Steel is a major industrial sector — but its production is highly carbon-intensive. As policymakers seek to drive demand for “green steel,” the sliding scale approach has emerged as a candidate for low-carbon labelling, offering a simple framework based on emissions and recycled content. However, Sandbag’s latest technical brief finds that this approach risks distorting incentives, overlooking product diversity, and undermining circularity. We propose a more robust, product-specific alternative to ensure certification systems support real progress toward decarbonisation.

This technical brief is published as the EU prepares its Industrial Accelerator Act (IAA), a flagship policy under the Clean Industrial Deal that is expected to introduce new product labelling for carbon-intensive materials such as steel and cement. As certification systems are developed to guide procurement and investment, the “sliding scale” approach is being widely debated. Sandbag’s brief unpacks the logic behind the sliding scale, highlights its risks, and sets out a more effective approach grounded in product-specific emissions benchmarks and circular economy principles. 

• Sliding scale methods distort incentives
  By tying emissions thresholds to scrap content, the sliding scale can create perverse incentives — rewarding producers for using less scrap, even if this leads to higher total CO₂ emissions. 

• Lack of product differentiation skews outcomes
  The sliding scale applies uniform thresholds that do not reflect the diversity of steel products or production routes. Products requiring high-quality inputs, such as flat steel or high-strength steels, can be unfairly penalised. 

• Circularity and transparency are undermined
  The current system does not distinguish between pre-consumer and post-consumer scrap and may encourage downcycling. This obscures real emissions and discourages closed-loop recycling of high-quality materials. 

• Sandbag proposes a product-specific certification model
  The brief introduces a new system built on product-specific benchmarks, a multi-tiered rating structure, and a downcycling adjustment to fairly account for scrap type and use. 

• A future-proof approach with broader sustainability potential
  Sandbag’s model includes a sliding time factor, allowing benchmarks to evolve in line with global climate targets. It also proposes a global sustainability indicator to incorporate environmental, social, and labour metrics alongside emissions. 

Photo by krzysztofdedek from Getty Images

Related Publications

March 13th 2025

More on steel