The steel industry in Pakistan includes both large firms in the organized sector and smaller manufacturers operating in the informal economy; however, the largest 20 companies cater to 80 percent of local steel demand. Contributing an estimated 2 percent to the country's Gross Domestic Product (GDP), steel manufacturing directly employs 200,000 people. Overall steel production in the country was around 8.4 million tonnes for FY24. Steel is an energy-intensive industry, requiring nearly 2.9 gigajoules of energy to produce one tonne of steel. Grid-supplied electricity is the major energy source in steel manufacturing, comprising over 80 percent of the overall energy consumption of an average integrated plant. Primary energy supply to the steel sector accounts for 6 percent of the overall national energy consumption; steel plants consume 6.4 percent of all industrial electricity, 3.7 percent of fuel oil, and 9.3 percent of natural gas. Both on-site fuel consumption and grid electricity contribute to sector emissions. According to Pakistan's latest greenhouse gas (GHG) inventory, steel plants emit almost 1.9 million tonnes of carbon dioxide (CO2) equivalent per year, or 2 percent of overall industrial emissions. This note describes decarbonization interventions to improve energy efficiency and reduce emissions in the steel sector while increasing industrial competitiveness and providing wider economic and environmental benefits
