Earlier this June, the SteelZero team attended the World Steel Open Forum event in Brussels. While the event laid bare the scale and urgency of the investment challenge ahead for the steel industry, there were a number of areas where the conversation included grounds for optimism.
From secrecy to transparency: Reasons for emerging optimism
In an optimistic turn of affairs, conversations around transparency and accountability in the steel industry have progressed significantly over the last year. Where the 2023 Open Forum saw steelmakers still clinging to hopes of keeping carbon emission data under wraps by pleading that the data was commercially sensitive, it was positive to hear representatives from steel federations acknowledging the need for progress. The EU Carbon Border Adjustment Mechanism (CBAM) remains a source of frustration for many – but it is clearly driving changes in attitude.
Further strengthening the trends pointing towards the need for revolution rather than evolution were sessions looking at the prospects for some of the more incremental decarbonisation approaches that had previously been heralded as answers to the decarbonisation puzzle. Listening to speakers from policy, industry and civil society, it was clear that the hopes some steelmakers had previously placed in “mass balancing” were unlikely to be realised. Similarly, in a session forecasting future production trends, it was notable that predictions about the role of Carbon Capture, Usage and Storage (CCUS) continues to shrink as the costs, geographic limitations and technological challenges of the approach become clearer.
What has led to the changes of heart? Some of the answers could be found during sessions looking at climate litigation and consumer demand. As we made clear in our presentation to the event, across both industry and civil society, an emerging consensus exists that access to clear, comparable and robust emissions data will be essential to the creation of markets for lower emission steel products. Both ResponsibleSteel and the recently launched Low Emission Steel Standard were highlighted by speakers as routes towards a set of standards. A second session focused on climate litigation- both in relation to climate policy and greenwashing claims- hopefully served to highlight that the status quo has largely been inadequate for all parties involved.
Accountability needs to be at the heart of the debate
As one senior representative of an international organisation pointedly asked us during a coffee break, “Why do steelmakers guard their emissions data so closely – don’t they realise this ship has sailed?”. At SteelZero, the challenge of gathering accurate emissions data is something we have been closely working with our members on. The reality is that even for companies leading the efforts to create markets for lower emission steel, obtaining reliable data remains incredibly challenging. It was therefore encouraging to hear that others are also facing this challenge and that there is a growing recognition that change is needed sooner rather than later.
Whether driven by the threat of litigation, public pressure or simply ethical decision-making, it is increasingly clear that there isn’t a route to steel decarbonisation that doesn’t require both transparency and accountability. In a global market, the costs of the transition, the rewards at stake and the political pressures to act are far too great to ignore. Our experience working with SteelZero members shows that the demand is there and that if the claims can be backed up, the willingness to pay will follow.
However, John Lichtenstein’s presentation at World Steel Dynamics laid bare the staggering scale of the challenge. While he outlined a credible scenario for the steel industry to achieve the necessary emission reductions, the blunt truth is that a dramatic step change in the speed of the transition is needed if we are to get there.
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