By Akio Ito, Michael Poetzl, Hannah Zühlke and Robert Baron

Stainless steel producers are addressing Scope 1 & 2 emissions, yet their product carbon footprints often exceed those of conventional steel. The challenge lies upstream: ferroalloys essential for corrosion resistance carry emission factors up to 82,000 kg CO₂ per ton, making Scope 3.1 emissions the industry's largest and least controlled carbon source. Learn about three strategic pathways that leading producers are pursuing to reduce supply chain emissions and maintain competitiveness.

Global stainless steel production has grown substantially over the past two decades, reaching 62.6 million tons in 2024 – a 74% increase since 2010 and more than twice the rate of overall crude steel production. Looking ahead, production volumes are expected to continue growing, largely driven by demand from the construction, energy, aerospace, and defense sectors.

However, as production of stainless steel scales, so does scrutiny of its carbon footprint. End-consumer awareness and tightening regulatory frameworks, such as the EU Emissions Trading System (ETS) and EU Carbon Border Adjustment Mechanism (CBAM) are pushing buyers to evaluate the environmental impact of their steel purchases For stainless steel producers, this creates both pressure and opportunity.

The upstream emissions challenge

Although Western producers primarily use the secondary steelmaking route (melting scrap in electric arc furnaces, or EAFs), stainless steel often exhibits equal or higher product carbon footprints (PCFs) than carbon or alloyed steels, depending on the grade. This is because stainless steel’s defining characteristics, including corrosion resistance and durability require alloying metals, such as chromium, nickel, molybdenum, manganese and vanadium, added as ferroalloys.

These ferroalloys are produced from ores and sulfides, refined in energy-intensive smelting processes. Because much of this production occurs in remote or developing regions where fossil fuels dominate the energy mix, ferroalloys carry high PCFs and embedded emissions (Table 1). Even small quantities, these materials significantly increase the share of upstream (Scope 3.1) emissions of stainless steel.

Moreover, while integrated (blast furnace–based) producers must primarily decarbonize their production assets, secondary steelmakers face a different challenge: reducing the footprint of sourced input materials. Scope 3.1 emissions often represent the largest share of their overall PCF (Figure 3). While stainless steelmakers can achieve a footprint of ~2,000 kg CO₂ per ton, or less, for common grades such as 304 (Figure 3), PCFs for other grades can exceed more than 6,000 kg CO₂ per ton—well above many carbon steel benchmarks.

Three approaches to reduce Scope 3.1 emissions

The stainless steel sector faces a critical challenge; its largest emissions source lies outside direct operational control. While Scope 1 and 2 emissions can be addressed through facility upgrades or power procurement strategies, tackling upstream emissions proves particularly complex.

Roland Berger’s Materials & Process Industries practice works with leading steel companies worldwide to design scrap and alloy strategies, evaluate acquisitions, and build resilient supply chains. Combining deep industry expertise with strategic foresight, we help clients turn decarbonization challenges into sustainable competitive edges.

For steelmakers looking to futureproof their business model, our team has outlined three approaches to tackling Scope 3.1 emissions in stainless steel.

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