Wasmuth, Carl (2026) Capital Allocation and Industrial Decarbonisation: A Comparative Case Study of Investment Decision-Making in the European Steel Industry. Bachelor thesis, Global Responsibility & Leadership (GRL).
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Abstract
The steel industry is responsible for approximately 7-9% of global greenhouse gas emissions and is therefore considered a critical sector in achieving global climate targets. Decarbonising steel production requires substantial long-term investments in technologies such as hydrogen-based direct reduced iron (H2-DRI), electric arc furnaces (EAFs), carbon capture and storage (CCS), and renewable energy infrastructure. However, these investments are characterised by high capital requirements, technological uncertainty, long payback periods, and strong dependence on external conditions. This thesis examines how steel producers with major European operations allocate decarbonisation investments and how time horizons influence these decisions. A qualitative comparative case study was conducted using annual reports from five steel companies: ArcelorMittal, Salzgitter, SSAB, Tata Steel, and thyssenkrupp. Corporate disclosures from 2016 and 2025 were analysed through qualitative content analysis. The study focused on five themes: capital expenditure, decarbonisation strategy, investment decision criteria, uncertainty and risk, and external support. The findings show that companies have significantly increased their commitment to decarbonisation investments since 2016. However, investment decisions remain strongly shaped by economic viability, technological maturity, and uncertainty regarding hydrogen availability, energy prices, infrastructure development, and future regulation. Large-scale decarbonisation projects are frequently phased over extended time horizons, while more transformative technologies are often deferred until enabling conditions improve. The analysis further demonstrates that public subsidies, regulatory frameworks, and industrial policy play a crucial role in reducing investment risk and enabling project implementation. The thesis concludes that a structural mismatch exists between conventional capital budgeting practices and the long-term requirements of industrial decarbonisation. As a result, the pace of steel sector decarbonisation depends not only on technological innovation but also on supportive policy frameworks that reduce uncertainty and improve the investment case for low-carbon technologies.
| Item Type: | Thesis (Bachelor) |
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| Name supervisor: | Rotulo, A. |
| Date Deposited: | 22 Jul 2026 13:12 |
| Last Modified: | 22 Jul 2026 13:12 |
| URI: | https://campus-fryslan.studenttheses.ub.rug.nl/id/eprint/895 |
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