ArcelorMittal lays out its route to carbon-neutral steel

ArcelorMittal hopes combining ‘intermediate’ innovations and continuous decarbonisation gains will unlock a carbon-neutral steel future. By Jack Hunsley

The automotive industry is under huge pressure to decarbonise, and though electric vehicles are the most public-facing component in this mission, players are looking for sustainability gains throughout their supply chains.

One key area is steel production. Though a critical material for OEMs and suppliers, producing steel emits high levels of pollutants, accounting for roughly 8% of the world’s total CO2 emissions. It’s why those in the sector are eager to nudge steel towards a carbon-neutral future.

XCarb

Steel giant ArcelorMittal is one stakeholder eager to kickstart this transition, and in March 2021 unveiled its XCarb initiative to tackle the issue. As a new umbrella brand, XCarb combines all the different innovative steps the steel manufacturer will have to take to reach carbon-neutral steel production by 2050. “The XCarb umbrella brand stands for the breakthrough step reduction in decarbonisation in CO2 emissions that we want to generate,” said Jean-Martin Van der Hoeven, Chief Marketing Officer for Global Automotive and Mobility Solutions at ArcelorMittal.

XCarb has launched with three ‘labels’—the XCarb innovation fund, XCarb ‘recycled and renewably produced’ and XCarb green steel certificates—but more could be added down the line. ArcelorMittal hopes all three will play critical roles in decarbonisation. “XCarb demonstrates once again the important role that steel can and will play in the future,” said Van der Hoeven, underlining the value in recycling steel in particular. “That is a very positive thing for the circular economy. It’s clear that our customers cannot wait until 2050 for ArcelorMittal to come up with solutions.”

Megatrends Q3 - ArcelorMittal Walking Beam Furnace
Steel manufacturing currently accounts for around 8% of the world’s total CO2 emissions

Of the three labels, ‘recycled and renewably produced’ and the green steel certificate are the most pertinent for ArcelorMittal’s automotive customers, offering both immediate active and passive sustainability benefits. The former could have a significant impact in the emission output from electric arc furnaces (EAFs). As Van der Hoeven detailed, such a furnace could emit between 600kg and 900kg of CO2 per tonne of crude steel. Through a combination of 100% scrap and renewable steel that figure could be brought to under 300kg per tonne. “That’s a real step change,” he added.

Its green steel certificates, meanwhile, offer an “intermediate” solution, allowing ArcelorMittal’s customers to reduce the emissions associated with the steel used in their vehicles and components. “We do not have zero emission steel today, so we want to give them a solution to reduce their Scope 3 emissions for the steel that they are buying from ArcelorMittal,” said Van der Hoeven. “This is fully in line with the Greenhouse Gas Protocol. It is very important that we carry out this assurance process in a rigorous way. That’s why we also worked with a key auditor—Norway-based DNV—in designing these labels.”

XCarb is a brand that we are developing to provide solutions to our customers. What we have today in the pipeline is just the first step in that journey and it’s certainly not the final solution

Customers can purchase certificates generated through green steel production. These processes make use of substances such as bio-coal, which is made from waste wood, and bio-ethanol, created from captured carbon emitted during steel production. The CO2 savings from these projects are then accumulated and issued in the form of green steel certificates. “When a customer buys such a certificate they invest in CO2 saving projects,” said Van der Hoeven. “They own the CO2 saving that we have generated and as a result can report a saving in their accounting for Scope 3 emissions.”

ArcelorMittal has generated roughly 30,000 tonnes of green steel certificates from its 2020 operations, with 120,000 tonnes expected to become available this year. “In 2022 we will have two more projects coming on stream,” Van der Hoeven added. “We will reach a level of about 600,000 tonnes worth of green steel certificates and potentially more than a million tonnes by 2025.”

Interest already

ArcelorMittal’s timeline on XCarb has been rapid so far. The sustainable development team first sketched the initial two labels—its XCarb green steel certificates and XCarb ‘recycled and renewably produced’—in September 2020, with the steel giant having been “basically ready” to launch by February 2021. “We were very motivated personally to make this swift transition for our management,” said Van der Hoeven. “The target from the beginning was to be ready and on the market by end of February 2021. In fact, our commercial team was able to present the early idea to our customers in November 2020.”

ArcelorMittal’s green steel certificates help its customers reduce the emissions associated with the steel used in their vehicles and components

The early response to these ideas has been promising. “We have not been on the market very long with these certificates, but have already had a pretty good reaction,” said Van der Hoeven, referring to the green steel certificates in particular. “Now, the issue is about scaling up.”

ArcelorMittal hopes part of that scale-up process will be an XCarb launch in North America; currently XCarb is only available to its European customers due to differences in these markets’ steel sectors. For instance, the green steel certificates is a concept based on decarbonising blast furnaces, which are more common in Europe than in the US, Canada or Mexico. “It’s too early to speculate, but in North America you will see probably other XCarb labels,” said Van der Hoeven. ArcelorMittal’s North American customers may in the near term gain access to XCarb ‘recycled and renewably produced’. “We are investigating that label’s applicability,” he added. “But it’s not so evident that the solutions that we have in Europe can be transplanted to North America.”

Continuous gains

XCarb is not the ‘be-all-and-end-all’ for ArcelorMittal’s decarbonisation efforts, however. As Van der Hoeven described, the umbrella brand is reserved for the company’s “important breakthrough steps” in the sustainability space. It is still critical that continuous gains are made outside of the XCarb spotlight, with ArcelorMittal committed to achieving a 30% reduction in its CO2 emission by 2030 before becoming carbon-neutral by 2050.

It’s why the company has also established its XCarb innovation fund which will invest US$100m per year in innovative companies and technologies in the steel sector. It’s all part of a drive to bolster ArcelorMittal’s in-house expertise for its sustainability transition. “We have some of the best engineers and we can do many things in-house, but we need also other companies and partners to work with us,” said Van der Hoeven. “With this funding, companies can be proactive in the development of technologies which will support us on our journey.”

The news follows a stream of recently announced tie-ups. In January 2021, ArcelorMittal announced a partnership with Vow ASA to build a biogas production plant in Rodange, Luxembourg. The biogas will replace natural gas currently used in the Rodange plant’s rolling mill reheating furnace.

We do not have zero emission steel today, so we want to give them a solution to reduce their Scope 3 emissions for the steel that they are buying from ArcelorMittal

March 2021 saw two announcements: a partnership with Air Liquide aimed at decarbonising steel production in Dunkirk, and a widescale decarbonisation effort across ArcelorMittal’s Bremen and Eisenhuettenstadt operations in Germany. This will include building a new plant in Bremen to include direct reduction of iron ore (DRI) and EAF-based steel making as well as a DRI pilot plant and EAF in Eisenhuettenstadt. This would allow ArcelorMittal to take advantage of Germany’s planned hydrogen infrastructure installation. These plans will require an investment of at least €1bn (US$1.18bn) but using green hydrogen could save more than five million tonnes of CO2 emissions by 2030.

ArcelorMittal is also supporting the development of a Gigawatt-scale hydrogen electrolysis project in the Dutch-Belgian North Sea. Danish utility company Orsted’s SeaH2Land facility is aiming to have 1GW of hydrogen electrolyser capacity by 2030 as well as 2GW of offshore wind farm capacity to aid sustainable hydrogen product. The company hopes all these efforts and partnerships will aid it across the next decade and onto 2050.

“Between now and 2050 we have a long journey ahead of us, full of innovation and initiatives that we need to undertake to reach that goal,” said Van der Hoeven. “XCarb is a brand that we are developing to provide solutions to our customers. What we have today in the pipeline is just the first step in that journey and it’s certainly not the final solution.”

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