4. Efficient use of resources and high recycling rates

In response to the squeeze on resources, the world is moving from a ‘take-make-dispose’ model of consumption to a more circular approach, in which as little as possible is wasted, and as much as possible reused. Steel’s recyclability gives it an inherent advantage here, but there are commercial and technical challenges to overcome if we are to lead in this field.

Why is this important to us?

Every aspect of the way resources are used is now under question – from manufacture, to product design, to how goods and services are ‘owned’. Global commentators are predicting a shift towards a new type of economy in which everything is recycled or re-used and nothing, be it raw materials or energy resources, is wasted.

The commercial imperative

What kind of challenges do we face?

Steel products can be infinitely recycled and productively re-used, which makes them ideal components of a circular economy. At the same time, global supplies of scrap are limited, so we must ensure that all steel products are made in ways that maximise their sustainability benefits over their entire lifecycle. However, steel’s lifecycle benefits are not always understood and so competition mounts from materials such as aluminium, concrete and carbon fibre, which cannot be recycled as easily or extensively. There may also be challenges and opportunities for us springing from the new business models that are emerging as part of the circular economy. This is a complex issue, and such challenges and their solutions may have profound implications for us and our stakeholders.

What do we need to do?

We need to further innovate our production processes for efficient resource use; to work more with stakeholders to drive up recycling rates around the world until no steel ever goes to landfill; and to ensure that steel’s infinite recyclability is appreciated whenever the sustainability of different materials is assessed – over their entire lifecycle. We need to determine where steel is better placed than other materials to deliver what a circular economy demands. To stay ahead of the curve, we need to work with customers and clients to anticipate the shift towards circular economy thinking. Together, we need to innovate, for example, construction products that facilitate recycling, durable products for lease rather than sale, and business models that make it easier to recover and re-use materials than to use and discard them.

What is the potential to create value?

We have the skills to lead the creation of a whole new generation of resource-efficient, re-usable steel products for a circular economy. We intend to be at the forefront of this transition, building on our proven forward-thinking capabilities in innovation and R&D. By creating this long-term competitive advantage for our business and our investors, we can also deliver a wider good for our stakeholders. This must be coupled with our work towards our other outcomes, if we are to realise the full contribution we can make to sustainable development.

Our stakeholders’ expectations

From resource efficiency …

The regulatory framework across the world is becoming more and more demanding. Many countries already impose targets and penalties on landfill use, to help improve resource efficiency and cut waste. Governments and consumers also expect businesses to be more accountable for their products after they sell them – to accept ‘stewardship’ for their sustainability impacts, both in their transportation, use, and end-of-life phases. Sectors like construction still generate large amounts of waste, and our customers in that industry are looking at what this means for them. We believe steel provides an obvious way forward.

… to circular thinking

More and more global commentators agree that recycling alone is no longer enough, and a circular economy is what the world now needs. Even if recycling rates were to reach 100%, the world would still need more steel than currently exists. Academics such as Dr Julian Allwood at the University of Cambridge point to the need to design products that use fewer materials, last longer, and are produced more efficiently, to find ways of re-using scrap rather than recycling it. Leaders in the construction industry are exploring the re-use of steel rather than using recycled content, and new business models that enable products to be leased for the service they provide, rather than sold. Our challenge is to produce steel which is more sustainable, both during production and in use.

The outcome we need

We are an acknowledged leader in building a more resource-efficient economy, and so we are creating competitive advantage and significant value for both our customers and shareholders. We understand the technical, logistical and commercial challenges this represents, and we are ready to unlock the opportunities it offers our business.

Achieving our new outcome

Making efficient use of raw materials is already central to the success of our business. Within our new sustainable development framework, we are asking our business units to explore how they can support the circular approach to steel production and use. For example, how their operations can improve access to scrap steel, generate fewer production residues, develop products that can be re-used rather than simply recycled, and turn more by-products from steelmaking into valuable materials in their own right. We will work with them to consider how to mitigate any risks that could result from the shift towards the circular economy and how to create value from the opportunities it could present. This could mean collaborating with both suppliers and customers to develop innovative re-usable products, and exploring the potential of alternative business models.

What's new?

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News 19.03.2015 ArcelorMittal steel in Warsaw underground
Our Stories01.05.2016 Steel goes circular: re-using sheet piles
Our Stories01.04.2016 Collaboration on the Great Lakes
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Our Stories01.01.2014 Rails of steel
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