We also support global initiatives to reduce emissions through carbon reduction targets, and emissions trading schemes, so long as they are fairly applied across different sectors and regions and guarantee a global level playing field.
Our approach to date
Our existing target is to cut the carbon intensity of our steel by eight per cent by 2020 against a 2007 baseline, to be pursued by identifying opportunities to save energy across our portfolio, making more use of recovered steel scrap in our furnaces, and investing in research into new technologies that could substantially reduce the carbon intensity of steelmaking in the long term.
Although our work on energy efficiency is delivering substantial cost savings to the business, what it may not do is translate directly into carbon reductions, or improvements in our CO2e intensity figure. The reasons are complex. Whilst energy efficiency is a prime factor, the quality of the raw materials we use, and the way our production is distributed between different sites, can both have a profound impact on our carbon results and, in the worst case, completely mask any actual improvements made. For example, better energy performance at one plant can be outweighed by an input of low grade scrap or iron ore elsewhere.
While our progress may be slower than we originally anticipated, and we have not yet been able to secure any major new technologies to reduce the carbon intensity of the steelmaking process, we are continuing to invest in this, and we are committed to reducing the overall carbon emissions from our steel plants.
We calculate and report the greenhouse gas emissions from our steel plants using the guidelines of the Worldsteel Association, which are based on the Greenhouse Gas Protocol. The only material greenhouse gas emitted by these operations is carbon dioxide. Our reporting on the carbon intensity of our steel has been externally assured for the past seven years. We have participated in the Carbon Disclosure Project since 2005.
Methane gas is released as a by-product from mining, and to ensure that the mine’s working environment is safe it has to be extracted – usually to the atmosphere. This generates significant greenhouse gas emissions, because methane is a far more potent greenhouse gas than carbon dioxide.We started reporting methane emissions from our mining business as part of our greenhouse gas footprint in 2013. Reducing methane emissions from coal mines is a challenge, and until very recently no one had found viable ways to re-use it. In 2013, we started to capture methane gases at our Lenina coal mine in Kazakhstan and use it to produce electricity. This generates power for the mine, saves money and avoids the release of these greenhouse gases.
Carbon trading and the EU ETS
Our business works within a number of national, regional and international frameworks which aim to drive down carbon emissions by making them gradually more expensive. We play an active role in public and industry forums to ensure that steel’s contribution to a lower carbon world is recognised by policymakers and other stakeholders. Our requirements are twofold: firstly to ensure that carbon targets and processes are consistent across all regions, creating a level playing field for all steelmakers; and secondly to ensure that targets are set at levels that are technically and economically feasible. The most established of these frameworks is the European Emissions Trading System (EU ETS), and at present, we are working to ensure that European carbon targets do not render European steel uncompetitive, which would merely cause our markets to import cheaper steel and steel products from elsewhere. This would have no benefit to the global climate and at the same time it could cost the livelihoods of many thousands of people.