Low emissions steel standards needed to market green steel: ArcelorMittal

Certification standards for low emissions steel may drive adoption and market differentiation, as renewable power capacity expansions boost steel demand, according to the head of sustainable development at ArcelorMittal.

Demand for certified steel may be seen from major steel buyers working with ESG and Scope 3 emissions targets, and the steel industry is progressing new standards to promote these values, ArcelorMittal's Alan Knight said on Jan. 20.

At the same time, costs to produce low carbon emissions steel via direct reduction of iron ore or other routes may need billions in investments and drive up costs, leading to debates on steel prices and demand.

"Will the market support us? Will the market choose steel made with these new technologies, but can it do it in a fairer way, will it pay the difference?" Knight said at a World Steel Association webinar.

An international industry drive to reclassify steel follows certification programs rolled out in markets such as aluminum with ASI, and forestry products with the Forest Stewardship Council.

Typically, major buyers have elected to procure compliant materials and offer sustainable products to consumers, getting the new standards adopted, he said.

As steel companies wrestle with prioritizing projects such as hydrogen and renewables power supply to meet future steel demand with low emissions, higher steel use intensity in the energy sector is expected from new renewables rollouts.

Industry group ResponsibleSteel may certify steel with different levels of emissions thresholds, making choices clearer for buyers, according to Knight.

"It's working on how can it combine the raw materials story and collaborate with IRMA [Initiative for Responsible Mining Assurance] and mining schemes, and come up with a product standard," said Knight. "And does it have a role to play to separate steel made with new green technologies with steel made today?"

At the same time, supporting the competitiveness of low emissions steel, and investments in new primary steelmaking technology and research, requires wider support from government policy and society embracing a circular economy.

Carbon border adjustment taxes to create a level playing field for steel markets, as well as sustainable finance and affordable renewable energy may be needed, Knight added.

ResponsibleSteel is working with members including steelmakers, automakers and other buyers, miners, industry associations and environmental groups to develop certification standards. These include agreeing emissions benchmarking with science-based targets.

The group has set up steel facilities audits, and ArcelorMittal plans to finalize site certification across Europe after end-year completion was delayed with the COVID-19 pandemic, Knight added.

ArcelorMittal, which last year set a 2050 group carbon neutral target, plans to continue to test recycling carbon in the steelmaking supply chain. By producing steel with carbon reused into ethanol and plastics with other applications, it may minimize steel emissions released outside the chain.

The company is testing hydrogen-based iron and steel making and even though it can use more ferrous scrap in steel production, removing carbon emissions from primary steelmaking is its core focus, Knight said.

"We need to change primary steelmaking, and that's where the challenge is," he said. "We believe the technology can be found to make steel without carbon. Yes, hydrogen is definitely one of those routes, but we think there are other routes as well which have other virtues, which are worth investing in to see if they will work."