Navigating the decarbonisation of steel production: a strategic roadmap for coal producers
Krüger, Christiaan (2025)
2025
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Tiivistelmä
The global push for decarbonisation presents coal producers particularly those supplying metallurgical coal to the steel industry with an urgent strategic dilemma. Should they adapt to technological and policy changes, diversify into adjacent markets, or exit coal altogether? While much of the existing literature focuses on decarbonisation from the steel producer’s perspective (IEA, 2020) this thesis re directs the focus and analysis towards the coal supplier. It fills critical literature gaps by offering a supply-side scenario framework and decision-making tools tailored to the unique challenges coal producers face during decarbonisation. The objective of this thesis is to analyse the strategic implications of steel industry decarbonisation for coal producers by assessing impacts on metallurgical coal demand, evaluating strategic responses, and proposing a decision-making framework for long term business continuity and sustainable adaptation to market changes.
The research employs a qualitative-dominant mixed methods approach, combining scenario planning methodologies such as the four archetypes, the shell method, and the 2x2 matrix with comparative case studies of coal suppliers and steel producers. Four coal-centric scenarios are developed based on two key uncertainties: the pace of technological change and the intensity of policy pressure. These are cross-referenced with coal-specific variables such as coal type whether it be thermal or metallurgical, regional market exposure, and policy environment.
The thesis introduces a new strategic decision-making framework that allows coal producers to match their risk exposure and internal readiness and capabilities to one of four strategic pathways, which are: adaptation, diversification, repositioning, or exit. This framework is validated through real-world case studies including BHP, Glencore, Tata Steel, Peabody, and ArcelorMittal, demonstrating how coal suppliers are beginning to adjust their business models during decarbonisation. Strategic alignment between scenario contexts and internal capabilities is shown to be essential for navigating transition risks and maintaining long-term value and continuity.
Key results of this research include: (1) developing the first scenario typology centred on coal producers in the context of steel decarbonisation, (2) distinguishing between thermal and metallurgical coal in strategic planning, and (3) incorporating regional imbalances in policy and market dynamics into coal supply strategy. The thesis offers practical, forward-looking tools for industry decision-makers while also enriching academic literature on industrial transition and climate-aligned resource governance.
The research employs a qualitative-dominant mixed methods approach, combining scenario planning methodologies such as the four archetypes, the shell method, and the 2x2 matrix with comparative case studies of coal suppliers and steel producers. Four coal-centric scenarios are developed based on two key uncertainties: the pace of technological change and the intensity of policy pressure. These are cross-referenced with coal-specific variables such as coal type whether it be thermal or metallurgical, regional market exposure, and policy environment.
The thesis introduces a new strategic decision-making framework that allows coal producers to match their risk exposure and internal readiness and capabilities to one of four strategic pathways, which are: adaptation, diversification, repositioning, or exit. This framework is validated through real-world case studies including BHP, Glencore, Tata Steel, Peabody, and ArcelorMittal, demonstrating how coal suppliers are beginning to adjust their business models during decarbonisation. Strategic alignment between scenario contexts and internal capabilities is shown to be essential for navigating transition risks and maintaining long-term value and continuity.
Key results of this research include: (1) developing the first scenario typology centred on coal producers in the context of steel decarbonisation, (2) distinguishing between thermal and metallurgical coal in strategic planning, and (3) incorporating regional imbalances in policy and market dynamics into coal supply strategy. The thesis offers practical, forward-looking tools for industry decision-makers while also enriching academic literature on industrial transition and climate-aligned resource governance.