
Breadcrumbs
Why the steel industry needs to tackle coal mine methane
Global steelmaking will continue to use coal, even under optimistic decarbonisation scenarios. The sector must address its upstream climate impact.
Highlights
+27%
Estimate of how much coal mine methane adds to the steel industry’s overall 20-year climate effect
2x
Some metallurgical coal from gassy mines can double a batch of steel’s global warming impact
-11%
The moderate projected fall in coking coal demand by 2030 under governments’ announced climate pledges
About
This report assesses data on coal mine methane (CMM) and steelmaking from the International Energy Agency (IEA) and other organisations. The steel industry’s current climate impact and how it might evolve under the IEA’s medium to long-term Global Energy and Climate Model scenarios is analysed before providing recommendations to industry stakeholders.
Executive summary
The steel industry needs to cut coal mine methane
Coal Mine Methane Analyst, Ember
Steel companies need to get real about the climate damage caused by metallurgical coal mining. This means starting to account for methane leaks, working with coal companies to close the gassiest mines, and demanding quick and deep cuts to emissions at operating mines. Getting to grips with coal mine methane is one of the cheapest and easiest ways to tackle the climate crisis.

Foreword
Addressing the climate impact of methane from metallurgical coal in steel production
Manfredi Caltagirone
Head of UNEP’s International Methane Emissions Observatory
Chapter 1 - Why steel CMM matters
Net zero steel pathways need to address coal mine methane
Chapter 2 - Scale of the problem
How much does coal mine methane add to the steel industry’s climate effect?
Methane isn’t generally considered by steelmakers as the emissions occur at the coal mine rather than the steel factory. Our calculations show this omission leads to at least 27% of the steel industry’s 20-year climate impact being ignored.
Chapter 3 - Reducing emissions
How to reduce steelmaking CMM emissions
Working underground mines are responsible for 90% of global CMM emissions, of which about 60-80% is emitted in very dilute form (typically less than 1% CH4) through the mine ventilation air methane (VAM). Underground mines’ methane emissions can be sharply reduced. Some CMM can be captured and utilised for heating or electricity production for the mine itself or to supply to nearby grids. Alternatively, VAM can be destroyed by oxidation or flaring. Further information on CMM best practices can be found in publications from the United Nations Economic Commission for Europe (UNECE) and United States Environmental Protection Agency (EPA).
Given that the 2021 Global Methane Assessment reports readily available targeted measures could reduce coal sector CH4 emissions by 12–25 Mt/yr, this represents 28-57% of global CMM emissions according to the latest data (43.6 Mt/year) from the IEA Methane Tracker. From 55% to 98% of these coal sector measures could be implemented at negative or low cost.
Chapter 4 - Recommendations
How steel industry stakeholders can reduce coal mine methane
Cutting CMM emissions will be crucial for steelmaking’s climate impact under forecasts for both 2030 and 2050. We outline steps that can be taken to reduce methane emissions by metallurgical coal mining companies, steelmakers, NGOs, national policymakers, and investors.
Recommendations for metallurgical coal mining companies:
- Look to the Oil and Gas Methane Partnership 2nd Framework (OGMP 2.0) as an example that could provide an effective framework for monitoring, reporting and verification of methane emissions. Through participation in the OGMP and associated reporting, oil and gas companies have been provided with a credible mechanism to address their methane emissions and to demonstrate reduced environmental harm.
- Implement methane mitigation plans at active and closed mines. Coal from gassy seams that cannot be sufficiently mitigated and emits more methane than average should be avoided as it causes disproportionate global warming.
Recommendations for steelmakers:
- Support coal-powered production phaseout as soon as possible. The IEA notes that for coal‐dependent heavy industries such as steelmaking, the year 2050 is just one investment cycle away. Around 60% of steel production facilities globally will undergo investment decisions this decade. The timeframes of needed decisions to reduce coal usage vary by region: 90% of European steel facilities are over 20 years old, while the average age of Chinese steel facilities is only 16 years.
- Engage with other stakeholders to create a framework that would outline targets and improve monitoring, reporting and verification (MRV) for the metallurgical coal industry. Adopting such a standard into steelmakers’ procurement processes could quickly cut purchases of high methane coal.
Recommendations for NGOs and organisations assessing clean steel pathways:
- Include CMM emissions in assessing the climate impact of both abated and unabated coal use in decarbonisation pathways. Carbon capture, utilisation and storage (CCUS) at coal-fired power plants is an unproven abatement technology at commercial scale. Potential CCUS investments need to be assessed including properly accounting for the methane released from potentially prolonging metallurgical coal mining.
- Consider avoided CMM as a benefit of increasing adoption of electric arc furnace and green hydrogen powered steelmaking.
Recommendations to national policymakers working on steel transition:
- Apply the 20-year global warming potential (GWP) to better consider the near-term influence of methane on climate change. National policies typically use the IPCC’s 100-year GWP of methane being 29.8 times more damaging than carbon dioxide. GWP has been noted as misrepresenting the physics of global warming and having “no place in describing the effects of climate change mitigation strategies beyond a 20-year horizon”.
- Include methane in carbon border adjustment mechanisms so that countries do not outsource their emissions. For example, this would mean that Japanese and Korean steelmakers should be accountable for their proportion of the methane emissions from Australian coal mines. Europe will need to consider methane from the coal which replaces Russian supply following the embargo after the invasion of Ukraine.
Recommendations to investors and investor groups:
- Recognise full lifecycle emissions in corporate assessments of steelmakers. The Science Based Targets initiative (SBTi) and other groups are making progress on including CMM in the steel industry’s lifecycle greenhouse gas assessments. This needs to become standard among investment industry environmental, social and corporate governance (ESG) ratings.
Support steel companies in developing regions to meet the high upfront capital costs of low‐emissions technologies. The debt‐equity ratio of a sample of listed steel producers in emerging market and developing economies (other than China) shows an average gearing ratio of nearly 200%, constraining their ability to finance low‐emissions projects.
Supporting Material
Acknowledgements
This report greatly benefited from the support and insights of many people and organisations including:
Lauri Myllyvirta and colleagues at Centre for Research on Energy and Clean Air; Tiffany Mayville at the Clean Energy Buyers Association; Roger Smith at Mighty Earth; Victoria Chu and Evan Gillespie at Climate Strategies Lab; Caitlin Swalec and Ryan Driskell Tate at Global Energy Monitor; Margaret Hansbrough; Monica Nagashima and Yuna Chang at Influence Map; Valentin Vogl at Lund University; Robert Kleinberg and Evan Sherwin at the Methane Emissions Technology Alliance; Harkiran Narulla and Ed Hill at The Sunrise Project; Robert Field, Małgorzata Kasprzak and Roland Kupers at the UNEP – International Methane Emissions Observatory; and Volha Roshchanka at the US Environmental Protection Agency.
Cover photo by Jim West / Alamy Stock Photo