Steel

Biden Climate Summit Requires Bold Industrial Decarbonization Plan

By Phelim Kine and Megan Larkin

U.S. President Joseph R. Biden’s virtual Earth Day Summit will commence on April 22 on a hopeful note. The European Union on April 21 struck a tentative climate accord designed to ensure that the 27-nation grouping reaches carbon neutrality by 2050. And Biden’s climate czar, John Kerry, and his Chinese counterpart, Xie Zenhua, pledged on April 18 to take joint "concrete actions in the 2020s to reduce emissions aimed at keeping the Paris Agreement-aligned temperature limit within reach."

That’s the good news.

The challenge: Reaching consensus on key government priorities essential to reduce carbon emissions that are fueling the already evident negative impacts of climate change. There’s a ready short list – stopping tropical deforestation and accelerating a global transition to renewable energy. But the summit’s true success hinges on states’ concrete commitments to decarbonization of the heavy industry sector which constitutes around 18 percent of all global carbon emissions. The World Steel Institute estimates the steel sector is responsible for approximately eight percent of total global carbon emissions. The United Nations’ Intergovernmental Panel on Climate Change (IPCC) has estimated that dramatic cuts in those emissions are essential to limit global warming to 1.5°C by 2050. The IPCC warns that failure to meet that target will greatly increase “climate-related risks to health, livelihoods, food security, water supply, human security, and economic growth.”

A growing number of the world’s largest steel companies have proactively announced that they’ll reduce their carbon emissions over the next three decades. ArcelorMittal committed on March 17 to the development and rollout of two low-carbon steel product lines including a “certified green steel” line and a low-carbon recycled steel line, respectively. Japan’s Nippon Steel has set a target of reducing its carbon emissions by 30 percent by 2030, prompting similar pledges from rivals including South Korean steelmaker POSCO and China’s state-owned Baowu Steel. And some of the world’s largest automakers are demanding that their steel suppliers provide them “green steel” car parts for their rapidly expanding lines of carbon neutral electrical vehicles.

Those corporate commitments are laudable. But decarbonizing the world’s heavy industry sector, starting with steel, is a nonstarter unless governments back up the private sector’s best intentions toward decarbonization with funding and supportive policy and regulatory initiatives. Pilot carbon reduction projects by ArcelorMittal, Tata Steel and Swedish steelmaker SSAB have hinged on millions of Euros in government support. That funding is a fraction of what is required to transition the entire global steel sector to carbon neutral status by 2050. POSCO has underscored the financial challenge of that transition when it revealed that replacement of its nine existing high carbon emission blast furnaces with carbon-neutral facilities will cost the “equivalent to its 30-year operating profit.”

Mighty Earth and The Climate Group have collaborated to create a new international multistakeholder policy tool that provides a common playbook outlining the respective responsibilities of governments and the private sector dedicated to accelerate and scale-up the decarbonization of heavy industry, starting with steel,  to align with a 1.5°C global warming trajectory. The Global Framework Principles for Decarbonizing Heavy Industry (“Framework Principles”) launched in February after a drafting process that involved close coordination with industry and policy experts across the globe. These principles constitute the first-ever publicly available global guidance for how to equitably balance economic growth with decarbonization.

The Framework Principles outline the respective roles of governments and private industry to ensure the successful decarbonization of heavy industries – including steel, cement and chemicals – through allocation of public financing for emissions reduction plans. The Framework Principles specify investment in low- and zero-carbon technologies as a top government and corporate priority to help phase out fossil fuel use in industrial processes. The United Kingdom has offered a potential model for meeting this challenge through government-corporate decarbonization partnerships by earmarking an initial US$1.4 billion over 15 years to fund such initiatives. The Framework Principles are grounded in a recognition that decarbonization efforts include biodiversity and human health protections and a commitment to a just transition to a decarbonized industrial future. The growing number of corporate endorsers include Tata Steel Ltd. and JSW cement of India, China’s Jinko Solar and the U.S.-based carbon recycling firm, LanzaTech.

Governments can also play an important role by helping to foster the development of an accepted, universal standard for low-carbon or carbon-zero “green steel.”  Such standards are needed to ensure that corporate carbon neutrality commitments bridge the gap between rhetoric and reality. The ResponsibleSteel coalition, which groups a diverse array of high carbon emission corporations with nongovernmental organizations including Mighty Earth, has developed standards that extend beyond greenhouse gas emission metrics to include “a wide range of social, safety and environmental issues.”

Biden’s challenge as host of the two-day summit is to align the climate pledges of state leaders of countries home to heavily polluting heavy industry sectors, including China, Japan and India, with concrete policy initiatives that will allocate state funding to accelerate industrial decarbonization.  Biden himself has pledged to put “sectoral decarbonization” at the center of his administration’s “green recovery efforts,” but failed to make it a priority of his massive infrastructure spending plans.

Biden’s not alone in that gap between rhetoric and reality. Chinese President Xi Jinping committed in September 2020 to reduce China’s carbon emissions in order to reach carbon neutral status by 2060. But despite China’s status as the world’s largest steel producer, Xi has yet to allocate the trillions of dollars at his disposal via state-owned commercial banks to put wheels on that pledge. Likewise, Japan’s Prime Minister Yoshihide Suga has publicly committed to transition Japan to a decarbonized, zero-emission industrial production model by 2050. But Suga’s failure to date to provide a substantive road map to that target has prompted skepticism in Japan’s business community.  A survey of more than 11,000 large and small Japanese firms about Suga’s carbon neutrality target revealed that only 15.8% of surveyed companies considered it “achievable.”

Most concerning is the disconnect about the essential role of state financing for industrial decarbonization in the Indian government of Prime Minister Nahrendra Modi. RK Singh, India’s Minister of Power, last month derided other countries’ carbon net zero goals as “pie in the sky.” Singh then declared that the onus for decarbonization sat squarely on developed countries by “removing more carbon to the atmosphere than they are adding.” India’s status as the world’s third-largest carbon emitter behind China and the United States makes Singh’s dismissal of his country’s industrial decarbonization obligations particularly incongruous.

There is a growing global consensus that heavy industry decarbonization is essential to avert emission-fueled climate disaster. Biden’s climate summit will demonstrate whether that consensus can produce the necessary vision and political will to make heavy industry decarbonization a reality. 

Phelim Kine is the senior director Asia at the Washington, D.C.-based environmental campaign organization Mighty Earth; Megan Larkin is an Associate at Mighty Earth where she works on its heavy industry decarbonization campaign and business development

by Mighty Earth

Automakers Must Drive Global Push for "Green Steel"

By Megan Larkin 

Sweden’s Volvo Cars has seen the future of the automobile: it’s built with carbon neutral “green steel.”

That’s the message that Volvo sent last week when it announced a collaboration with Swedish steel producer SSAB to produce “the world’s first vehicles to be made of fossil-free steel.”  Volvo and SSAB are pioneering a carbon neutral steel production process that this year will produce the first “green steel” concept cars ahead of serial production “within a few years.”

Volvo isn’t alone in that vision of a near-future carbon neutral automobile steel supply chain. Scania, a Swedish truck manufacturer, is investing in H2 Steel, a hydrogen start-up, to jumpstart access to green steel in response to consumer demand. And Boston Metal, an electrolysis-based steel technology start-up has already received seed funding from BMW in a similar venture. BMW has described that investment as part of the German automaker’s aim to disrupt an “extremely pollutive industry.”

These initiatives are essential in order for automakers to meet the growing consumer demands for environmentally friendly automobiles that are driving the rapid expansion of electric vehicle development and production. But automakers increasingly recognize that reducing the carbon footprint of their products must go beyond electrification and address the use of steel in their products.

The average vehicle requires an average of around 2,000 pounds of steel, making the automobile sector a significant consumer of a material that contributes an estimated 8 percent of total annual global carbon emissions. Given its role in global carbon emissions, decarbonizing the steel industry will be integral to limit global warming to 1.5 degrees Celsius by 2050. The United Nations’ Intergovernmental Panel on Climate Change (IPCC) has warned that failure to meet this target will greatly increase “climate-related risks to health, livelihoods, food security, water supply, human security, and economic growth.”

Some of the world’s largest steel makers have already publicly announced that they will transition their production processes to carbon neutral status by 2050. Those companies include ArcelorMittal, Japan’s Nippon Steel, China’s Baowu Steel and POSCO in South Korea.  Those firms deserve credit for setting out such ambitious goals. But what they lack are clear timetable and science-based targets to allow those companies to achieve those objectives. And one of the biggest challenges for steel companies in unveiling the details of those carbon neutrality goals is cost.  Some estimates place the total cost for heavy industrial decarbonization at $11 trillion-$21 trillion through 2050. What steelmakers need, and soon, are assurances from their buyers there is a lucrative, growing market for low carbon or carbon free products that will justify the costly transition to zero emission production systems.

This is where automakers come in. Any demand that automakers make for green steel will communicate to steelmakers the longer-term financial incentives for investing in carbon neutral steel production technologies. Automakers’ massive purchasing power provided by the huge volumes of steel they buy gives them significant influence in the type of steel their suppliers produce. That means that automakers have untapped leverage that they can use to pressure steel makers to transition their current highly carbon intensive production methods to lower carbon or carbon neutral systems.

Automakers seeking to navigate their route to a carbon neutral supply chain now have the resources to coordinate with government: an international, multistakeholder policy tool dedicated to accelerating and scaling-up the decarbonization of heavy industry to align with a 1.5-degree Celsius trajectory. The Global Framework Principles for Decarbonizing Heavy Industry (“Framework Principles”), developed in partnership with The Climate Group, outline the role of government and private industry to ensure the successful decarbonization of heavy industries including steel, cement and chemicals through allocation of public financing for emissions reduction plans. The Framework Principles specify investment in low- and zero-carbon technologies as a top government and corporate priority to help phase out fossil fuel use in industrial processes.

Importantly, the Framework Principles go beyond the obvious targets – heavy industrial producers and manufacturers – and recognize the importance of end users, such as the automotive industry. Principle #3 calls for policies to create buyer demand for “low-carbon, circular, and resource efficient basic material products.” These policies would likely give muscle and leveraging power to end-user demands for green steel.

The automotive industry is waking up to growing consumer demand for environmentally friendly, carbon neutral products, particularly cars. What is needed is a sense of urgency to make the necessary changes to steel production processes in order to limit global warming to 1.5 degrees Celsius by 2050. Martin Lindqvist, President and CEO at SSAB, says there is “a new green revolution emerging.” The appetite for green steel technology is there. With stronger partnerships between automakers and green steel technology in reach, he may just be right.

Megan Larkin is an Associate at the Washington, D.C.-based environmental campaign organization Mighty Earth where she works on its heavy industry decarbonization campaign and business development.

by Mighty Earth

ArcelorMittal Decarbonization Move Highlights Urgency of Steel Emission Reductions

Government funding essential to support corporate carbon reduction moves

The global steel production sector made an important symbolic move toward tackling its massive carbon emission problem with ArcelorMittal’s unveiling of a new decarbonization initiative, Mighty Earth said today. ArcelorMittal, one of the world’s largest steel producers, committed on March 17 to the development and rollout of two branded low-carbon steel product lines including a “certified green steel” line and a low-carbon recycled steel line, respectively. The World Steel Institute estimates that the steel sector is responsible for approximately eight percent of total global carbon dioxide emissions.

“ArcelorMittal’s low-carbon steel initiative marks a small step toward a wider steel-sector recognition of the urgency of transitioning production systems toward carbon neutral emission systems,” said Phelim Kine, senior director Asia at Mighty Earth. “ArcelorMittal has sent a clear signal that steel production’s current high carbon emission status quo is both environmentally and economically unsustainable, but more dramatic carbon reductions by the steel sector are necessary to align with a 1.5°C global warming trajectory.”

This initiative will render only modest reductions in ArcelorMittal’s carbon emissions. The company’s new low-carbon product lines will constitute only a maximum of two percent of ArcelorMittal’s total annual steel production by end-2022. ArcelorMittal plans to expand that production to a target of ten percent of its total steel products by 2025-2030. That’s a fraction of the industrial carbon emission reductions that the United Nations’ Intergovernmental Panel on Climate Change (IPCC) has estimated as essential to limit global warning to 1.5°C  by 2050. The IPCC warns that failure to meet that target will greatly increase “climate-related risks to health, livelihoods, food security, water supply, human security, and economic growth.” Company officials explicitly linked the development of the product lines to government, societal and customer demands for low carbon emission steel.

ArcelorMittal also announced the creation of a new “Innovation Fund” aimed to seed the development of new technology and companies dedicated to reducing heavy industry carbon emissions.  The company’s Chief Executive Officer, Aditya Mittal, emphasized the fund’s annual US$100 million budget was only a fraction of what was needed to transform the steel sector to a low-carbon future and declared “We need partners” to accelerate such efforts. That admission is an implicit recognition of the need for deep investment by both governments and the private sector to effect the needed production chain overhauls across the heavy industry sector in order to align it with a 1.5°C global warming trajectory.

ArcelorMittal’s initiative dovetails with the objectives of a new international multistakeholder policy tool pioneered by Mighty Earth and The Climate Group dedicated to accelerate and scale-up the decarbonization of heavy industry to align with a 1.5°C global warming trajectory. That tool, the Global Framework Principles for Decarbonizing Heavy Industry (“Framework Principles”), launched last month after a drafting process that involved close coordination with industry and policy experts across the globe. Those principles constitute the first-ever publicly available global guidance for how to equitably balance economic growth with decarbonization.

The Framework Principles outline the role of governments and private industry to ensure the successful decarbonization of heavy industries including steel, cement and chemicals through allocation of public financing for emissions reduction plans. The Framework Principles also specify investment in low- and zero-carbon technologies as a top government and corporate priority to help phase out fossil fuel use in industrial processes. The growing number of heavy industry corporate endorsers including Tata Steel Ltd.  and JSW Cement reflect how corporations are seizing the initiative on industrial decarbonization.

“ArcelorMittal’s initiative should place urgent decarbonization at the top of the heavy industry sector’s priorities and catalyze private sector and government action to provide the necessary funding as well as the policy and regulatory environment necessary to fast-track that process,” Kine said. “Avoiding the climate repercussions of unmitigated industrial high carbon emissions requires serious, timely and collaborative corporate and policy sector measures to keep our planet from heating beyond 1.5C.”

by Mighty Earth

IEA Fails to Deliver a 1.5-degree Climate Scenario for Steel Industry

Today, the International Energy Agency (IEA) released its long-delayed Iron and Steel Technology Roadmap. While the report includes some encouraging insights and analysis about how to decarbonize the iron and steel industry, which accounts for 8 percent of all final global energy use and 7 percent of all global CO2 emissions, the report fails to deliver on the growing calls for more ambitious models built around a 1.5-degree climate scenario.

Mighty Earth campaign director Margaret Hansbrough had the following response to the report and launch webinar: 

"The IEA has squandered its unique opportunity to set the stage for the decarbonization of steel, offering instead an unambitious plan that fails to ensure a livable Earth in 2050 and beyond. In its new report, the agency’s Sustainable Development Scenario (SDS) aims for a 1.8-degree scenario that is more likely to be 2 degrees. It projects a reduction of only 2 gigatons between now and 2030 – essentially a business-as-usual scenario – even as it states there will need to be a reduction of 22 gigatons for their 2050 SDS.

"This lack of ambition is incredibly disappointing because the private sector is showing signs of progress. In recent weeks, LaFarge, world’s largest cement company, issued a new science-based target (SBT) commitment. Arup, major construction company, announced plans for net-zero emissions by 2030. And the world’s largest steel company, ArcelorMittal just pledged to achieve carbon neutrality company-wide by 2050. As the difficult work of decarbonizing heavy industry moves forward, the IEA needs to lay out a vision sufficient to the scope of the challenge.

"Overall, the report fails to deliver in the most critical ways. The IEA would do the world a great service by elevating its Faster Innovation Case -- a more aggressive scenario which it references in this report and articulates more fully in the September 2020 Energy Technology Perspectives report. We are calling upon the IEA, its member nations and associated nations, and policymakers and corporate leaders in those countries to put forth a 1.5-degree scenario for steel and all of heavy industry in the next few months. Our leaders must address the gap between their current scenarios and what is needed for a livable world and seize the opportunity to make industrial decarbonization an urgent part of a global green economic recovery."

Analysis

A few encouraging points in the report include:

• Early retirement of assets, technology sunsets, and strong international cooperation around research, development, and deployment of breakthrough and clean technologies to displace and mitigate coal use are all mentioned in the report. These are all top priority tools to reduce emissions.
• The report calls for a global policy framework for countries and companies to come to a consensus through formal diplomatic climate and trade policy mechanisms
• The report acknowledges that in the time between now and when some of the biggest pollution reduction strategies will pay off at great scale, the steel industry should invest in Nature Based Solutions such as forest conservation and restoration to complement industry decarbonization and achieve carbon neutrality now. This recommendation aligns with Mighty Earth’s call to action for the global steel industry to commit to achieving carbon neutrality now and net zero by 2050.

The most discouraging points in the report include:

• Despite IEA’s enthusiasm of late for clean hydrogen technology, it forecasts that by 2050 only 8 percent of steel will be produced using clean hydrogen.
• Almost nothing is mentioned about the current need to address overcapacity, mostly driven by China’s aggressive, high-carbon plans for a post-COVID recovery. This silence is in strong contrast to the OECD Steel Committee, which raised overcapacity as a major concern last week.
• Overall, the report shows deeply path dependent and siloed thinking from the IEA. They fail to recognize that the very countries and regions where they project dramatic increases in steel demand are the same places that will be most severely affected by the dangerous effects of climate change, including rising seas, catastrophic temperature rise, and drought.

Photo: Tata Steel Logistics & Shipping Bv, Rooswijkweg, IJmuiden, Nederland; by Floris Andréa on Unsplash

by Mighty Earth

Architects, Engineers, Builders, and Activists Declare 2030 Must Become the New 2050 in the Climate Emergency

Steel and concrete industries targeted by their top customers in design and construction for dramatic GHG emissions reductions in next ten years.

LOS ANGELES, CALIFORNIA -- This week, the top 20 percent of the global design industry – representing approximately 500 organizations – gathered at the Carbon Positive 20 Conference in Los Angeles. Their challenge was to form corporate commitments and design pathways for reducing the “embodied” or upfront emissions from building materials like steel and concrete. Steel and concrete represent approximately 15 percent of all global emissions and are the most ubiquitous building materials in the world, with construction accounting for about half of all steel demand and all of concrete demand.

Attending the conference were not just top design leaders but also representatives from top construction, steel, and concrete companies (Skanska, Turner Construction, CEMEX) who were listening closely to what their customers were demanding of them: low and zero carbon construction materials. These commodities are needed right now to address the climate emergency, and industry’s demand for these products will grow exponentially in the next few years.

During her panel presentation titled “Better Steel, Better Concrete,” Mighty Earth Campaign Director Margaret Hansbrough was joined by global concrete expert Bruce King and leading embodied carbon pioneer and Dirk Kestner. In her presentation, she challenged the steel industry and its largest customers in the global design and construction industries to set emissions reductions targets aligned with the 65 percent by 2030 target Architecture 2030 has stated is essential if the world is going to stay within the 1.5 degree planetary warming threshold. But she also challenged these heavy polluting industries like steel, concrete, and construction to shift their entire business strategy, saying “This is not just about reducing the carbon from any single project, but about planning for how you as a company will decarbonize your entire business strategy starting today.”

Hansbrough and many other speakers also called for both product level and production facility level Environmental Product Disclosures (EPDs) to be issued by major steel and concrete companies this year in order for design professionals to have the carbon transparency they need to dramatically reduce embodied carbon for all new projects.

Highlights of the historic event included:

• Architecture 2030’s CEO Ed Mazria challenged companies to commit to net zero emissions by 2040 for all materials in the built environment, including an immediate 50 percent reduction in embodied carbon and 65 percent reduction by 2030 for all construction materials
• Mazria went even further, asking leading companies to commit to what he describes as the “High Ambition” targets of 100 percent net zero carbon from building materials by 2030 – and to make that commitment public this year. These targets are calculated to ensure a 67 percent likelihood that the planet can stay within 1.5 degree Celsius planetary warming threshold
• Mazria also underscored the urgent time value of carbon with a data visualization illustrating how, in the next 10 years, 72 percent of the carbon that the built environment will emit will be from embodied, not operational, carbon.
• Also announced during the conference was the formation of SE 2050, an alliance of structural engineers working together to align around the Architecture 2030 net zero emissions framework for both embodied and operational carbon.
• The American Institute for Architects (AIA) and the leadership of the Large Firm Round Table rolled out a comprehensive framework called Countdown On Carbon for embodied carbon commitments and actions that they will be asking all AIA members to sign on to this year, the most aggressive and comprehensive demand signal to date for low carbon steel and concrete.
• The event ended with an invigorating and motivating speech from Farhana Yamin, a longtime influential climate lawyer and prominent Extinction Rebellion activist who challenged the crowd to “make 2030 the new 2050” and dramatically raise their ambition and action for what was achievable. She challenged the audience to declare a climate emergency, just as architects in the UK have already done, in order to mobilize the collective action needed to dramatically reduce emissions from their industries and from the materials they use.

The Carbon Positive 20 Conference was organized by Architecture 2030 and Architect Magazine and was the largest industry event to date focused entirely on embodied carbon from construction materials like steel and concrete.

For the last 18 months, Mighty Earth has been campaigning and activating the global steel and construction industries to take bold climate action, demanding that the steel industry set a new standard for low and zero carbon steelmaking and commit to carbon neutrality. For more campaign statements and reports, visit www.mightyearth.org/steel

by Mighty Earth

Breakthrough Embodied Carbon Tool for Construction Only A First Step Toward Market Transformation

Statement from Mighty Earth Campaign Director Margaret Hansbrough in response to the public launch of the free Embodied Carbon in Construction Calculator (EC3) at the USGBC Greenbuild Conference in Atlanta this week:

“A huge congratulations are in order for everyone at the Carbon Leadership Forum who has worked diligently over the last year to make this tool ready for primetime and—importantly—free and accessible. It’s a testament to their commitment to the issue of embodied carbon and to how well they have channeled their collective expertise to make an impact. Skanska USA and Microsoft deserve special credit for being the pioneers in using this tool and working hard to perfect it.

“The ability for design and construction professionals to leverage Environmental Product Declarations (EPDs) so they can analyze which products have the lowest embodied carbon and use them in their projects is something we called for in our Construction Destruction report, released at Greenbuild last year in Chicago. This ability is an important and necessary early step, but we also called for the construction industry to begin making companywide asks of their steel and other materials suppliers to do away with industry average EPDs and adopt product- and site-specific ones. Most importantly, we called upon Skanska, Clark Construction, AECOM, Turner Construction, Lendlease, and all the other top builders to explicitly demand public plans for decarbonization from the steel companies they buy from.

“It’s not enough to buy good products, you have to be able to buy good products from a good company. Otherwise, there will not be enough incentive for steel producers to build the critical mass they need for industry wide decarbonization, and bad actors will continue to escape accountability without fear of losing business.

“In October, the top design firms all gathered in Chicago at the behest of Architecture 2030 and set a goal of 65 percent reduction in embodied carbon from construction of buildings and infrastructure by 2030. This goal was set to align with a 1.5-degree scenario and is incredibly ambitious and necessary since construction uses most of the world’s steel, concrete, and aluminum. Those materials alone account for 22 percent of global emissions. We are going to need all kinds of technical solutions like EC3 to tackle this enormous challenge, but more than anything we are going to need driven, creative, and courageous professionals in the design and construction world to act each day with greater urgency—and demand more than they have before from themselves and each other.”

by Mighty Earth