Sustainability for Steel: Redefining the Perception of an Industry
The week of November 10, 2019 felt like a significant moment in the history of the steel industry: two back-to-back press announcements from leading global steel companies pledging to embrace sustainability, reduce CO2 emissions and waste. For an industry that is such a critical component in the global economy and the largest industrial source of CO2 emissions, this rise in climate change consciousness is significant and a reason to be hopeful about industry’s participation in saving the planet. Can we really have sustainable steel?
Steel’s Watershed Moment
On Nov. 13, 2019, U.S. Steel announced an ambitious new target for reducing greenhouse gas emissions by 20 percent, by 2030 based on 2018 baseline levels. This reduction equals the volume of CO2 generated annually by more than 850,000 average family homes. This announcement came one month after their investment in Big River Steel, the world’s first LEED-certified steel producer.
“Committing to a global greenhouse gas intensity reduction target is central to U.S. Steel’s strategy to become a world-competitive ‘best of both’ integrated and mini mill steel company,” said U. S. Steel President and Chief Executive Officer, David B. Burritt.
The next day, major Swedish steelmaker SSAB made a bold announcement to be the first manufacturer to make fossil-free steel, by 2026. Coincidence or trend? We think it’s indicative of a tipping of the scales towards steel industry leaders reversing the climate impact that has characterized their industry for decades.
SSAB plans by 2022 to have its US operations in Iowa, which use electric arc furnaces (EAF’s) to process scrap metal to make steel, to be completely powered by renewable energy. By adopting these fossil–free methods, SSAB will eventually bring the possibility of a fossil-free value chain to its auto, heavy transport, and construction steel customers.
”We seek to initiate partnerships with our customers around common goals so that they can be the first in the world to include fossil-free steel in their own products,” says Martin Lindqvist, SSAB’s President and CEO.
In May 2019, months after the U.S. Steel and SSAB announcements, the largest steel producer in the world, ArcelorMittal, issued its first ever Climate Action Report, announcing its intention to significantly reduce CO2 emissions and become carbon neutral in Europe by 2050. ArcelorMittal recognizes it has a leading role in developing technologies that will enable a global transition to a low-carbon steel industry.
“We believe it can be possible for the steel industry to deliver carbon emissions reductions targets in line with the Paris Agreement. We are committed to this objective and are actively piloting several low-carbon steelmaking technologies. Central to achieving this aspiration will be supportive policy to ensure a global level playing field, access to sufficient clean energy at competitive prices and access to finance. The energy industry has made great strides in creating a pathway to lower emissions through supportive policy and we are confident the same can be true for steel.” Lakshmi Mittal, Chairman and CEO at ArcelorMittal
The Legacy of Steel and the Environment
Steel production is the largest single industrial source of CO2 emissions and the most traded commodity after oil. Iron and steel production account for 24 percent of the world manufacturing industry’s CO2 emissions.The traditional method for making iron and its tougher alloy steel, is smelting raw materials at extremely high temperatures, which has not fundamentally changed in 150 years. Large blast furnaces rely on coke, a carbon-rich fuel made from coal, to reduce iron ore into liquid metal, which is refined into steel. Significantly reducing the emissions footprint of steel will, in all likelihood, require a fundamental change in the science of steelmaking.
Steel is one of the most recycled materials on the planet; more than paper, plastic, aluminum, and glass combined. Steel manufacturers are increasingly leveraging recycled steel to transition to manufacturing methods with a lower carbon footprint. They continue to add mini-mills across the world (which recycle significantly higher proportions of scrap steel, around 90%, compared to integrated mills, which typically run on less than 40% of recycled scrap steel).
Source: Financial Times: https://www.ft.com/content/3bcbcb60-037f-11e9-99df-6183d3002ee1
The carbon footprint of steel is changing
It’s happening because other stakeholders (i.e. – associations and technology providers) like Noodle.ai are committed to positively impacting the planet. Noodle.ai is providing artificial intelligence solutions to the steel industry, deploying applications that help steel producers predict and shape energy usage, reduce raw material consumption, reduce scrapped material, eliminate unnecessary shipping and underutilized capacity – all of which have measurable positive impact on carbon emissions.
Groups like the World Steel Association are also committed to orchestrating positive environmental impact from the steel industry if governments, manufacturers and stakeholders join forces.
Leaders at the World Bank and International Monetary Fund have pushed governments to increase prices on carbon to force polluters to pay for the CO2 they emit. For example, the EU’s carbon price more than tripled since 2018 and is expected to rise in the future. ArcelorMittal cited higher carbon prices in its decision to slash production in May.
And now on to the next chapter, where a coalition of committed entities focus on Co2 emissions reductions, transforming the fundamentals of steel production.2019 was a year that saw lots of progress. Hopefully the decade of the 2020’s will see many more commitments made and milestones achieved.
This post uses data from our latest ebook, “World without Waste.”
image credit: Bernard Hermant
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