Di Foggia, Giacomo; Becca ello, Massimo
A icle — Manusc ip Ve sion (P ep in )
Deca boniza ion in he Eu opean S eel Indus y:
S a egies, Risks, and Commi men s
En i onmen al Challenges
Sugges ed Ci a ion: Di Foggia, Giacomo; Becca ello, Massimo (2024) : Deca boniza ion in he
Eu opean S eel Indus y: S a egies, Risks, and Commi men s, En i onmen al Challenges, ISSN
2667-0100, Else ie , Ams e dam, Iss. A icles in P ess,
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Deca boniza ion in he Eu opean S eel Indus y:
S a egies, Risks, and Commi men s
Giacomo Di Foggia & Massimo Becca ello
P ep in
Published e sion a ailable online open access
Di Foggia, G., & Becca ello, M. (2024). Deca boniza ion in he Eu opean S eel Indus y:
S a egies, Risks, and Commi men s. En i onmen al Challenges, 100988.
h ps://doi.o g/10.1016/j.en c.2024.100988
Abs ac
This pape in es iga es he challenge o deca bonizing he s eel indus y, a pilla o he global
economy bu also a majo ca bon emi e . Analyzing cu en deca boniza ion s a egies along
wi h he ole o co po a e commi men and isk managemen o e s insigh s needed o
iden i y de elopmen pa hs in he cu en en i onmen cha ac e ized by s ingen
en i onmen al s anda ds and ie ce compe i ion. An empi ical app oach, including a su ey
model and simula ion, is used o answe p ominen esea ch ques ions. Aspec s such as he
in luence o en i onmen al and go e nance c i e ia, speci ic ini ia i es ha can be
unde aken, he impo ance o co po a e commi men , and he in eg a ion o isk
managemen in o s a egic planning a e examined. The deca boniza ion success p obabili y
del a be ween low and high commi men anges om 4.917 o 4.133 pe cen acco ding o he
le el o ene gy mix deca boniza ion. The in luence o he ene gy mix is also included in he
analysis. The esea ch highligh s he need o g ea e coo dina ion and commi men ac oss
he indus y o imp o e deca boniza ion e o s. I emphasizes he c i ical ole o go e nmen
policies and ma ke dynamics in shaping indus y ac ions owa d achie ing deca boniza ion
goals. The indings con ibu e o unde s anding deca boniza ion p ocesses, o e ing insigh s
and guidance o he s eel sec o 's ansi ion o a low-ca bon economy.
Keywo ds
Deca boniza ion, Co po a e Commi men , Risk Managemen , ESG C i e ia, S eel Indus y,
CBAM
In oduc ion
Limi ing global wa ming o 1.5 deg ees will equi e signi ican educ ions in g eenhouse gas
emissions (GHG) in he sho e m. Acco ding o IPCC es ima es, GHG should dec ease by
43% by 2030 and 60% by 2035 compa ed o 2019. A p ominen ole can be played by he
he s eel indus y, a key pilla o he global economy, ha is simul aneously a majo ca bon
emi e . Deca boniza ion in his sec o is a challenge and c ucial oppo uni y o align wi h
in e na ional en i onmen al goals (Rübbelke e al., 2022).
The indus y has adop ed a ace o deca boniza ion s a egies aimed a educing g eenhouse
gas emissions, including signi ican in es men s in ene gy e iciency (Pa do & Moya, 2013),
inc easing sel -gene a ion o enewable ene gy along wi h elec i ica ion o indus ial
p ocesses (Lopez e al., 2023), es ing eme ging cleane echnologies (Öhman e al., 2022),
and moni o ing and pa icipa ing in ca bon o se ing p ojec s (Cheng e al., 2023). The
ansi ion o cleane s eel p oduc ion is ne e heless hampe ed by se e al challenges,
including in e nal ac o s such as inancial cons ain s, he equi ed know-how,
compe encies, and commi men o design s a egies (Johnson e al., 2023), and ex e nal
ac o s such as he ene gy mix (Hassan e al., 2024) and global clima e ag eemen s.
P e ious li e a u e has iden i ied d i e s o and ba ie s o he deca boniza ion o he s eel
indus y. D i e s emb acing echnological solu ions such as ca bon cap u e and s o age
(CCUS), elec i ica ion, and uel swi ching ha e been iden i ied as p ominen (Luh e al.,
2020; Tok a o a e al., 2020). In addi ion o echnological changes, b oade socio echnical
ansi ions, including changes in use beha io , cul u e, policy, indus y s a egies, and
in as uc u e, a e essen ial o he ansi ion o deep deca boniza ion (Wesseling e al., 2017).
The li e a u e emphasizes he ole o policy op ions, socio echnical sys ems, and beha io al
ene gy e iciency in d i ing deca boniza ion e o s (Kim e al., 2022; Ponce de Leon Ba ido
e al., 2018). Symme ically, ba ie s o deca boniza ion include he lack o unde s anding o
e ec i e s a egies o u u e deep deca boniza ion in he s eel indus y, po en ial
implica ions o ca bon p icing (Becca ello & Di Foggia, 2023), and economic biases such as
he o e es ima ion o echnology mi iga ion po en ial and unde es ima ion o cos s (Åhman
e al., 2016; Wen e al., 2023).
Unp eceden ed challenges ha e eme ged p omp ed by he En i onmen al Social and
Go e nance c i e ia (ESG), 2050 deca boniza ion a ge s (Viei a e al., 2021), global
compe i i e p essu e, and en i onmen al policies based on ca bon p icing ma ke -based
mechanisms such as he Eu opean Emission T ading Sys em (ETS) (P esno e al., 2021), he
ca bon bo de adjus men mechanism (CBAM) (Rosse o, 2023), and ma ke and egula o y
compliance associa ed wi h deca boniza ion (Bashi e al., 2024; Kuma e al., 2024).
Consequen ly, in oday’s business en i onmen , a esea ch gap on how o o ge e icien
s a egies and a oid s a egic d i s has gained momen um. This a icle ills his gap by
empi ically examining e ec i e s a egies h ough a holis ic app oach ha conside s
deca boniza ion s a egies and managing associa ed isks, e.g. exogenous such as e olu ion
o na ional policies, manage ial, ma ke , egula o y, o echnical ones, p o iding a
comp ehensi e analysis ha can e ec i ely guide decisions.
This pape explo es c i ical esea ch ques ions ela ed o he e ec i e implemen a ion o
deca boniza ion s a egies. The i s is he cu en s a e o he a ega ding ESG c i e ia and
deca boniza ion commi men (RQ1). The hypo hesis is ha while he indus y p og esses, i
does so he e ogeneously, sugges ing ha be e coo dina ion could yield sha ed bene i s.
Nex , he pape del es in o he speci ic ini ia i es ha i ms can adop o e ec i ely enhance
hei deca boniza ion s a egies (RQ2). He e, he hypo hesis is ha common pa e ns exis
wi hin he indus y and can be le e aged o imp o e he e icacy o deca boniza ion s a egies
in di e se i ms. Ano he c i ical aspec is he ole o commi men in he deca boniza ion
p ocess (RQ3). I is hypo hesized ha measu able commi men , adequa e aining, and ision
a e c ucial o success ully implemen ing deca boniza ion s a egies, po en ially educing
ou come unce ain y. This s udy also ocuses on how i ms can op imize hei
deca boniza ion s a egies by applying iden i ied c oss-indus y le e s o inc ease he
expec ed ou come (RQ4) because inco po a ing isk assessmen o each deca boniza ion
ini ia i e enhances he s a egies’ e ec i eness and educes he unce ain y o ou comes.
Finally, he ma ke and egula o y compliance isks associa ed wi h deca boniza ion
s a egies (RQ5) a e explo ed. The hypo hesis is ha applying app op ia e isk managemen
decision ools can signi ican ly in luence he implemen a ion o s a egies, leading o
imp o ed s a egic planning and limi ing he isk o s a egic d i .
A me hodological app oach di ided in o ou main phases was adop ed, s a ing by analyzing
he a ailable in o ma ion and da a collec ed h ough in e iews o assess he ESG si ua ion.
The su ey ollows he de ini ion o KPIs and is based on Eu opean objec i es and he
guidelines o he na ional s eel indus y o measu e p og ess in sus ainabili y. The hi d phase
in ol es analyzing he isk managemen ha can in luence deca boniza ion s a egies.
Finally, conside ing he iden i ied isks, his s udy implemen s an algo i hm-based simula ion
o suppo s a egic decisions. This app oach combines quali a i e and quan i a i e analyses
o guide o ganiza ions owa d sus ainable choices.
This s udy analyzed he in e ac ion e ec be ween co po a e commi men and he na ional
poli ical con ex on he deca boniza ion p ocess in he s eel sec o . The esul s indica e a
di ec co ela ion be ween he le el o co po a e commi men o deca boniza ion and he
expec ed ou come, oge he wi h a educed impac on unce ain y. i msThis analysis
highligh s he impo ance o syne gy be ween go e nmen policies and co po a e ac ions,
highligh ing how a collabo a i e and in eg a ed app oach is undamen al o an e ec i e and
low- isk ansi ion o a low-ca bon economy.
The emainde o his a icle is o ganized as ollows: he li e a u e e iew ocuses on
deca bonizing he s eel indus y, explo ing he s a egies adop ed, he associa ed isks, and
he key ac o s d i ing his p ocess. A desc ip ion o he me hodology ollows. Nex , he
esul s a e p esen ed along wi h a simula ion de eloped o analyze a b oad spec um o isks
associa ed wi h hese deca boniza ion p ocesses o iden i y and educe hem. The conclusions
ollow. This analysis aims o p o ide a comp ehensi e and p ac ical amewo k ha can
assis s eel i ms in ansi ioning owa d mo e sus ainable p ac ices, balancing economic
needs wi h en i onmen al and social esponsibili ies.
Li e a u e Re iew
The s eel indus y plays a signi ican ole in global ca bon emissions, (Rynikiewicz, 2008).
The indus y’s impac on ca bon emissions is e iden in egions wi h subs an ial s eel
p oduc ion, ene gy consump ion, and ca bon emissions (He e al., 2020). Consequen ly, he
en i onmen al sus ainabili y o he s eel indus y is a g owing conce n (Goyal e al., 2018;
Goyal & Rou oy, 2021), and unsu p isingly, e o s o educe ca bon emissions in he s eel
indus y ha e been in es iga ed, highligh ing he po en ial o emission educ ions by 2030
(Ku amochi, 2016). Simila ly, esea ch indica es ha emissions ha e en e ed a peak pe iod,
making i necessa y o mee he 2030 agenda goals (H. Wang e al., 2023). Deca boniza ion
d i e s ha e been s udied in Eu ope, conside ing he Eu opean G een Deal and
deca boniza ion a ge s (Di Foggia & Becca ello, 2024) and Go e nmen policies ha e been
ecognized as c ucial ac o s in p omo ing he use o clean ene gy and s imula ing
sus ainabili y in he s eel indus y (Goyal & Rou oy, 2021).
The en i onmen al impac o his indus y also in ol es high esou ce consump ion and he
gene a ion o indus ial byp oduc s (Long e al., 2016; Nguyen e al., 2021). The ole o sc ap
ecycling in educing emissions in s eel plan s sugges s a commi men o he indus y’s ocus
on emission educ ion s a egies (Sahoo e al., 2019) conside ing he bene i s o s eel sc ap
ecycling in achie ing a ci cula economy and educing ca bon emissions (B oadben , 2016).
Low-ca bon echnologies and in eg a ed enewable ene gy ha e been explo ed o add ess
hese challenges, educe emissions, and imp o e ene gy e iciency (Liu e al., 2021). In
addi ion, he applica ion o g een echnologies has been iden i ied as a means by which he
s eel indus y can adap o en i onmen al equi emen s and gain a compe i i e ad an age (C.-
N. Wang e al., 2022).
Deca bonizing he s eel indus y is c i ical o add essing clima e change, gi en he signi ican
impac o s eelmaking on global ca bon emissions (Tian e al., 2018). Deep deca boniza ion
is essen ial o mee ing he 2050 emission a ge s because i equi es an accele a ed ansi ion
in ene gy-in ensi e p ocessing indus ies (Wesseling e al., 2017). To achie e clima e
neu ali y, he indus y mus de elop new business models and make maximum con ibu ions
o indus ial deca boniza ion (Axelson e al., 2021). In addi ion, global s eel sc ap lows and
hei ecycling can signi ican ly con ibu e o he deca boniza ion e o s o he global s eel
indus y (Cai e al., 2023).
Technoeconomic and en i onmen al assessmen s o deca bonized ossil-in ensi e indus ial
p ocesses and he phasing ou o blas u naces a e deemed essen ial o achie ing global
clima e goals (Co mos e al., 2020; Vogl e al., 2021). Elec i ica ion has been iden i ied as
a c ucial s a egy o minimizing ca bon emissions in he s eel indus y (Kleineko e e al.,
2022; Lech enböhme e al., 2016), and low-emission s eelmaking echnologies a e c i ical
o achie ing he expec ed le el o emission educ ion o e ec i ely add ess clima e change
(Jahanshahi e al., 2016).
The global demand o g een s eel is c i ical o ansi ioning o sus ainable, low-ca bon
indus ial p ac ices. Se e al ac o s con ibu e o he o ecas o g een s eel demand by 2050.
The ansi ion o deep deca boniza ion is essen ial o mee ing emission a ge s, and he s eel
indus y is expec ed o play a signi ican ole in his ansi ion (Wesseling e al., 2017).
S eel demand is expec ed o a leas double by 2050, wi h he s eel indus y gene a ing a
subs an ial po ion o global ene gy- ela ed emissions (Cullen e al., 2012). To add ess his,
he indus y is expec ed o ans o m, wi h he po en ial o con ibu e o deca boniza ion goals
h ough indus ial ca bon cap u e and s o age (Tian e al., 2018). The o ecas o global s eel
demand in 2050 is in luenced by se e al ac o s, including he ansi ion o a ci cula
economy and he ole o s ocks in he s eel cycle (Pauliuk e al., 2011).
The ansi ion o g een s eel p oduc ion in ol es highe cos s due o he adop ion o
al e na i e p oduc ion echnologies. Fo example, i has been es ima ed ha g een s eel
p oduc ion could be 20-30% mo e expensi e han con en ional s eel p oduc ion because o
he highe cos s o al e na i e p oduc ion echnologies (Muslemani e al., 2021).
The in eg a ion o enewable ene gy sou ces o ob ain g een hyd ogen signi ican ly
de e mines g een s eel p oduc ion cos s (Ca alie e e al., 2021). In addi ion, educing blas
u naces o mee global clima e goals is a complex conside a ion ha can a ec p oduc ion
cos s (Vogl e al., 2021).
The li e a u e has highligh ed he impac s o cos inc eases in he s eel sec o on cos s and
p ices u he up he p oduc chain, unde sco ing he in e connec ed na u e o cos
implica ions wi hin he sec o (Roo zén & Johnsson, 2016). Va ious ac o s, including
en i onmen al awa eness and poli ical suppo , in luence he ma ke accep ance o g een
s eel p oduc s. S udies ha e highligh ed he impo ance o c ea ing ma ke s o g een s eel
p oduc s and he challenges associa ed wi h deca bonizing s eel p oduc ion (Muslemani e
al., 2021). G een p oduc adop ion is c i ical o en i onmen al sus ainabili y, and he
ma ke ing li e a u e emphasizes he impo ance o g een p oduc adop ion in p omo ing
sus ainable p ac ices (Wan & Ha, 2021). In addi ion, a s udy on consume adop ion o g een
p oduc s has emphasized he ole o cul u al alues and consume awa eness as enable s o
g een p oduc adop ion (Na h e al., 2013).
Ma ke c ea ion policies can suppo he global di usion o low-emission p ima y s eel
p oduc ion, highligh ing he ole o policy in shaping he ma ke ecep ion o g een s eel
p oduc s (Vogl e al., 2020). The economic and en i onmen al impac s o a echnological
shi owa d hyd ogen-based solu ions o s eel p oduc ion ha e been s udied, shedding ligh
on he po en ial implica ions o ma ke ecep ion and adop ion o g een s eel p oduc ion
echnologies (Con e e al., 2022). The impac o g een p oduc knowledge on g een pu chase
in en ions was explo ed, emphasizing he ole o consume awa eness in d i ing g een
p oduc adop ion (Haide e al., 2020). Finally, en i onmen al legi imacy h ough g een
p oduc adop ion and i s e ec on b and alue ha e been s udied, indica ing he po en ial
impac o g een p oduc adop ion on ma ke ecep ion (Hashem, 2021).
Ano he co pus o li e a u e e e s o he impac o emissions ading schemes (ETSs) and
he ca bon bo de adjus men mechanism (CBAM) on he Eu opean s eel indus y, gi en ha
he impac on i ms (Ma in e al., 2016) co e ed by he sys em is ecognized. The po en ial
o ca bon leakage has been a conce n o ene gy-in ensi e indus ies (Aca e al., 2021), and
conce ns ha e been aised abou he e ec i eness o he EU ETS in add essing ca bon
leakage and i s impac on he compe i i eness o he Eu opean s eel indus y (Monjon &
Qui ion, 2011). The CBAM in ends o add ess ca bon leakage by imposing a ca bon p ice
on impo ed goods om speci ic sec o s, including s eel, on he basis o he EU ETS a e age
auc ion p ice. This mechanism c ea es a le el playing ield o Eu opean and o eign
p oduce s (B a o Gallegos e al., 2022). Howe e , he impac o CBAM on in e na ional
ade and i s ole in add essing ca bon leakage ha e also been discussed (Huang e al., 2022)
e en i he li e a u e is s ill limi ed. The in oduc ion o CBAM is expec ed o ha e signi ican
implica ions o in e na ional ade ela ions and he s eel indus y’s economic pe o mance
(Ko pa e al., 2022). In addi ion, he po en ial impac o CBAM on he economic
pe o mance o he s eel indus y has been he subjec o analysis, wi h a ocus on i s
implica ions o in e na ional ade and economic compe i i eness (Ulano & Sko oboga ko,
2022), conside ing a ious design op ions o e o ming he ETS and add essing ca bon
leakage (Isme e al., 2020). The po en ial implica ions o CBAM o es ablished business
models in he Eu opean s eel indus y ha e also been he subjec o analysis, ocusing on i s
po en ial o dis up exis ing ade ela ionships and economic sus ainabili y (Chupina, 2022).
I is e iden ha he easibili y o in es ing in enewable ene gy plan s inc eases and may
educe p oblems a ising om he adop ion o enewable ene gy sou ces in s eel p oduc ion,
which may ha e signi ican cos implica ions o inal demand (Khalid e al., 2021; Wall e
al., 2021).In eg a ing enewable ene gy in o p oduc ion p ocesses has been associa ed wi h
e o s o educe ene gy cos s and ca bon emissions, highligh ing he po en ial economic
bene i s o enewable ene gy adop ion (Ma e i e al., 2021). Howe e , he adop ion o
enewable ene gy echnologies a ies widely by p oduc ype, indica ing he complexi y o
cos implica ions in di e en applica ions (Ande son & Moncas e , 2023). In addi ion, he
economic easibili y o loa ing o sho e enewable ene gy acili ies has been e alua ed,
emphasizing he inancial conside a ions associa ed wi h enewable ene gy p ojec s (Cas o-
San os & Filguei a-Vizoso, 2019).
The po en ial o educing ca bon emissions by in eg a ing enewable ene gy and hyd ogen
in o he p oduc ion p ocess has also been analyzed, indica ing he impo ance o enewable
dependence on ex e nal consul ancy. i ms RQ4. How can i ms op imize hei
deca boniza ion s a egies by applying he iden i ied le e s o inc ease he expec ed
ou come? Hypo hesis: Inco po a ing isk assessmen o each deca boniza ion ini ia i e
inc eases he e ec i eness o he s a egies and dec eases he unce ain y o he ou comes.
To answe his RQ, a simula ion was designed and es ed o model he op imiza ion o
deca boniza ion s a egies h ough iden i ied ini ia i es and he e alua ion o associa ed
isks. RQ5: Wha a e he cen al ma ke and egula o y compliance isks associa ed wi h he
deca boniza ion s a egy? Hypo hesis: App op ia e isk managemen decision ools can
signi ican ly in luence he implemen a ion o deca boniza ion s a egies and imp o e
s a egy planning. Bo h analysises we e employed o iden i y he d i e s o enewable ene gy
de elopmen in Eu ope, conside ing hese as exogenous ac o s in deca boniza ion s a egies
and, he e o e, in he simula ion p oposed in his pape .
Scope and phases
ESG Assessmen
ESG assessmen is an essen ial componen in designing an e ec i e deca boniza ion s a egy.
This de ailed e alua ion was based on he analysis o a se ies o documen s and he
adminis a ion o ques ionnai es. This me hodological app oach, aimed a cap u ing and
analyzing meaning ul da a om di e en sou ces, is illus a ed and de ailed in Figu e 3.
Figu e 3: ESG Assessmen s eps
The main objec i e o his analysis was h ee old: i s , o p o ide c ucial da a o de ining
an indus ial deca boniza ion s a egy; second, o gene a e p oposals and sugges ions aimed
a in luencing poli ical decisions a he ins i u ional le el; and hi d, o o e guidance and
ad ice ele an o he inancial wo ld, pa icula ly he capi al ma ke .
Cleane p oduc ion
The esea ch ou lined a cleane p oduc ion s a egy ollowing he ESG assessmen desc ibed
in he p e ious sec ion. In his landscape, se ing deca boniza ion a ge s is an imposing
challenge and an essen ial equi emen o main aining compe i i eness in he s eel sec o .
The me hod adop ed o a icula e he deca boniza ion s a egy was based on a se o s a egic
and me hodical ac ions. Fi s , a s uc u ed app oach was adop ed o c ys allize
deca boniza ion goals, ollowed by mee ings wi h indus y expe s o en ich he analysis wi h
up- o-da e echnical knowledge and s a egic isions. This included an assessmen o a ge s
Fi msand conside a ion o ma ke -imposed deca boniza ion expec a ions om cus ome s and
he inancial sec o i ms. This is se o become an essen ial c i e ion o ensu ing ma ke
compe i i eness. Finally, KPIs we e gene a ed, as shown in Figu e 4. A educ ion in
emissions has been highligh ed as a p io i y KPI o educing he amoun o ca bon emi ed
pe on o s eel p oduced. This indica o measu es he e ec i eness o he deca boniza ion
measu es implemen ed. In addi ion, ene gy in ensi y is used o assess and op imize he ene gy
used o p oduc ion ou pu , aiming o g ea e ene gy e iciency. Inc easing he use o
enewable ene gy is ano he essen ial KPI in he ene gy domain ha encou ages a shi o
low-ca bon ene gy sou ces. Ca bon c edi o se s a e ecognized as complemen a y
measu es. While hey can con ibu e o achie ing clima e goals, he emphasis is on hei
unc ion as a suppo and no as a subs i u e o di ec mi iga ion s a egies. Rega ding
ma e ials and esou ce managemen , esiduals in ci cula p ocesses p omo e he ansi ion o
a ci cula economy by minimizing esiduals and inc easing he use o ecycled ma e ials in
p oduc ion p ocesses. Finally, speci ic wa e consump ion emphasizes he impo ance o
using wa e mo e e icien ly, educing consump ion pe p oduc ion uni and hus suppo ing
wa e conse a ion.
Figu e 4: Iden i ied en i onmen al KPIs
These KPIs p o ide a solid basis o s eel i ms o assess hei cu en ope a ions, de ine
s a egies o imp o emen , align wi h sus ainabili y goals, and espond e ec i ely o
egula o y and ma ke p essu es.
Iden i ying s a egic le e s is essen ial o ans o ming deca boniza ion and g een
p oduc ion goals om ambi ions o angible eali ies. Figu e 5 summa izes le e s ha , i
implemen ed, can enable he s eel indus y o ake conc e e s eps owa d educing i s
en i onmen al impac . These enabling ac o s a e ca ego ized by scope, ou lining he speci ic
ac ions e e ed o in Scopes 1 and 2. Al hough Scope 3 ep esen s a signi ican componen
o he alue chain, his esea ch ocuses exclusi ely on Scope 1 and 2.
Figu e 5: S a egic le e s
Fo Scope 1, he use o g een uels, adop ion o elec i ica ion measu es, inc eased ene gy
e iciency, and implemen a ion o ca bon cap u e, u iliza ion, and s o age (CCUS)
echnologies a e conside ed. These ac ions a e di ec ly con ollable by he company and
immedia ely impac he educ ion o emissions om i s p oduc ion ac i i ies. Unde Scope
2, sel -gene a ion o ene gy om enewable sou ces and he pu chase o g een powe
pu chase ag eemen s (PPAs) o gua an ees o o igin a e measu es ha help educe indi ec
emissions associa ed wi h elec ici y consump ion. In addi ion, deca boniza ion o he
na ional ene gy mix is a c ucial le e ha , al hough mo e elusi e o i ms’ di ec con ol,
in luences hei sus ainabili y p o ile.
Ma ke and egula o y compliance isk analysis
This desc ip ion p o ides a de ailed iew o how he model wo ks, emphasizing he
ela ionships be ween a iables and he impo ance o co po a e commi men o isk
managemen and deca boniza ion s a egy. Ini ially, simula ion assump ions a e included o
de ine exogenous con ex s ha a e no dependen on he deca boniza ion s a egy. Se e al
na ional ene gy mix scena ios and he p obabili y o achie ing he deca boniza ion a ge s in
2030 and 2050 a e s a ed in he NECPs, which ha e been ecen ly upda ed. In Equa ion 1
emixmin e e es o enewable ene gy sha e in elec ici y gene a ion, whe as in equa ion 2
imax s ands o maximum impac o each isk ac o aken in o conside a ion. In equa ion 3
educ ion is a ac o cap u ing he ole o exogenous ac o on co po a e s a egy. In Equa ion
4 he in e sion ela ion be ween commi men and isk is o malized. Simila ly, in Equa ion
5 he ole o ene gy e iciency in de ined o cap u e i s impac on o he a iables. Resul s a e
de ined acco ding o equa ion 6.
In Equa ion 1, he minimum alue o he ene gy mix co esponds o he coun y’s cu en
pe cen age o enewable ene gy 𝛼, while he maximum is de e mined by he coun y’s NECP
commi men , i.e., 𝛽 o 2030. This a ge is an in e media e s ep owa d deca boniza ion in
2050. Nex , a alue ha o malizes he model can be e e ed o as andom because i is
gene a ed be ween hese limi s. This s ep cap u es he a iable ha conside s he a ge
coun y’s pe o mance in achie ing he goals. This is an essen ial s ep because i allows o
changing he lowe and uppe bounds and enables be e in e na ional benchma king. This
a iable can be se a a le el compa ible wi h each NECP, as indica ed in Equa ion 1.
𝑒𝑚𝑖𝑥𝑚𝑖𝑛 = 𝛼, < 𝑒𝑚𝑖𝑥 < 𝑒𝑚𝑖𝑥𝑚𝑎𝑥 = 𝛽 (1)
Nex , co po a e commi men , ep esen ed by commi men , is se . These alues can a y on a
scale (e.g., a Like scale), wi h minimum and maximum alues indica ing he le el o
commi men . Fo a commi men o be c edible, i mus be e i iable h ough in o ma ion
included in non inancial s a emen s and communica ion channels o s akeholde s. Risk
a iables a e gene a ed on he basis o he analysis o he isk managemen s a egy, and he
alue o some o hem is impac ed by he alues assumed by he commi men a iables. The
maximum alue o each isk a iable depends on he numbe o ac o s iden i ied in
Equa ion 2:
𝑣𝑖𝑚𝑎𝑥 =100 − 𝑒𝑚𝑖𝑥
𝑛 (2)
The ene gy mix is assumed o a ec some isk a iables h ough a nega i e co ela ion. Fo
example, some a iables dec ease p opo ionally as he pe cen age o enewable ene gy in
he ene gy mix inc eases in addi ion o 𝛼 in he way p oxied by Equa ion 3:
educ ion = max(0, (𝑒𝑚𝑖𝑥 − 𝛼)× 𝛿) (3)
The equa ion s a es ha isk educ ion is di ec ly p opo ional o he deca boniza ion o he
ene gy sys em. The o mula calcula es he educ ion by mul iplying he di e ence be ween
he o e all deca boniza ion le el and 𝛼, which is he lowe limi o he pe cen age o
enewables in he ene gy mix, by he ac o 𝛿, a scaling ac o ha de e mines he in ensi y
o he educ ion. In his pape , we ocus on he ole o s a aining and he deca boniza ion
s a egy. The model modi ies se e al isk a iables acco ding o he le el o co po a e
commi men , as o malized in Equa ion 4. This modi ica ion is ep esen ed by an in e se
unc ion, indica ing ha as he le el o commi men inc eases, he isk associa ed wi h
speci ic a iables dec eases. The ela ionship can be exp essed using he ollowing gene ic
o mula:
𝑅𝑖𝑠𝑘 = 1
𝑓(𝐶𝑜𝑚) (4)
whe e 𝑓(𝐶𝑜𝑚) is a unc ion ha e lec s i m commi men . This ela ionship ep esen s he
p inciple ha g ea e commi men on he pa o he company o ain s a o adop
deca boniza ion s a egies leads o educed isks associa ed wi h hese issues. The speci ic
unc ion 𝑓(𝐶𝑜𝑚) can be cus omized o he needs and cha ac e is ics o he company, hus
p o iding lexibili y in he applica ion o he model.
The ela ionships be ween ene gy e iciency and o he isk ac o s a e gi en in Equa ion 5.
I he ene gy e iciency is below a se h eshold, i impac s o he isks, such as he pu chase
o ca bon c edi s and ca bon cap u e. This logic is based on he idea ha high ene gy
e iciency can educe he need o depend on ex e nal s a egies such as pu chasing ca bon
c edi s o in es ing in ca bon cap u e and s o age echnologies, he eby educing he isks
associa ed wi h hese ini ia i es. The h eshold and amoun o isk educ ion can be adjus ed
acco ding o he speci ic needs and eali ies o he model you a e building. This simpli ica ion
illus a es how ela ionships be ween a iables could be es ablished in such a model. In
eali y, hese ela ionships migh be complex and equi e mo e de ailed analysis o de e mine
he app op ia e alues o use. When he ene gy e iciency is below a ce ain h eshold, he
impac a iables a e also educed by he same amoun o each uni o educ ion. This can be
ma hema ically exp essed in Equa ion 5.
Reduc ion𝑣𝑎𝑟𝑠 = max(0,le el − 𝑒𝑓𝑓) (5)
This o mula ion c ea es a di ec , p opo ional co ela ion: he g ea e he disc epancy
be ween he cu en ene gy e iciency and he h eshold is, he g ea e he educ ion in ela ed
a iables. Then, he o al isk impac and he expec ed ou come o he deca boniza ion
s a egy a e calcula ed. The expec ed ou come is g ea e be ween he cu en o p ojec ed
ene gy mix and he emaining measu e o success a e conside ing he o al isk impac . In
essence, his o mula balances cu en o planned ene gy deca boniza ion agains po en ial
isks, choosing he alue ha indica es he g ea es success. In summa y, his equa ion
e alua es he expec ed ou come o he deca boniza ion s a egy by conside ing bo h he le el
o ene gy deca boniza ion and he o e all impac o he isks associa ed wi h he s a egy.
Equa ion 6 p o ides a quan i a i e es ima e o he easibili y and e ec i eness o a
company’s deca boniza ion s a egy.
𝑂𝑢𝑡𝑝𝑢𝑡 = max(𝑒𝑚𝑖𝑥, 100 −sum o isks) (6)
Finally, he esul s a e isualized, p o iding insigh s in o he po en ial success o he
company’s deca boniza ion s a egy. The model o e s he possibili y o cus omiza ion by
adap ing i o speci ic needs. These speci ic needs a e subjec i e and depend mainly on he
company’s s a egic posi ioning. This s udy also p esen s a panel eg ession model
o malized in Equa ion 7 designed o examine he dynamics and mul iple in luences in he
con ex o NECP a ge s.
𝑦𝑖𝑡 = 𝛽0+ 𝛽1𝑥1𝑖𝑡 + 𝛽2𝑥2𝑖𝑡+. . . +𝛽𝑛𝑥𝑛𝑖𝑡 + 𝑢𝑖𝑡 (7)
I is essen ial o emphasize ha achie ing he NECP a ge s is ea ed as an exogenous
a iable. While he a iables ela ing o commi men and o he elemen s can be conside ed
endogenous and in e dependen , he NECP a ge s a e in luenced by a b oade and mo e
complex se o de e minan s ha go beyond he di ec ield o applica ion o he ma ke and
egula o y isk analysis model.
Resul s
The main esul s a e epo ed as inhe en in he ESG assessmen o answe RQ1 and he
s a egic le e s iden i ied in Table 4 ega ding RQ2. The esul s o RQ3 analyze he ole o
commi men as pe RQ3, and o RQ4, he combina ion o co po a e commi men and ene gy
policy is analyzed, as highligh ed in Tables 5 and 6. Finally, he simula ion model o RQ5
emphasizes he complexi y o deca boniza ion, highligh ing he impo ance o isk
managemen in s a egic planning.
Table 3 p esen s a consolida ed summa y o he en i onmen al aspec s o a b oad ESG
assessmen . The analysis encapsula es a ious i ms and p o ides a concise o e iew o
s anda d en i onmen al p ac ices, challenges, and a eas o imp o emen . The i s wo
columns ou line he main en i onmen al ac o s examined du ing he assessmen and he
agg ega e esul s, highligh ing a eas whe e i ms ha e been success ul and gaps ha needed
o be illed o be ESG complian acco ding o he s a egies. The “S a egies” column
in oduces ac ionable ecommenda ions ailo ed o p ac i ione s, ou lining pa hways owa d
be e en i onmen al managemen . Acco dingly, he “public policy” column sugges s
a ge ed go e nmen in e en ions o incen i ize indus ial deca boniza ion. Finally, he
“Finance” column p o ides s a egic clues o inancial ins i u ions o suppo g een
in es men s.
Table 3: ESG Assessmen – ocus on (E)
Scope e alua ed
ESG
assessmen
S a egies
Public policy
Finance
En i onmen al
Managemen
S anda diza ion
, p ocedu es,
epo ing, and
pe o mance
moni o ing.
Repo ing
sys ems o
moni o
en i onmen al
pe o mance
En i onmen al
ce i ica ion
incen i es
En i onmen al
ce i ica ion
inancing.
Pollu ion
Indi idual
ac o ies,
g oup-wide
coo dina ion,
common policy
lack, and
en i onmen al
impac
educ ion.
S anda d
policies o
educing
en i onmen al
impac ,
incen i ize by
sus ainabili y
esponsibili y
p og ams.
Deca boniza io
n R&D
Funding.
Pollu ion
educ ion
in es men
unds.
Ene gy
Managemen
Ene gy
managemen ,
ene gy-
in ensi e i ms,
lack o speci ic
policy,
enewable
ene gy
explo a ion.
De elop
speci ic ene gy
managemen
policies ha
emphasize
enewable
ene gy use.
Renewable
in eg a ion
g an s and
bonuses
Ene gy
e iciency and
enewable
incen i es
Clima e Change
Clima e change
s a egy, g oup
oles, isks, and
quan i a i e
a ge s
S a egies o
add ess clima e
change,
including
quan i a i e
a ge s and
speci ic ac ion
plans.
Emission
educ ion
acili ies.
Clima e Goals
In es men
P oduc s.
Emissions
GHG emissions
calcula ion,
lack o a ge s,
Es ablish clea
and quan i iable
a ge s o
Ca bon c edi
incen i e
p og ams.
G eenhouse
Gas Reduc ion
Bonds.
Scope e alua ed
ESG
assessmen
S a egies
Public policy
Finance
and ac ion plan
absence.
educing
emissions wi h
dedica ed ac ion
plans.
Wa e esou ces
Wa e impac
policy absence
and closed-loop
wa e euse.
de elop policies
o he
sus ainable
managemen o
wa e esou ces
by p omo ing
conse a ion
and euse
p ac ices.
Wa e
conse a ion
and euse
unding.
Wa e
Conse a ion
and Reuse
Funding.
Biodi e si y
Biodi e si y
impac
educ ion lacks
soil p o ec ion
p ocedu es.
Policies o
minimize
impac s on
biodi e si y,
including
speci ic ac ions
o p o ec soil
and local
ecosys ems.
Biodi e si y
and Soil
P o ec ion
Suppo .
Biodi e si y
P o ec ion
Financial
Suppo .
Raw Ma e ials
Raw ma e ial
use educ ion,
en i onmen al
impac , ci cula
economy.
Ci cula
economy
p ojec s by
adop ing
p ocu emen
and aw
ma e ial use
p ac ices ha
educe
en i onmen al
impac .
Ci cula
Economy and
Ma e ial
Sus ainabili y
Incen i es.
Ci cula
Economy
In es men
Encou agemen
.
Was e
Managemen .
Plan -le el
managemen
and common
policy absence.
Policies o
was e
managemen
and ecycling,
p omo ing
ma e ial
educ ion and
euse.
Was e
managemen
and ecycling
unding.
Was e
managemen
echnology
unding.
Scope e alua ed
ESG
assessmen
S a egies
Public policy
Finance
Deca boniza io
n s a egy
2030 and 2050
commi men s,
loosely de ined,
he e ogeneous
base yea s.
Deca boniza io
n s a egies wi h
clea a ge s and
deadlines.
Low-ca bon
echnology
adop ion
incen i es.
Low-Ca bon
ansi ion
inancial
p oduc s.
Sou ce: The au ho s
Recognizing he c i ical in e play be ween indus y ac ions, go e nmen egula ions, and
inancial mechanisms, we ha e also included o wa d-looking s a egies, public policy
ecommenda ions, and inancial p oposals. These a e designed o complemen and enhance
he esul s o ESG assessmen s, o e ing aluable insigh s and ac ionable di ec ions. This
app oach highligh s he exis ing e o s and gaps in en i onmen al managemen and p oposes
a ajec o y o sus ainable de elopmen in line wi h global en i onmen al goals. The
addi ional sugges ions s eng hen indus y p ac ices, in o m decision making, and guide
in es men decisions, hus con ibu ing signi ican alue o he discou se on en i onmen al
managemen .
Table 4 summa izes key indings om he assessmen o deca boniza ion ini ia i es,
ou lining bo h he d i e s and isks associa ed wi h each ini ia i e and he scope o hese
ac ions and challenges and he commi men s ha i ms can make o mi iga e isks and
s eng hen he success o hei en i onmen al s a egies.
Table 4: Le e s
Ini ia i e
Risk
Type
Ac ions
Deca bonizing he
ene gy mix
Delayed
deca boniza ion policies
Exogenous
Cons an ly moni o he
coun y’s ca bon in ensi y
le el.
T aining and analysis o
he ene gy and ma ke
scena io
Lack o skills and a
p ospec i e ision
Managemen
S a aining and
collabo a ion wi h
uni e si ies and esea ch
ins i u es.
Clea deca boniza ion
s a egy
Sca ce alignmen
Managemen
De ine a deca boniza ion
s a egy by in ol ing
in e nal s a
Table 7 shows wo e sions o he same model: (1) e e s o all Eu opean coun ies, whe eas
(2) cap u es he e ec o he sample on he achie emen o NECP a ge s.
Table 7: Reg ession analysis
(1)
(2)
VARIABLES
Dis ance o a ge s
Dis ance o a ge s
g i
-1.372*** (0.495)
-1.447*** (0.503)
es
0.700*** (0.101)
0.702*** (0.0980)
os
0.796*** (0.0251)
0.790*** (0.0254)
hid
-0.265***(0.0431)
-0.271***(0.0436)
ebu
-0.00022*** (6.30e-05)
-0.00021*** (6.38e-05)
e e
-2.621*** (0.814)
-2.698*** (0.828)
pop
0.201** (0.0853)
0.216** (0.0909)
mk
0.137*** (0.0263)
0.139*** (0.0267)
p i
-0.00022** (9.86e-05)
-0.00027** (1.00e-04)
cin
0.597*** (0.184)
0.623*** (0.186)
sample
-1.505 (4.102)
Cons an
-42.67*** (4.660)
-41.83*** (5.112)
Obse a ions
297
297
Numbe o ID coun y
27
27
R2
0.9632
0.9629
Wald chi2
5568.43
5399.52
Sou ce: The au ho s.
Table 7 con ains some in o ma ion ega ding he de e minan s ha can d i e o slow he
mee ing o NECP a ge s. Fossil sou ces ha e been con i med o be in luen ial in slowing
down he pa h owa d he ene gy objec i es o a coun y, wi h a p onounced e ec . A he
same ime, an inc ease in he pe cen age o enewables inc eases he ma ginal cos o u he
de elopmen . I is impo an o cla i y ha hese obse a ions e e no o he gene al
de elopmen o enewables bu speci ically o he a ge se in he NECPs. In addi ion, he
ma ke concen a ion sugges s ha g ea e compe i ion in he elec ical sec o could slow
deca boniza ion. T anspo elec i ica ion has a signi ican e ec . Consis en ly, he densi y
o he dis ibu ion ne wo k has a signi ican in luence, con i ming his hypo hesis.. These
da a con i m he impo ance o in es men s in enhancing and ex ending he elec ical
dis ibu ion ne wo k. Finally, he p ice signal a iable co esponds o he in ake o wholesale
p ice incen i es o enewable ene gy p oduce s, e en i his is no s a is ically signi ican .
Discussion
This a icle p o ides a signi ican con ibu ion om bo h a heo e ical and p ac ical poin o
iew, p oposing mo e a ge ed and e ec i e solu ions o he sec o ’s deca boniza ion
ocusing on in e nal and ex e nal ac o s impac ; speci ically i ms commi men in
deca boniza ion s a egies. The success p obabili y del a be ween low and high commi men
anges om 4.917 o 4.133 pe cen acco ding o he le el o ene gy mix deca boniza ion.
This a icle sha es some simila i ies wi h p e ious s udies. Fo example, Kim e al. (2022)
e alua ed cu en and eme ging p ac ices o deca boniza ion and iden i ied 86 po en ially
ans o ma i e echnologies. Simila ly, Malle & Pal (2022) unde line ha he adop ion o
echnologies ha educe ca bon emissions is an impo an pa h o deca boniza ion and ha
collabo a ion and go e nmen e o s can ca alyze such inno a ions. Acco ding o Lö g en
& Roo zén (2021), e o s o enhance coo dina ion a e c ucial o accele a ing
deca boniza ion, indica ing ha implemen ing policy measu es o educe such ba ie s is a
p ima y ocus. Focusing on ene gy e iciency, Di Foggia e al. (2022) also e e ed o suppo
policies as an essen ial aspec o deca boniza ion.
The analysis e ealed ha i ms ha e planned o ini ia ed p ojec s, bu he a ge s a e
some imes no de ined explici ly. Al hough se e al posi i e o wa d-looking pieces o
in o ma ion eme ged om he su eys, we a gue ha addi ional e o s should be made o
ad ance deca boniza ion. Simila conclusions we e d awn by Villa anca Casas e al. (2024),
who, based on a su ey o s eel p oduce s, ound ha app oxima ely 14 ou o he 30 a ge s
did no p o ide an emission educ ion plan. The indings o his s udy a e c ucial o
e alua ing he ansi ion owa d sus ainabili y in he s eel sec o . They highligh ed ha s ong
co po a e commi men and e ec i e demand analysis (Na h e al., 2013) a e c ucial o
success.
The indings signi ican ly impac i ms’ s a egic and ope a ional app oaches, d i ing g ea e
awa eness and p epa edness o add ess en i onmen al challenges. The e o e, his esea ch
con ibu es o a be e unde s anding o deca boniza ion p ocesses and o e s essen ial
guidelines o he sec o . The indings p o ide insigh s in o he RQs posed. Fo RQ1, he
indings con i m he ini ial hypo hesis o he e ogeneous p og ess in he indus y. As de ailed
in Table 3, he analysis e ealed a dispa i y in he commi men and execu ion o
deca boniza ion e o s ac oss di e en i ms. While some ha e shown se ious commi men
and made no able in es men s in enewables and ene gy e iciency, a lack o uni o mi y and
coo dina ion emains a p ominen issue. Fo RQ2, as summa ized in Table 4, se e al le e s
we e iden i ied, such as he deca boniza ion o he ene gy mix, which i ms can employ o
bols e hei en i onmen al s a egies. Conce ning RQ3, he indings suppo ed he
hypo hesis ha in e nal s a aining and in ol emen a e c i ical. The s udy showed ha
compe encies, knowledge, and i m manage ial ision, coupled wi h clea ly de ined and
measu able s a egies, signi ican ly enhance he success o deca boniza ion s a egies and
educe hei isks. This emphasizes he impo ance o cul i a ing an in o med and engaged
wo k o ce o achie e en i onmen al goals. Fo RQ4, he esul s con i m he ole o bo h
commi men and ene gy policy, as shown in Tables 5 and 6. Swi ching o RQ5, he simula ion
ein o ces he hypo hesis ha unde s anding and managing hese isks is c ucial o s a egic
planning. The model’s abili y o in eg a e a ious ac o s, including hose beyond a
company’s con ol, such as he NECP a ge s, illus a es he complex in e play be ween
indus y ac ions, go e nmen egula ions, and ma ke dynamics in shaping deca boniza ion
s a egies.
Consis en wi h expec a ions, he deca boniza ion ou come is impac ed by public policy and
he e olu ion o he ene gy mix (Åhman e al., 2016), which a e ex e nal ac o s ou side o
di ec co po a e con ol. Tha said, some manage ial implica ions a e as ollows: in-dep h
analysis and unde s anding o he ene gy scena io and ma ke equi e a co po a e g een ision
(Holappa, 2020; Jha & A o a, 2013) o a oid s a egic d i . Managing ca bon c edi s
in ol es isks associa ed wi h co po a e epu a ion and egula o y compliance, implying he
need o adhe e o s ic e hical and egula o y s anda ds (Abadie e al., 2024; Blum &
Lö b and, 2019). G een uels, such as hyd ogen, ace he isk o supply delays, a ma ke
a iable ha unde sco es dependence on ex e nal supply chains. Howe e , acco ding o
And ade e al. (2024), using biomass in he s eel indus y may educe he ma ginal cos o
s eel. Pu chasing PPAs and gua an ees o o igin a e limi ed by a ailabili y and p ice
ola ili y, which a e ma ke ac o s ha can a ec ene gy s a egy and inancial s abili y.
Sel -gene a ion o enewables aces unce ain de elopmen cos s, bu eauc acy, and
egula o y ac o s ha can impose signi ican delays.
The limi a ions o his s udy dese e a en ion. Focusing only on s eel mills using he EAF
p ocess may no ully ep esen he a ie y o challenges encoun e ed in o he ypes o s eel
p oduc ion. Fu he mo e, he use o subjec i e simula ion c i e ia can in luence he
objec i i y and eplicabili y o he esul s. Finally, unce ain ies ega ding he objec i es o
he NECPs add a u he le el o a iabili y and po en ial imp ecision in applying he s udy
esul s. These limi a ions highligh he need o mo e ex ensi e and di e se esea ch o
comp ehensi ely add ess deca boniza ion in he s eel sec o . The policy implica ions o he
indings a e b oad, unde sco ing he need o policies ha p omo e collabo a ion be ween he
public and p i a e sec o s o deca boniza ion. This includes adop ing inancial and
egula o y incen i es o encou age he use o low en i onmen al impac echnologies,
suppo ing echnological inno a ion, and implemen ing measu es o educe emissions.
Fu he mo e, he s udy highligh s he impo ance o adequa e inancial s a egies o suppo
hese ini ia i es, emphasizing he need o join and coo dina ed e o s o e ec i ely add ess
sus ainabili y challenges in he s eel sec o .
Conclusion
Limi ing global wa ming o 1.5 deg ees will equi e signi ican educ ions in g eenhouse gas
emissions by 43% by 2030 compa ed o 2019. This s udy has analyzed deca boniza ion
s a egies highligh ing he impo ance o co po a e commi men and isk managemen .
This s udy makes a signi ican con ibu ion o he li e a u e on deca boniza ion by
in oducing a sophis ica ed me hod o isk analysis and highligh ing he impo ance o
co po a e commi men and go e nmen –indus y collabo a ion.
The s eel indus y is p og essing in i s commi men o deca boniza ion, albei
he e ogeneously ac oss coun ies and indus ies. This lack o uni o mi y unde sco es he need
o g ea e coo dina ion o enhance en i onmen al managemen ac oss indus ies. This a icle
p o ides a signi ican con ibu ion o he sec o ’s deca boniza ion: he success p obabili y
del a be ween low and high commi men anges om 4.917 o 4.133 pe cen acco ding o he
le el o ene gy mix deca boniza ion. Also, Eu opean coun ies posi ioning wi h e e ence o
2030 a ge s has been discussed p o iding e idence on he di e ence be ween he cu en
le el o enewable ene gy gene a ion agains he 2030 decla ed a ge s. Fu he mo e, he
indings e eal ha speci ic ini ia i es, such as he deca boniza ion o he ene gy mix, a e
pi o al o enhancing deca boniza ion s a egies in s eel companies. The ole o in e nal s a
aining and in ol emen is c ucial in he success ul implemen a ion o hese s a egies. The
indings suppo he idea ha i m commi men , knowledge, and a clea ision om
managemen signi ican ly imp o e he ou comes o deca boniza ion e o s and educe isks.
Finally, he s udy in oduces a comp ehensi e simula ion model ha p o ides manage s wi h
a ool o assess he impac o business commi men on ou comes, unde s and ma ke and
egula o y compliance isks, and benchma k indus y s anda ds. As de ailed in ou indings,
his model illus a es he complex in e play be ween indus y ac ions, go e nmen
egula ions, and inancial mechanisms, emphasizing he impo ance o isk managemen in
deca boniza ion s a egic planning. Fu u e esea ch should b oaden he geog aphical scope
o u he explo e he in e ac ion be ween en i onmen al, economic, and poli ical a iables
in he con ex o deca boniza ion.
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