Climate change
The road forward
Steel-making accounts for around 3.2 percent of man-made CO2 emissions and 27 percent of the total emissions from manufacturing.
60-65 percent of the world's steel is produced by the primary blast furnace method. On average, every tonne of steel produced this way results in 1.5 to 2 tonnes of CO2. There is an alternative process using electric arc furnaces, which produces much lower emissions, but its use is limited by the availability of scrap and scrap substitutes. In 2007, approximately 24 percent of our crude steel was produced this way.
We also prevent potential emissions by being the world's largest recycler of steel, and encouraging our customers to do the same. As a result we're making a significant contribution towards the 600 million tonnes of CO2 which are already being saved every year by initiatives like these.
There is an alternative process using electric arc furnaces, which produces much lower emissions, but its use is limited by the availability of scrap and scrap substitutes. In 2008, approximately 25 percent of our crude steel was produced this way.
Overall our steel-making operations emitted approximately 223 million tonnes of CO2 in 2008. We're working hard to reduce this, and in Europe, for example, we've cut our carbon footprint by more than 20 percent since 1990. Achieving a significant further reduction in our overall worldwide emissions is a tough challenge, but we're committed to playing our own part in concerted worldwide efforts to combat climate change. Our recent commitment to the UN Global Compact 'Care for Climate' declaration is proof of this.
After analysis of our 2007 CO2 performance we have set ourselves the target of reducing emissions by 170kg per tonne of steel produced by 2020; equivalent to an 8% reduction in absolute emissions. This will be achieved through process and energy efficiency improvements and optimising recycling rates.
We know that real progress will mean substantial expenditure on new technologies, and we will be looking to governments and regulators to ensure that this level of investment is supported by government backing for the development of carbon capture and storage technology, by effective carbon markets, and by robust policy frameworks which cover all the major steel-making countries.
We're already working with the World Steel Association to develop an international and industry-wide approach to CO2 monitoring and reduction, which would be a major step forward for our sector.
Work already underway
New technical and technological developments have cut our industry's CO2 emissions in Western Europe by nearly 50 percent over the last 30 years. However, we're now at the upper limit of the improvements that can be gained from these processes, and with this in mind we've set up a co-ordinated programme of activities to address climate change in the short, medium, and long term.
This ranges from the use of established market mechanisms like the EU emissions trading scheme, to proactive dialogue with regulators, to active and concerted efforts to develop cleaner products and processes. Our work on initiatives like the EU 'Ultra-Low CO2 Steel-making' project are a key part of this.
The work is supported and directed by a multi-disciplinary climate change committee, which includes senior managers from environment, energy, finance, treasury, mergers and acquisitions, international affairs, technology, research and development, and corporate responsibility departments.
In the short term there's still a lot we can do to bring all our plants up to the level of the best. Many of our European plants are already efficient, and the Tubarăo plant in Brazil now manages to generate all its power from gas recovery. As a result Tubarăo was the first ArcelorMittal operation to receive Certified Emission Reductions (or CERs) under the Kyoto Protocol, in November 2007.
Establishing a solid baseline
Steel industry emissions can be hard to quantify, because there are so many processes involved, and many different variables relating to the structure of the plant, the type of power used, and the sort of products being produced.
The first step for us, therefore, was to develop our own system for comparing the efficiency of our different plants. This helps us share best practice more efficiently, reduce energy use, predict future performance, and determine challenging but realistic emissions targets for the whole Group.
The results gained from the 2007 survey are now being used as a practical baseline going forwards. They've also enabled us to determine the carbon intensity of our two main production processes. The integrated route produces around 2.460 tonnes of CO2 per tonne of steel, while electric arc furnaces emit 0.580 per tonne.
We're also using two other production processes that emit much less CO2. Direct Reduction of Iron Ore is based on natural gas, and we're now the biggest user of this process in the world. The other method is biomass-based and uses charcoal to produce pig iron from Brazilian eucalyptus forests. Both these approaches have a part to play, but their overall impact is limited by the availability of cheap natural gas on the one hand, and the scarcity of eucalyptus biomass on the other.
Action on other emissions
Despite ongoing improvements in the coke sintering process, steel-making produces significant quantities of sulphur dioxide and nitrous oxide, as well as CO2. On average 2.191 kg of sulphur dioxide and 1.389 kg of nitrous oxide is produced per tonne of steel.
We're investing heavily in upgrading our sites with best available technology, and spent over US$ 300 million on this in 2007. The combination of bag filters and slaked lime injection can cut up to 90 percent of sulphur dioxide emissions, and we're already using this process at our French plant at Fos-sur-Mer.
Other investments in 2007 included:
- US$ 50 million on coke oven gas desulphurisation at the Kryviy Rih plant in the Ukraine, and US$ 100 million on dust collection and treatment at the same plant
- US$ 40 million on coke oven gas cleaning at Vanderbijlpark in South Africa, as part of a three year US$ 100 million environmental investment programme
- US$ 32 million on de-dusting at Galati, Romania
- US$ 30 million on coke oven de-dusting at Alvilés, Spain.
Dust is another, more visible, by-product of the steel-making process. This is another area where performance varies widely across the Group, but this also means that we have the opportunity to share best practice and improve our track record overall.
Emissions reporting
The way we report our emissions broadly complies with the Greenhouse Gas Protocol; the international accounting mechanism for quantifying and managing greenhouse gas emissions.
To better reflect the complexities involved in steel-making, we've started working with the World Resources Institute and World Business Council for Sustainable Development to develop and test a more customised tool.
This will also allow us to measure our total footprint more accurately, taking into account our mining activities and the emissions associated with transporting both raw materials and finished products.
We also run open days at many of our plants, where we invite local people and key stakeholders to visit the site and assess our environmental performance and objectives.
Case study: Open house for local stakeholders in Belgium