Another Company Moves Toward Lower Carbon Steel

ArcelorMittal releases some ambitious initiatives and targets.

A view of the steel industry on April 30, 2021 in Taranto, Italy. Arcelormittal recently closed a deal with Invitalia to create a new public-private partnership and relaunch the group and the Taranto plant, which is the largest steel factory in Europe.

 Donato Fasano/Getty Images

When Treehugger design editor Lloyd Alter wrote about a pilot project to create carbon-free steel, he noted that achieving these goals would take a decade—and we’d therefore need to focus on demand reduction, and alternative materials, even as steel makers decarbonize. Steelmakers themselves seem intent on proving that point. 

The latest example comes from a Climate Action Report published by ArcelorMittal, which contains some relatively ambitious initiatives and targets. These include: 

  • A group-wide target of 25% reduction in carbon dioxide equivalent (CO2e) emissions intensity by 2030 
  • A 35% reduction in CO2e emissions intensity for European operations
  • The first full-scale zero carbon steel plant to launch by 2025
  • And a net-zero goal by 2050

Steel is, pretty much by definition, a “hard to abate” sector of the economy. It is massively energy and resource-intensive, and not something where you can simply switch out feedstocks or energy sources quickly. The ArcelorMittal report pretty much acknowledges that and notes progress will be very much reliant on government intervention and support.

In fact, company CEO Aditya Mittal acknowledges that in his introduction, pointing to the fact that European goals are more ambitious than the company-wide goals for a very specific reason: 

“We have, for the first time, set a 2030 group CO2e emissions intensity reduction target. At 25%, this reflects the unequal pace of change that is the reality of the world’s decarbonisation journey. In regions like Europe, where we are observing an ‘Accelerate’ policy scenario, we can be more ambitious – with plans to reduce CO2e emissions intensity by 35% within the next decade. In other regions, we must recognise that without sufficient incentives and policy support, it is much harder for steel to decarbonise – and being a first mover will only result in being rendered uncompetitive in that market.”

And this is where climate and policy folks not directly tied to the steel industry will have to be careful. On the one hand, it’s hard to imagine a world where steel is not still a significant part of our built and engineered environments—including some critical infrastructure that will help us decarbonize. So it makes sense for governments to support, incentivize and/or mandate lower carbon steel making. 

But given that the AccelorMittal report expects a full 50% of the cost of decarbonization to be covered by public funding, we really need to apply scrutiny as to where our money is being spent. This is actually a lesson that applies well beyond the steel industry too: 

  • How much should we be spending to decarbonize steel, and how much should we be investing in material efficiency or low or even negative carbon building materials?
  • How much should we be subsidizing electric cars, and how much should we be designing our environments to make cars less necessary and/or encourage smaller, lighter vehicle use?
  • How much should we be supporting lower carbon aviation, and how much should we be making aviation less necessary? 

You get the picture. I have a reasonable amount of sympathy for folks in high, hard-to-abate sectors who are genuinely trying to find a path down. We probably need their efforts to succeed on some level. But given their pace of progress will almost certainly be slower than the rest of society’s, we’re going to need to match emissions intensity reductions with demand reduction too. 

Like so many things, there are no simple answers. It’s not a case of either/or. But it is a case of how much of either we really want to put our money towards.