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ESG_Report

Dataset card Data Studio Files
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H2 e-
H2.
H2.
H2 CO.
H2 CO.
Clean Power.
Fossil Fuels with CCS.
Circular Carbon.
Iron electrolysis.
Water electrolysis.
EAF.
H2 DRI-EAF.
DRI-EAF.
CCS.
CCS.
H2 DRI-EAF.
CCS.
BF-BOF.
BF-BOF.
CCS.
Plastic.
Chemicals Fabrics.
Fuel 16 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
Incremental costs to produce steel* (OPEX and CAPEX)
Commercial horizon.
Energy infrastructure challenge.
Energy technology challenge.
Steel technology challenge.
To be determined 20-30 years.
Power infrastructure exists – to be expanded to accommodate steelmaking needs.
Electrolysis ironmaking +60-90% 10-20 years.
Green hydrogen economy needs to be created – can be done incrementally.
Lowering green hydrogen production costs.
Hydrogen ironmaking +20-35% 5-10 years.
Circular carbon and hydrogen economy expansion – can be done incrementally.
Develop commercial bio-coals, bio-cokes and bio-gases for steelmaking.
Commercial combined carbon and hydrogen steelmaking; upside of carbon capture and use +35-55% 10-20 years.
Develop large commercial natural gas-based hydrogen and carbon storage projects.
Hydrogen ironmaking +35-55% 5-10 years.
Develop economy-wide commercial carbon transport and storage infrastructure.
Commercial CO2 capture technologies +30-50% 5-10 years.
Develop economy-wide commercial carbon transport and storage infrastructure.
Commercial CO2 capture technologies • The level of private and public investment support.
This will dictate the speed of development of low-emissions innovation projects in order to assess their commercial viability; and, where such projects are successful, for the roll out of low-emissions technologies across different steel plants.
In view of these needs, we believe steel companies need to maintain a flexible technology innovation roadmap to adapt to the various technology development timelines, clean energy and policy landscapes of the future. Conversely, policy certainty from national and regional governments and institutions will be instrumental in supporting the steel industry to decarbonise at a pace commensurate with supporting the objectives of the Paris Agreement.
Source: ArcelorMittal internal estimates for transition to low-emissions steelmaking in Europe based on current factor prices. *Compared with average annual net income of steel industry, which between 2010-2017 was 2% of revenues.
17 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
Low-emissions technology pathways and policy scenarios.
We have developed four policy scenarios to assess the implications of different levels of policy commitment for the steel industry’s ability to meet the carbon challenge. We have used this analysis to inform our policy recommendations presented in chapter 6.
Policy scenarios: driving the transition to low-emissions steel.
A concerted public and private investment effort is essential to accelerate the pace of development and roll out of commercial low-emissions technologies and advance the timeline to make the steel industry ‘technology ready’ to meet the objectives of the Paris Agreement.
Steel is a global material traded directly across countries and continents in the form of sheets and bars for steel products, equipment, buildings and infrastructure. It is also embedded in the imported goods consumers buy, such as cars, appliances, etc.
Countries and regions that introduce a cost of CO2 emissions, but with neither supportive energy policies nor effective mechanisms to maintain the competitiveness of low-emissions versus higher-emissions steel, will fail to decarbonise their steel. What is more, it may in fact disadvantage their steel industry as production will migrate to other countries and regions that do not support decarbonisation, thereby exacerbating the carbon challenge globally (Stagnate scenario).
Even in jurisdictions actively providing financial support to develop and roll out low-emissions technologies, the steel industry will need further support. Without effective mechanisms to offset the structurally higher operating costs of deploying these technologies, and affordable access to the clean energy they need, the steel industry will be unable to make the necessary shift needed to meet the goals of the Paris Agreement (Wait scenario).
Countries and regions developing supportive energy policies, and establishing a fair mechanism to offset the structurally higher costs of low-emissions steel producers, will succeed in transitioning to low-emissions steelmaking (Accelerate scenarios). They will reap the benefits of a positive steel industry that contributes to their economies and to the carbon challenge. But only if such mechanisms are applied globally can this acceleration take place on a global scale and the steel industry become a successful partner in meeting the objectives of the Paris Agreement.
STAGNATE • Lack of access to sufficient and affordable clean energy • No mechanism to address high risk that steel production is made structurally uncompetitive across countries/regions • Slow development of low-emissions steelmaking technologies • No meaningful reduction in global steel CO2 emissions as production shifts to less carbon-regulated jurisdictions • Insignificant global progress to goals of Paris Agreement.
WAIT • Technology makes encouraging progress and is potentially ready for significant deployment within 10-20 years • But only fragmented access to affordable clean energy • No mechanism to address high risk of steel production being structurally uncompetitive in affected countries/regions • Marginal steel CO2 reductions globally as production shifts to less carbon-regulated jurisdictions • Limited progress towards goals of Paris Agreement.
ACCELERATE regionally • Technology makes encouraging progress and is potentially ready for significant deployment within 10-20 years • Access to sufficient and affordable clean energy in supportive countries/regions • Regions with more active climate legislation ensure mechanisms are in place to enable steel production to remain competitive, e.g. green border adjustment • Significant reductions in steel CO2 in supportive countries/regions • Partial global progress to goals of Paris Agreement.
ACCELERATE globally • Technology makes encouraging progress and is potentially ready for significant deployment within 10-20 years • Access to sufficient and affordable clean energy globally • Low-carbon legislation in place in the majority of countries, ideally with a common global framework or mechanism to ensure steel production remains competitive globally • Significant global reductions in steel CO2 • Global industry alignment with goals of Paris Agreement 18 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
Box 6: policy scenarios and their effectiveness in driving de-carbonisation of the steel industry.
Figure 3.
Table 2.
Policy challenge.
Structurally higher operating costs of low-emissions steelmaking.
Ineffective mechanism in place to offset structurally higher operating costs of low-emissions steelmakers versus higher-emissions steelmakers.
Ineffective mechanism in place to offset structurally higher operating costs of low-emissions steelmakers versus higher-emissions steelmakers.
Mechanisms to maintain competitive market by offsetting structurally higher operating costs of low-emissions steelmakers versus higher-emissions steelmakers and imports set in some countries and regions, e.g. green border adjustment.
Common global framework is implemented to maintain competitive market to offset structurally higher operating costs of low-emissions steelmakers versus higher-emissions steelmakers.
Clean energy infrastructure and allocation by sector.
No concerted policy in any market to incentivise and allocate clean energy to steel sector.
No concerted policy in any market to incentivise and allocate clean energy to steel sector.
Support for clean energy to steelmaking industry from clean power, circular carbon and carbon capture and storage infrastructure provided in only some countries and regions.
Support for clean energy to steelmaking industry from clean power, circular carbon and carbon capture and storage infrastructure provided globally.
Investment in low-emissions steelmaking technologies (development and roll out)
Limited public support for R&D to bring technologies to commercialisation maturity.
Accelerated public support for R&D to bring technologies to commercialisation maturity; some investment support for roll out of technologies.
Accelerated public support for R&D to bring technologies to commercialisation maturity; high levels of investment support for roll out of technologies.
Accelerated public support for R&D to bring technologies to commercialisation maturity; high levels of investment support for roll out of technologies.
Pace of deployment of low-emissions technologies.
Level of policy RESPONSE LOW HIGH.
HIGH.
STAGNATE.
WAIT.
ACCELERATE.
Regionally.
ACCELERATE.
Globally 19 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
5 ArcelorMittal strategy towards low-emissions steelmaking.
Energy efficiency, increased use of scrap, technology innovation and policy engagement are the four components of our climate action strategy.
Over the last 150 years, the steel industry has seen significant energy efficiency and yield improvements.11 While incremental improvements will continue, far more is needed to meet the objectives of the Paris Agreement.
Significant emissions reduction requires creative and innovative thinking, which is at the heart of our €250 million low-emissions steelmaking innovation programme.12.
ArcelorMittal’s low-emissions strategy has four components: 1. Energy efficiency in our steelmaking operations across the globe to help meet our medium-term emissions reduction targets.