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Guest Column

Published on: Oct. 24, 2021, 2:01 p.m.
Towards zero emission steel
  • In Ghent ArcelorMittal is planning to reduce emissions using both the CCUS and green-hydrogen-DRI routes

By Aditya Mittal. The author is Chief Executive Officer, ArcelorMittal

India’s steel manufacturing ambitions deserve fulfilment. Equity for emerging economies will occupy the UN COP26, which in November will try to negotiate stringent cuts in carbon emissions. Steel is a big emitter and, as the world’s largest producer, ArcelorMittal is committed to leading the science and engineering behind decarbonised steel. And as the most recent steel entrant in India, we also hope our global innovations will filter into our expanding manufacturing in that market.

COP26 is viewed as a generational opportunity to arrest the now daily evidence of the impact of climate change – in extreme floods and heatwaves – and hasten business and industry’s transition to net-zero. Something must come out of COP26; the cost of failure is too high.

Steel is high on everyone’s list of industries that must act because it emits 7 per cent of global carbon emissions. ArcelorMittal recognises the urgency with which we must apply science, technology and capital to decarbonise a material that is ubiquitous, recyclable and resilient (requiring more to be produced all the time), but relative to other materials still with a lower carbon footprint.

In July, ArcelorMittal announced a commitment to a reduction in carbon emission intensity of 25 per cent by 2030, and 35 per cent in Europe where we have a bigger manufacturing footprint. This collectively implies investments of about $10 billion. As a company, we absolutely need to be leading. We can do that because, among other things, we are global and have a mature infrastructure of R&D supported by a budget of $300 million a year. In practice, this means we have a deep reservoir of IP, technology and development to deploy for innovations in how to make steel.

Zero emission steel, if produced at scale, has the potential to become the backbone of our everyday urbanisation – the buildings we live in, the cars we drive and the bridges they cross, and the machinery and infrastructure that power our economies. Each of these has a consequential impact, helping companies, investors and governments meet their own net-zero commitments. 

We are following two principal technology pathways to achieve these outcomes: innovative direct reduced iron (DRI) and smart carbon. These routes involve the use of clean energy, such as green hydrogen and also bioenergy with carbon capture utilisation and storage. We would encourage all stakeholders – regulators and others – not to stick to one technology because directions can change. In the final analysis, cost will be the determinate. That is where policy support is so critical, to ensure the creation of a level playing field with appropriate support.

This year ArcelorMittal has announced investment plans in Belgium, Canada, France, Germany and Spain which will introduce technologies to produce a 15 million tonne cut in annual carbon emissions, equivalent to the greenhouse gas emissions from 3,300,000 cars driven for a year. These initiatives supplement other decarbonisation projects already underway, such as offering customers net-zero equivalent steel through an audited certification scheme, and the creation of an innovation fund from which we have made investments in companies developing breakthrough technologies to accelerate the transition to carbon neutral steelmaking.

  • We are following two principal technology pathways to achieve these outcomes: innovative direct reduced iron (DRI) and smart carbon. These routes involve the use of clean energy, such as green hydrogen and also bioenergy with carbon capture utilisation and storage

Our initial investments include a solar renewables venture, a low-cost energy storage business using battery technology and a $100 million equity investment in Breakthrough Energy Catalyst, a programme founded by Bill Gates to help scale the next generation of clean technologies. The confidence to make such investments stems from our enduring commitment to R&D, along with meaningful collaboration across the ecosystem, which means partnering with governments, innovating with customers and supporting the development of a low carbon energy supply chain.

My own travel across our business reveals a deep level of engagement among our workforce. On a recent visit to our plant in Ghent, Belgium, where we have a Euro 200 million investment, I met young engineers, not just metallurgical and structural but bioengineers working on converting CO2 into bioethanol. So now we have bioengineers in the steel process: that illustrates new skills and diversity of talent required to succeed. 

In Ghent we are planning to reduce emissions using both the CCUS and green-hydrogen-DRI routes.  Green hydrogen certainly offers considerable potential for the steel industry but significant effort and political will is required to ensure it is available at a competitive price within the next decade.  

I see a similar frontier innovation in India’s plans for lower-cost green hydrogen under a National Hydrogen  Mission, alongside encouraging progress to create 450GW of renewable energy capacity by 2030. India’s ability to make inroads with these programmes will be critical in building an industrial ecosystem that supports cleaner manufacturing, including in steel production.

India will continue to grow and require more steel, not less. The country’s likely rebalancing of its energy equation without sacrificing the promise of economic growth for its 1.4 billion people will, as I say, command the attention at COP26. This is where the developed world must step up, in honouring commitments to provide $100 billion to support innovation in climate technologies. For our part, we will continue to challenge ourselves to move further and faster and continue to decarbonise the primary means of manufacturing steel.

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