As various regions around the world implement carbon taxes, we assert that the competitiveness of steel products in the marketplace will shift according to individual manufacturers’ ability to reduce CO2 emissions as measured by cradle-to-gate Life Cycle Analysis (LCA). This study was performed by using LCA and cost estimate research to compare the CO2 emissions and the additional cost applied to the production of various decarbonized materials used in sheet for automotive industry applications using the bending stiffness-based weight reduction factor. The pre-pandemic year 2019 was used as a baseline for cost estimates. This paper discusses the future cost scenarios based on carbon taxes and hydrogen cost. The pathways to decarbonize steel and alternative materials such as aluminum and reinforced polymer composites were evaluated. Normalized global warming potential (nGWP) estimates were calculated assuming inputs from the current USA electricity grid, and a hypothetical renewables-based grid. For a current electricity grid mix in the US (with 61% fossil fuels, 19% nuclear, 20% renewables), the lowest nGWP was found to be secondary aluminum and 100% recycled scrap melting of steel. This is followed by the natural gas Direct Reduced Iron–Electric Arc Furnace (DRI-EAF) route with carbon capture and the Blast Furnace-Basic Oxygen Furnace (BF-BOF) route with carbon capture. From the cost point of view, the current cheapest decarbonized production route is natural gas DRI-EAF with Carbon Capture and Storage (CCS). For a renewable electricity grid (50% solar photovoltaic and 50% wind), the lowest GWP was found to be 100% recycled scrap melting of steel and secondary aluminum. This is followed by the hydrogen-based DRI-EAF route and natural gas DRI-EAF with carbon capture. The results indicate that, when applying technologies available today, decarbonized steel will remain competitive, at least in the context of automotive sheet selection compared to aluminum and composites.