Our challenge

As the world’s leading steel producer, we have a responsibility to be at the forefront of a transition in steel that achieves the goals of the Paris Agreement.  

Steelmaking accounts for some 7-9% of global carbon emissions today. The scale of the challenge we face has been clarified by the latest UN reports: the world needs to be carbon neutral by mid-century to limit the rise in global temperatures to 1.5C. And yet to make this transition, and to achieve the UN Sustainable Development Goals, our future world will need more steel, not less. For the steel industry, nothing short of a transformation is needed.  

Our approach

Focus on iron ore reduction: Iron ore reduction is where the vast majority of carbon emissions come from in steelmaking. Steel can also be made from scrap, but the global amount that can be produced, whilst much lower in emissions, is limited by the availability of end-of-life steel. Currently supplies are only enough to support one third of steel production globally.  By 2050 end-of-life scrap will still only contribute under half of global steel demand, so the world will continue to rely on iron ore until around 2100.

The carbon challenge for the industry in the coming decades must therefore be to transform the way in which we turn iron ore into steel. This is where our focus lies when it comes to reducing our carbon footprint.

Transforming how we make steel depends on the energy sources available: Despite the industry’s advances, we need to transition away from emissions-intensive energy, or ensure that emissions are captured and utilised or stored. There are three alternative sources of energy for iron ore reduction:

1. Circular carbon such as biomass and plastic waste, allowing us to recycle carbon in nature as well as society in a continuous loop;
2. Clean electricity, either to power electrolysis or to produce hydrogen, both of which can be used for iron ore reduction;
3. Fossil fuels – coke, natural gas or hydrogen derived from fossil fuels, but with carbon capture and storage.

There is no single solution. Different technology pathways, or a combination, are likely to develop in different parts of the world depending on how public policy shapes the availability of alternative energy sources. 

Making use of renewable energy: Whilst no country is generating enough clean energy to power low emissions steelmaking, where it is available at competitive prices we are both making use of and contributing to the growth in renewable energy where we operate.

We generate renewable energy onsite in Ghent, Belgium, with 10 wind turbines and a 9.7MW solar roof, and further installations at our Bremen and Hamburg plants in Germany, and Fos-sur-Mer in France. We are actively exploring the potential for power purchase agreements to supply our electric arc furnace steel plants with renewable energy wherever prices are competitive.

In 2018, we concluded an agreement to purchase electricity from two solar farms in Spain expected to generate 8.6GWh annually. In Ghent, Belgium, we installed the country's target solar roof in 2019, with a 10MW capacity. This is part of the plan to install 50MW of solar and wind capacity by the end of 2020.

As renewables increasingly become part of electricity grids, balancing generation and consumption is key. At our Hamburg site, a “time shift” process regulates the power consumption of the electric arc furnace to absorb surplus electricity from nearby wind power generation.