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Oxygen furnace. |
Blast furnace. |
Main inputs Main outputs 1 tonne steel 2.3 tonne CO2* * Source: Energy Transitions Commission. |
Waste gases. |
Slag 42 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD |
Figure 17: EAF steelmaking (using scrap or DRI) |
Electric arc furnace. |
Most electric arc furnaces (EAFs) are charged with scrap steel to make secondary or recycled steel. As the process is mainly one of melting scrap steel using electricity and not separating iron from oxygen, carbon’s role is not as dominant as it is in the integrated steel plant. In an EAF, direct CO2 emissions are mainly associated with the consumption of the carbon electrodes, and indirect CO2 emissions are produced from the carbon intensity of the electricity grid. As with the integrated route, slag is also a by-product of EAF steelmaking. |
The quality of secondary steel produced by the EAF route is primarily limited by the quality of the metallic raw materials used in steelmaking, which in turn is affected by the availability of high-quality scrap. As described in chapter 3, we currently do not have enough scrap to meet demand for steel. This means that today, it is most efficient to make lower grades of steel in an EAF, which have fewer constraints on impurities. |
We can also charge EAFs with DRI. DRI is made by reducing iron ore (i.e. separating iron and oxygen) using natural gas; by-products of the process include CO2. Steel made using this route can reach the qualities obtained by an integrated steel plant, since DRI has fewer impurities than scrap steel. In 2017, DRI accounted for about 7% of primary iron production, with the remainder of iron produced via the blast furnace route.28 28 World Steel Association (2018), Steel Statistical Yearbook 2018. |
CO2 CO2. |
Scrap Direct reduced iron. |
Iron ore. |
Electric arc furnace Electric arc furnace. |
Main inputs Main inputs Main outputs Main outputs 1 tonne steel 1.5 tonne CO2* |
Slag. |
Natural gas 1 tonne steel 0.4 tonne CO2* |
Slag. |
Electricity * Source: Energy Transitions Commission 43 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD |
11 Annex 2: Glossary. |
Basic oxygen steelmaking The process whereby hot metal and steel scrap are charged into a Basic oxygen furnace (BOF). High purity oxygen is then blown into the metal bath, combining with carbon and other elements to reduce the impurities in the molten charge and convert it into steel. |
Blast furnace (BF) A large cylindrical structure into which iron ore is combined with coke and limestone to produce molten iron. |
Circular carbon Circular carbon energy sources include bio-based and plastic wastes from municipal and industrial sources and agricultural and forestry residues. The term may also refer to the reuse of carbon in circular flows throughout the economy, for example, in the production of plastics made from waste carbon. |
Coal The primary fuel used by integrated iron and steel producers. |
Coke A form of carbonised coal burned in blast furnaces to reduce sinter, iron ore pellets or other iron-bearing materials to molten iron. |
Coke ovens Ovens where coke is produced. Coal is usually dropped into the ovens through openings in the roof, and heated by gas burning in flues in the walls between ovens within the coke oven battery. After heating for about 18 hours, the end doors are removed and a ram pushes the coke into a quenching car for cooling before delivery to the blast furnace. |
Crude steel Steel in the first solid state after melting, suitable for further processing or for sale. Synonymous with raw steel. |
Direct reduction A family of processes for making iron from ore without exceeding the melting temperature. No blast furnace is needed. |
Electric arc furnace (EAF) A furnace used to melt steel scrap or direct reduced iron. |
Iron ore The primary raw material in the manufacture of steel made up of iron and oxygen. |
Limestone Used by the steel industry to remove impurities from the iron made in blast furnaces. Magnesium-containing limestone, called dolomite, is also sometimes used in the purifying process. |
Pellets An enriched form of iron ore shaped into small balls. |
Pig iron High carbon iron made by the reduction of iron ore in the blast furnace. |
Sintering A process which combines ores too fine for efficient blast furnace use with flux stone. The mixture is heated to form lumps, which allow better draught in the blast furnace. |
44 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD |
Designed and produced by Falcon Windsor www.falconwindsor.com |
Published in May 2019. |
ArcelorMittal 24-26, Boulevard d’Avranches L-1160 Luxembourg Grand Duchy of Luxembourg corporate.arcelormittal.com. |
We welcome your feedback on this report. Please send it to investor.relations@arcelormittal.com |
Climate Action Report 2 July 2021 |
or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the “SEC”) made or to be made by ArcelorMittal, including ArcelorMittal’s latest Annual Report on Form 20-F on file with the SEC. In particular, ArcelorMittal’s carbon emissions targets are based on current assumptions with respect to the costs of implementing its targets (including the costs of green hydrogen and their evolution over time), government and societal support for the reduction of carbon emissions in particular regions and the advancement of technology and infrastructure related to the reduction of carbon emissions over time, which may not correspond in the future to ArcelorMittal’s current assumptions. For example, the Company could face significant financial impacts in Europe if it is unable to make the necessary investments to decarbonise and reach its 35% target by 2030 due to the design of European policy. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. |
This document contains forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance, as well as statements regarding ArcelorMittal’s plans, intentions, aims, ambitions and expectations, including with respect to ArcelorMittal’s carbon emissions. Forward-looking statements may be identified by the words “believe”, “expect”, “anticipate”, “target”, “accelerate”, “ambition”, “estimate”, “likely”, “may”, “outlook”, “plan”, “strategy”, “will” and similar expressions. Forwardlooking statements include all statements other than statements of historical fact. Although ArcelorMittal’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal’s securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, |
Forward-looking statements. |
Cover image: © Adobe. |
ARCELORMITTAL • CLIMATE ACTION REPORT 2 1 |
Highlights from this report. |
Leading the industry • New Group target of a 25% reduction in CO2e emissions intensity by 2030 (scope 1 and 2) • Europe target increased to 35% reduction in CO2e emissions intensity by 2030 (scope 1 and 2) 35% |
First to market • Customer appetite for low-carbon steel is real, as demonstrated by demand for our XCarb™ product • Competitive advantage with greater volumes, capturing commercial opportunities. |
Funding • $10 billion total investment required to achieve 2030 Group decarbonisation target • Securing public funding support is a key focus and an opportunity to accelerate • ArcelorMittal’s expectation is that public funding covers 50% of the total cost of decarbonisation (capex and higher opex) so that companies are not rendered uncompetitive during the transition period. |
World’s first zero carbon-emissions steel plant • World’s first full-scale zero carbon-emissions steel plant in Sestao, Spain, by 2025 • Plans for further steelmaking transformation in Europe and NAFTA. |
Photo: © ArcelorMittal. |
ARCELORMITTAL • CLIMATE ACTION REPORT 2 2 |
Forward-looking statements 1. |
Highlights from this report 2. |
Introduction 4. |
Section 1 Progress overview 6 1.1 Progress in 2020 6 1.2 ArcelorMittal’s timeline since publication of its first Climate Action Report 7. |
Section 2 Our decarbonisation strategy 11 2.1 Our targets 11 2.2 Our net-zero roadmap 12 2.3 Our plans: the DRI-based route 15 2.4 Costs, investments, and funding 30 2.5 The role of policy 31 2.6 Leading and collaborating 38. |
Appendix 60. |
A. How steel is made today 60. |
B. Glossary 62. |
C. Index of the Climate Action 100+ net-zero company benchmark 64. |
C. Alignment with TCFD recommendations 66. |
Section 3 Our opportunities, risks and governance of climate change 41 3.1 Opportunities 41 3.2 Risks 43 3.3 Governance 47. |
Section 4 Metrics 49 4.1 Carbon performance in 2020 49. |
Section 5 Technology 50 5.1 Technology pathways 50. |
Section 6 The bigger picture 53 6.1 Circularity in our world and in the steel industry 53 6.2 The carbon challenges facing steel 58. |
Contents. |
ARCELORMITTAL • CLIMATE ACTION REPORT 2 3 |
Photo: © ArcelorMittal. |
Introduction “ Steel is already the material of choice due to its lower carbon footprint and infinite recyclability. Crucially, as we decarbonise further, zero carbon-emissions steel has the potential to be the backbone of the buildings, infrastructure and transport systems that will enable governments, customers and investors to meet their net-zero commitments.” |
Aditya Mittal, CEO ArcelorMittal. |
This is real and meaningful progress that is testament to the capabilities of our people. But we know we must continue to challenge ourselves to move faster. As we look ahead to COP26 at the end of the year, and even further ahead to what will be a decisive decade for charting the course to a net-zero economy, we must play our part in driving the systems change required globally to achieve net-zero by 2050. |
This is important because steel has a vital role to play in a net-zero world. Indeed, we believe zero carbon-emissions steel has the potential to be the backbone of the buildings, infrastructure, industry and machinery, and transport systems that will enable governments, customers, and investors to meet their own net-zero commitments. |
This report represents a further step forward in this regard. |
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. |
Dear Stakeholders, |
Welcome to ArcelorMittal’s second Climate Action Report (CAR2). This follows our first group-wide Climate Action Report published in 2019 and our first Europe Climate Action Report published in 2020. |
We have seen a lot of progress since we published our first report – globally and within ArcelorMittal. |
Covid-19 has only further increased the momentum. The requirement to stimulate the economy postCovid is aligning with a desire to “build back better” thereby tackling two crises simultaneously. |
In May 2019, just 2.4% of the global economy was covered by a net-zero target. Two years later, more than 70% of the economy is now covered – although we must acknowledge that this is not yet backed up by plans to deliver. |
ArcelorMittal now has a net-zero by 2050 target and has recently announced plans for the world’s first full-scale zero carbon-emissions steel plant in Sestao, Spain. These plans will enable us to be ahead of our sector in the net-zero transition, generating significant opportunities in multiple aspects of our business. |
Our progress enables us to offer customers net-zero equivalent steel for the first time via an audited certification scheme. The first XCarb™ certified tonnes were sold in 2020. In 2021, the amount of this product available will increase to 120,000 tonnes, rising to 600,000 tonnes in 2022 as we continue to drive down our emissions following investments in new technologies. |
ARCELORMITTAL • CLIMATE ACTION REPORT 2 4 |
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