ArcelorMittal

Steel production generates significant CO2 emissions. Despite efforts to reduce these emissions to help combat climate change, ArcelorMittal, the world’s leading steelmaker, is constrained by available technologies. Research and development efforts are underway to develop new, low-carbon production routes, but producing steel from iron ore will, for now, remain highly energy-intensive. Regulations aimed to reduce emissions need to take this into account and should help preserve an even playing field for the global steel industry. On the other hand, many of ArcelorMittal’s products and services are part of the solution as they contribute significantly to energy efficiencies among its customers. ArcelorMittal’s proactive and multi-faceted approach to addressing the climate change challenge recognises short, medium and long-term goals and encompasses technological support, use of market mechanisms, supporting and informing regulatory dialogue and promoting innovation.

Recycling and value-added products

Steel production carries a high carbon cost, but it can also be a part of the climate change solution. Foremost, the intrinsic feature of steel – its recyclability – means environmental benefits over its entire life-cycle. In some sectors, such as the automotive industry, 95% of steel used is recycled. Globally, recycled steel brings about 600 million tonnes of CO2 savings annually. ArcelorMittal is the biggest recycler of scrap steel in the world.

Steel is an essential component in the development of renewable energy equipment, most obviously through the production of components to wind generators, but also solar power structures (for example solar panels integrated within steel roofing), wave or tidal energy installations or rails production. Lighter and stronger steel helps reduce the weight of car chassis and strengthen new buildings through a smaller carbon footprint.

Cutting emissions

Over the last 30 years, technical developments introduced within the industry have reduced relative CO2 emissions in western Europe by nearly 50%. These process achievements, particularly in the blast furnace process, are now close to their technical limits. We are sharing best practices between our steelmaking units, with a view to bringing our least efficient sites, located mostly outside Europe and the Americas, to the same standard as our best-performing units. The next step will be to model emissions scenarios and establish realistic, but challenging, targets.

ArcelorMittal also looks at ways to manage energy more efficiently. For example, gases that are produced as part of the production process can be used for electricity production, which reduces the overall need for power generation. We also seek to expand smart uses of our by-and waste products as a way to preserve natural resources and avoid CO2 emissions. For instance, slag, a material collected from our blast furnaces, is being reused most notably in the building and construction industry.

At ArcelorMittal, we currently use two production routes that have a significantly lower CO2 footprint than conventional processes. Direct Reduction of Iron Ore (DRI) is based on natural gas. We are the biggest DRI producer in the world. Another method is based on biomass, which uses charcoal for the production of pig iron from eucalyptus forests in Brazil. However, both processes have limitations, being dependent on the availability of cheap natural gas and on climatic conditions for growing eucalyptus forests outside of Brazil.

Policy framework

The global challenge of climate change has to be addressed through global policy frameworks. The competitive trade of steel, which is freely traded on the world market, should not be distorted through climate change policies. The industry which is prevalent both in developed and emerging countries, needs to be governed by approaches that recognise historical achievement as well as offering incentives for further energy efficiencies and process innovation. We have advocated for the adoption of a sector approach and are working with the International Iron & Steel Institute (IISI) and the World Business Council for Sustainable Development in taking this forward.

In the long-term, 2015 and beyond, we will continue to be one of the leading companies in the EU-sponsored ‘Ultra Low CO2 Steelmaking’ (ULCOS) project. The objective of this initiative is to develop breakthrough technology to reduce CO2 emissions in the steel industry by more than 50%. The project is now in its second phase, during which four ‘routes’ are to be evaluated on an industrial scale. Upon completion, a pilot phase will confirm the technical and economic viability of the project. Almost all technologies will require carbon capture and storage (CCS) solutions, which are already being developed within ArcelorMittal.

Use of market mechanisms

We believe that market mechanisms, if designed properly, can help reduce the costs of compliance with climate change regulation, introduce incentives for new technologies, and offer a means of collaboration between industrialised and developing countries. Assuming a growth in the carbon trade, we have begun to invest in opportunities that deliver long-term value to ArcelorMittal and help tackle global warming. Either directly or through funds, we will purchase carbon credits for compliance or invest in projects that generate compliance grade carbon credits.

W: www.arcelormittal.com