Green steel definition
Background
Not every country has set standards for low-emissions steel or defined what constitutes green steel production. Even within an organization, terminology such as “net zero,” “green,” “low-emissions,” and steel that has a slight emissions reduction are frequently used interchangeably. Having internationally harmonized definitions and standards could help greatly throughout the energy transition, as it would allow for the setting of investment principles, regulations, and decarbonization policies that promote a net-zero steel production pathway.[1][2]
Without a clear, enforced definition, steel with slightly fewer carbon emissions — still far from being net zero — is allowed to be labeled green steel.[3] This low standard reduces the effectiveness of market incentives, as consumers and investors are left with imperfect information, struggling to identify which products have a low carbon footprint or to evaluate the price-performance ratio. With clear, internationally harmonized definitions and customer awareness, the transition could be effectively driven by policies and the market.[2]
A green steel transition can serve many different purposes, such as creating transparency for producers, consumers, or investors.[4] Both political actors and steel producers from the plant to the international level, for example, face difficulties in creating emissions reduction strategies if they are unsure which technologies are considered green in the long term.[2] Definitions can help to reduce uncertainty and increase transparency about the most effective decarbonization options, improving decision-making and subsequent emissions reductions. Without an understanding of the actual emissions of steel, from a strong certification system, for example, consumers including the automotive industry may struggle to distinguish between net zero and low-emissions steel, reducing their ability to successfully decarbonize their own supply chains.[1] The lack of distinction also prevents steel producers, primary consumers, and secondary consumers from marketing their products appropriately. A clear definition would allow net-zero steel producers to communicate their efforts and gain a competitive advantage, thus increasing profitability. Moreover, carbon-intensive steel would no longer be able to market itself as green, which may incentivize a change in production methods towards low-emissions steelmaking due to the loss of customers.[1]
Several green steel definitions, standards, protocols, and initiatives have been created related to steel, each targeting different interests and stakeholders in the supply chain.[4] While it may be impossible to have only one standard for all purposes and contexts, having a few strong standards and harmonized protocols on a global level could have a large impact. For the definition or certification of green steel to be aligned with the 1.5°C target, distinctions are needed between primary and secondary steelmaking, as well as Scope 1, 2, and 3 emissions through clear boundaries and guidelines.[4]
Based on the International Energy Agency’s (IEA) allocated carbon budget for the steel industry under the 1.5°C scenario, the following boundaries would be necessary: For primary steelmaking, the weighted average CO2 emissions intensity needs to be below 0.9 metric tons CO2 per metric tonne of crude steel in 2040, and below 0.1 metric tonnes CO2 per metric tonne of crude steel in 2050. Emissions included should be those related to ironmaking processes (Scope 1), electricity use (Scope 2), the purchase of pig iron and DRI, as well as indirect methane emissions from natural gas and coal mining systems (Scope 3). For secondary scrap-based steelmaking, the weighted average CO2 emissions intensity needs to be below 0.2 metric tonnes CO2 per metric tonne of crude steel in 2040, and below 0.1 metric tonnes CO2 per metric tonne of crude steel in 2050.[4]
Policy Action
Policy targets to create a green steel definition include:[5]
- Clearly differentiate between different types of steel, based on their emissions, to create definitions of low-emissions and green steel.[6]
- Collaborate globally to align on a green steel definition, potentially through an international agreement or the harmonization of different definitions and certifications.
- Integrate green steel definitions in investment criteria, among both governments and financial stakeholders.
Examples and Case Studies
ResponsibleSteel (Certification and Standards)
Climate Bonds Green Steel Criteria
Clean Standards to Green US Steel
External Links
Energy Transitions Commission on the Need for a Green Steel Definition
Green Steel Definitions around the World
References
- ↑ 1.0 1.1 1.2 Energy Transitions Commission (2021). "Steeling Demand: Mobilising buyers to bring net-zero steel to market before 2030". Energy Transitions Commission.
{{cite web}}: CS1 maint: url-status (link) - ↑ 2.0 2.1 2.2 Swalec (2022). "Pedal to the Metal. It's not too late to abate emissions from the global iron and steel sector" (PDF). Global Energy Monitor.
{{cite web}}: CS1 maint: url-status (link) - ↑ Swalec, Caitlin (March 2022). "Interview with Nele Merholz for "Breaking the Barriers to Steel Decarbonization - A Policy Guide"".
{{cite web}}: Missing or empty|url=(help)CS1 maint: url-status (link) - ↑ 4.0 4.1 4.2 4.3 Hasanbeigi (2022). "Steel Climate Impact—An International Benchmarking of Energy and CO2 Intensities". Global Efficiency Intelligence.
{{cite web}}: CS1 maint: url-status (link) - ↑ Merholz, Nele (2023). "Breaking the Barriers to Steel Decarbonization - A Policy Guide".
{{cite web}}: CS1 maint: url-status (link) - ↑ MPP (2022). "Making net-zero steel possible" (PDF). Mission Possible Partnership.
{{cite web}}: CS1 maint: url-status (link)
