure projects to source materials based on their embodied carbon amounts. Carbon pricing and emissions trading systems can internalize the environmental costs of steel production, making cleaner technologies more competitive. Simultaneously, investment in scrap collection infrastructure and incentives for circular construction can close material loops and reduce demand for unprocessed steel.

Technological innovations primarily affect the biosphere, reducing carbon and pollutant emissions. Governance reforms strengthen the social system, ensuring fair labor and safer communities. Market instruments reshape the economic system, aligning profitability with sustainability. Together, they form a comprehensive pathway for transforming the steel supply chain into a low-carbon, socially responsible system.

Steel, as a material in the construction industry, exemplifies the dual nature of industrial materials. From the mining pits of Brazil and Australia to the blast furnaces of China and the skyscrapers of New York, the steel supply chain represents both a global network of progress and a major source of planetary stress. Addressing its environmental and social risks requires action at every stage. Cleaner production tech, responsible sourcing, circular design, and supportive market mechanisms. Transitioning toward electric arc furnaces powered by renewable energy, expanding scrap recovery, and enforcing ethical mining standards can collectively reduce emissions, safeguard communities, and maintain steel’s crucial role in sustainable construction. In doing so, steel can evolve from being one of the largest industrial emitters to a cornerstone of climate resilience.

References:

International Energy Agency. (2024). Iron and steel sector: Decarbonization pathways. Retrieved from https://www.iea.org

McKinsey & Company. (2022). Net-zero steel in building and construction: The way forward.

Mongabay. (2020). Brumadinho dam collapse: Lessons from Brazil’s mining disaster.

U.S. Geological Survey. (2024). Iron ore statistics and information. Retrieved from https://www.usgs.gov

World Steel Association. (2024a). December 2023 crude steel production and global totals.

World Steel Association. (2024b). Climate change and the production of iron and steel.

World Steel Association. (2024c). Circular economy and steel recycling fact sheet.