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Photo: © ArcelorMittal.
July 2021.
ArcelorMittal Sestao to become the world’s first full-scale zero carbon-emissions steel plant.
The development is the result of a memorandum of understanding signed with the Government of Spain that will see an investment of €1 billion in the construction of a green hydrogen DRI plant at its plant in Gijón, as well as a new hybrid EAF. The DRI installation in Gijón will also enable ArcelorMittal Sestao to be the world’s first full-scale zero carbon-emissions steel plant. By 2025, the Sestao plant – which manufactures a range of flat steel products for the automotive and construction sectors, and general industry – will produce 1.6 million tonnes of zero carbon-emissions steel.
ArcelorMittal celebrates industry-first with ResponsibleSteel™ site certifications.
The company’s steelmaking sites in ArcelorMittal Belgium (Geel, Genk, Gent and Liège), Luxembourg (Belval, Differdange and Rodange) and Germany (Bremen and Eisenhüttenstadt) are the first steel plants globally to be independently audited and found to meet the standards required for ResponsibleSteel, the industry’s first global multi-stakeholder standard and certification initiative.
Agreement concludes second investment in ArcelorMittal’s XCarb™ innovation fund.
ArcelorMittal announced it has completed its second investment in the Company’s recently launched XCarb™ innovation fund, serving as lead investor in Form Energy’s $200 million Series D financing round, with a $25 million equity injection.
ArcelorMittal and SEKISUI CHEMICAL announce carbon recycling partnership.
ArcelorMittal and SEKISUI CHEMICAL announced they are partnering on a project to capture and re-use carbon waste gases from the steelmaking process, which holds the potential to reduce dependence on fossil resources and contribute to the decarbonisation of steelmaking.
ArcelorMittal publishes second Group Climate Action report.
ArcelorMittal announced publication of the second Group Climate Action report targeting 25% global reduction in CO2e emissions intensity by 2030 (scopes 1+2) with anticipated cost of US$10 billion; Europe target increased to 35% reduction in CO2e emissions intensity by 2030 (Scopes 1+2) reflecting recent announcement that Sestao will become Europe’s first full-scale zero carbon-emissions plant; new collaboration announced with Science Based Targets initiative; targets to be linked to executive remuneration.
Section 1 Progress overview 1.2 ArcelorMittal’s timeline since publication of its first Climate Action Report.
ARCELORMITTAL • CLIMATE ACTION REPORT 2 10
These assumptions form the basis of the policybased outlook we outlined in our first Climate Action report, in which we demonstrated how the speed of decarbonisation by steelmakers is linked to policy developments.
Our decarbonisation strategy in each part of the world where we operate is now based on the same assumptions. In some countries, for example Europe and Canada, we see sufficient policy incentives to enable ArcelorMittal to ‘Accelerate’ its decarbonisation plans. Where these conditions do not yet exist, we will continue to make improvements to ‘Move’, but it is difficult to ‘Accelerate’ without becoming uncompetitive in that market.
Our policy-based scenarios demonstrate the role of policy support in driving the pace of decarbonisation.
Accelerate globally.
Accelerate regionally.
Move.
Stagnate.
Pace of deployment of low-emissions technologies.
Level of policy RESPONSE.
HIGH LOW.
HIGH.
Jurisdiction 2021-25 2026-30 2031-35.
EU* Accelerate Accelerate Accelerate.
Canada** Accelerate Accelerate Accelerate.
USA Move Accelerate Accelerate.
Mexico Move Move Accelerate.
Kazakhstan Move Move Accelerate.
Ukraine Move Move Accelerate.
Brazil Move Accelerate Accelerate.
South Africa Move Accelerate Accelerate.
Section 2 Our decarbonisation strategy.
ArcelorMittal is committed to reaching net-zero on a global basis by 2050.
We have now adopted an ambitious set of carbon targets with which to lead our sector: by 2030, we are targeting a 25% reduction in our CO2e emissions intensity across our global steel and mining operations, with an increased European target of 35% (up from 30%). Both targets cover both scope 1 and 2.
These targets create the milestones we need to achieve in order to meet our long-term target of net-zero by 2050, and are set against our 2018 baseline.
For the purpose of setting a group target, we have made a key set of assumptions as a base case: • The cost of green hydrogen will become increasingly competitive over the next decade but will still require government support • Carbon capture, utilisation and storage infrastructure will take time to be built at scale. While Europe is expected to take the lead, CCUS infrastructure has the potential to expand quickly in the US and Canada – providing some potential upside to our assumptions • Different regions of the world will continue to move at very different paces and the level of climate ambition will differ between jurisdictions at any given time • The introduction of climate-friendly policies in other regions will be 5-10 years behind Europe • As it has been reported, 2060 may not be a realistic net-zero target for developing economies, which may mean emissions do not peak until 2030.
ArcelorMittal’s decarbonisation plans will accelerate in each jurisdiction as the necessary policy conditions are in place. See section 2.5 for more details.
ArcelorMittal’s expected response Based on anticipated policy developments in next 5 years * Scope and extension conditional upon appropriate level of European.
Union and Member States financial support as well as final revised ETS system and CBAM Canada ** Federal + Ontario, Quebec 2.1 Our targets 25% 35%
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 (scopes 1 and 2)
ARCELORMITTAL • CLIMATE ACTION REPORT 2 11
cycles. Natural carbon cycles include use of sustainable forestry and agriculture residues, to produce bioenergy for use in steelmaking. Emissions from use of this bioenergy will be captured by the regrowth of the biomass waste used. Synthetic carbon cycles rely on use of waste plastics as energy source, transforming the carbon in waste gases through CCU into equivalent new plastics, and ensuring no emissions are generated.
C. Increased use of scrap.
As well as using scrap in the EAF, we can increase the use of low-quality scrap in BF-BOF steelmaking process by improving steel scrap sorting and classification, installing scrap pre-melting technology and adjusting the steelmaking process to accommodate scrap.
D. Clean electricity.
Reducing our scope 2 emissions means mainly focusing on sourcing low-carbon electricity. This will be an increasing challenge for ArcelorMittal as we launch projects to transition from BF-BOF technology to scrap and DRI-EAF technology, which will result in electricity becoming a greater part of the energy mix we use to make steel.
We recognise we cannot rely on the electricity grid becoming more decarbonised as a whole and need to focus on increasing the amount of clean electricity we consume. We plan to do this by purchasing renewable energy certificates and by direct power purchase agreements (PPA) with suppliers from renewables projects.
E. Offsetting residual emissions.
While ArcelorMittal is committed to achieving net zero by reducing CO2e emissions to the atmosphere from its operations, there are likely to remain residual emissions for which either there will be no feasible technological solution or the solution involves excessively high economic or social costs.
For these residual emissions – today we estimate less than 5% of total emissions – ArcelorMittal will buy high-quality offsets or launch projects to generate high-quality carbon credits that would not have happened without the company’s intervention.
B. Energy transformation.
Over recent decades, the steel industry has made enormous efficiency improvements in the efficient use of energy in BF-BOF steelmaking via multiple technologies. Further innovations continue to evolve which reduce CO2 emissions, such as the use of coke oven gas in the tuyeres of the blast furnace, drawing on the rich hydrogen content of the gas. However, these innovations continue to rely significantly on the use of fossil fuels.
The energy used to make steel in future years will undergo a further and more radical transition of the industry to clean energy vectors, as we have described in our previous climate action reports. This will involve shifting to one or combination of three alternatives: clean electricity (which could be in the form of green hydrogen), continued use of fossil carbon coupled with CCS to ensure no carbon is emitted, and use of circular carbon either through natural or synthetic carbon.
A. Steelmaking transformation.
In the course of the coming decades, the steel industry will undergo a transformation of the assets used to make steel on a scale not seen for over 100 years. This includes switching ironmaking from the BF-BOF (Blast Furnace-Basic Oxygen Furnace) to the DRI, and from iron ore preparation in the sinter plant (using heat or pressure to compact a material) to the pellet plant (which compresses or moulds the iron material into the shape of a pellet). Ironmaking with pellets in the DRI is usually coupled with EAF.
Historically there has been limited use of the DRI-EAF route except in regions with a very low natural gas price. However, given the increasing cost of carbon and the requirement to reduce emissions, transitioning to natural-gas based DRI-EAF can be a first step with a proven technology that has the potential to further innovate and decarbonise through the use of green hydrogen.
For the first time, we are disclosing a roadmap that shows our journey to net zero.
2.2.1 Five levers.
Our roadmap features five levers – in essence, groupings of actions and initiatives – that act as stepping stones to achieving carbon neutrality by 2050. These are:
A. Steelmaking transformation.
B. Energy transformation.
C. Increased use of scrap.
D. Sourcing clean electricity.
E. Offsetting residual emissions.
Section 2 Our decarbonisation strategy 2.2 Our net-zero roadmap.
DRI-EAF Green electricity Green hydrogen Zero-emissions steel.
ARCELORMITTAL • CLIMATE ACTION REPORT 2 12
Up to 2030, the waterfall chart shows a breakdown of the 25% global reduction in CO2e emissions intensity we are targeting, taking into account announced projects and initiatives we expect to announce over the coming years.
1. Announced projects – Innovative DRI-EAF 2. Announced projects – Smart Carbon and gas injection 3. Further projects in development in Europe 4. Project in NAFTA to be announced; further projects in development ex-Europe 5. Sourcing clean electricity.
We provide details of announced projects in Section 2.3.
Section 2 Our decarbonisation strategy 2.2 Our net-zero roadmap.
Carbon in the atmosphere.
Carbon sequestered.
Bioenergy/ CCS with steelmaking as carbon removal 100% 2018.
Key A. Steelmaking transformation (footrprint change, energy efficiency, pellets) B. Energy transformation (CCUS, hydrogen, bioenergy) C. Increased scrap use D. Sourcing clean electricity E. Offsetting residual emissions 2030 2050.
Scope 1 75%
Net-zero.
Scope 1 Offsetting Carbon removal Scope 2 Scope 2 -7.5% -5.1% -1.5% -2.1% -1.6% 2. Announced projects - Smart Carbon + gas injection 1. Announced projects - Innovative DRI-EAF 3. Further projects in development in Europe 4.1 Further projects in development ex-Europe 5. Sourcing clean electricity.
Steelmaking transformation.
Energy transformation.
Increased Scrap use.
Sourcing clean electricity Offsetting residual emissions.
B A, C A, B, C.
B
A.
C
D.
E A, B, C -7.4% 4. Project in NAFTA to be announced.
A, B, C D.
The waterfall chart 2030-2050 breakdown is for illustrative purposes only.