Problem
Making steel and cement produces enormous amounts of pollution. Together, these two industries are responsible for about 16% of all the greenhouse gases released into the atmosphere every year. For a long time, the companies involved did not have to pay much for that pollution because governments gave them free passes, known as carbon allowances, that let them emit without charge. Those free passes are now being phased out across Europe, and new rules mean that companies importing carbon-intensive goods into the European Union (EU) will also face charges from 2026. For the first time, the biggest steel and cement makers in the world face a genuine and growing bill for their emissions, and nobody had worked out whether they could afford to pay it.
Science
Researchers at ³Ô¹ÏºÚÁÏ Business School built a detailed financial model to work out what rising carbon costs and the investment needed to clean up production would do to the finances of six major steel and cement companies: ArcelorMittal, Tata Steel, SSAB, CEMEX, Holcim and Heidelberg Materials. They ran the numbers across a wide range of scenarios, varying the future price of carbon, the cost of clean technology and how much of their rising costs each company could pass on to its customers. They used verified emissions data from the EU's official carbon registry, carbon price data from SparkChange, and cost estimates from the International Energy Agency (IEA) and McKinsey, covering the period from 2024 to 2050.
Outcome
The research, published in Communications Earth & Environment in April 2026, found that the single biggest factor in whether a company survives the shift to clean production is not how much it pollutes but whether it can charge its customers more to cover the cost. Companies that cannot pass on rising costs could see their profits turn negative as early as the early 2030s. Steel companies face the steepest challenge: under a middle-of-the-road cost scenario, they may need to raise up to six times their current market value to fully clean up their operations, with annual investment needing to be between 45% and 128% higher than it has been historically.
Change
The research shows that cleaning up heavy industry is not mainly a technology problem. Raising the sums required would force most companies to take on so much debt that their credit ratings would fall, pushing up their borrowing costs and making the whole process even more expensive. The findings matter for governments designing carbon pricing schemes, for banks deciding whether to lend to heavy industry, and for investors trying to work out which companies will still be standing in 2050.