Why is this important to us?
Energy efficiency is not only an effective first response to reducing carbon emissions: it also reduces costs, not only for us but those who make use of our steel. Continued research into energy efficiency and other low carbon technologies is also vital to enable the changes society is looking for.
The commercial imperative
What kind of challenges do we face?
Energy costs flow straight to our bottom line – our energy bill in North America rose by around $350 million in the first half of 2014, after the worst winter in 50 years forced up the price of gas – and so energy efficiency is a key part of our response. More than most other industries, the steel industry would be significantly affected by an increase in the price of carbon or more stringent emissions trading schemes, but national or regional schemes will only move the problem elsewhere, so we are convinced that a global solution is needed rather than different regional schemes.
What do we need to do?
The rising cost of energy is a business risk which we can and do mitigate, for example, by using and recovering energy more efficiently in our steel and mining operations or by exporting our waste heat for the benefit of others. We also need to continue to research new technology that could make the steelmaking process less energy and carbon-intensive, while doing everything we can to ensure our steel is fully recycled, so that we can maximize the potential to reduce carbon emissions over its full lifecycle. We also continue our work on more sustainable product design and need to do more to measure the value of our steel over its entire lifecycle.
What is the potential to create value?
We’re already saving a lot through our energy efficiency measures at our steel plants, making our business and our customers more resilient to future increases in energy prices. If our research develops further technologies to reduce energy consumption, this resilience will be enhanced. In our products, meanwhile, our specialised lightweight steel is already creating value in the automotive industry by helping vehicles to reduce fuel consumption; and our electrical steels are enabling huge improvements in energy efficiency in the power generation sector and in electric cars.