An international group of leading steel manufacturers today announced the formation of a coalition to urge the United States and European Union to adopt a global emission standard that incentivizes steelmakers to use the cleanest steel production process available.
The new coalition – the Global Steel Climate Council (GSCC) – supports a global standard that accelerates the transition to low-emission steel and recognizes the potential of the recycled, circular steel model to reduce carbon emissions.
The United States and European Union are negotiating a new emissions standard for steel production. The GSCC asserts that any agreement should focus on the amount of emissions generated, not on how steel is made. The majority of the world's steel production is extremely carbon-intensive because it primarily relies on mined and processed coal, iron ore and limestone. However, other steelmakers – including those producing over 70% of all U.S. and over 40% of all European manufactured steel today – use electric arc furnaces (EAFs) that principally input recycled scrap metal to produce steel, generating significantly lower carbon emissions.
"We have the technology to reduce carbon emissions in steel production by 70 percent today," said Leon Topalian, Chair, President & CEO of Nucor Corporation, a founding member of the Council. "The global industry needs to build on the innovation that has already led to cleaner steel production in the United States because the green and digital economies around the world are going to be built with steel, and the steel they are built with matters."
A "sliding scale" standard supported by high-emission steelmakers would set greenhouse gas emission standards ceilings up to nine times higher for extractive versus recycled products, penalizing EAF producers and permitting higher-emission steel to be erroneously labeled as "green." Under a sliding scale, two steel products could be classified as equally "green," even though one was produced by creating multiple times more carbon emissions than the other.
"Steel is essential for our economies, including the world's essential infrastructure. This new standard will accelerate the actual reduction of greenhouse gas emissions and provide key decisionmakers with accurate data to make informed decisions," said Mark D. Millett, Chairman, President, and CEO of Steel Dynamics, Chairman of the Steel Manufacturers Association, and a founding member of the Council.
"We must prevent steel producers from classifying their products as green when the same products are available on the market with significantly lower carbon emissions," said Francisco Cardona, Head of Public Affairs of CELSA Group, a leading European producer of low-emission circular steel and founding member of the Council.
The primary focus of the GSCC is to establish a standard, focusing on the following guiding principles:
- Reducing GHG emissions from the global steel industry.
- Establishing a standard that is technology/production method agnostic.
- Establishing a standard that has a system boundary that includes Scope 1, 2 and 3 emissions.
- Establishing a standard that aligns with a science-based glide path to achieve a 1.5 degree scenario by the year 2050.
- Providing relevant information on sustainable steelmaking to appropriate decisionmakers.
"The GSCC single standard will encourage all producers to reduce their carbon emissions and create a level playing field for all manufacturers. The U.S.-EU negotiations should not create a double standard and a slippery slope toward a dirtier environment. We can do better," said Philip K. Bell, President of the Steel Manufacturers Association and founding member of the Council.