The Climate Group unites business giants in push for net-zero steel
Multiplex Construction Europe and Grosvenor Britain & Ireland are among the members of a new business-led initiative designed to drive the net-zero transition in the global steel sector.
Convened by The Climate Group, which is perhaps best-known for its RE100 and EV100 initiatives, the new scheme is called SteelZero and will represent businesses from all parts of the steel value chain.
By signing up to SteelZero, companies commit to procuring, specifying, stocking or producing 100% net-zero steel across all operations by 2050 at the latest.
Steel is a notoriously high-emission material and a hard-to-abate sector. More than 90% of metal produced in the world is steel, and the sector is accountable for around 7% of global emissions from fuel use. Researchers believe that a combination of electrification, energy storage, alternative fuels and circular economy innovations are needed to align the sector with net-zero. Carbon capture and offsetting are also being explored by some producers.
The Climate Group’s hope is that, by driving market demand for net-zero steel, strong signals will be sent to laggard companies. Policymakers and investors are also likely to take note, given the collective purchasing power and influence of the member companies. Given that steel demand is likely to grow by up to 40% by 2050, the hope is to decouple sector growth from emissions.
“We need to see much greater investment and progress to cutting emissions, but steelmakers also need to know their customers will buy new, cleaner products,” The Climate Group’s head of energy productivity initiatives Jenny Chu said.
“By harnessing the collective purchasing power and influence of major steel-using organisations, SteelZero will send a critical demand signal that can shift global markets and policies towards sustainable production and sourcing of steel.”
Founding member companies of SteelZero include BHC, Bourne Group, Grosvenor Britain & Ireland, Lendlease, Mace Group, Multiplex Construction Europe, WSP UK and Orsted. Many of these companies have their own net-zero targets for operational emissions and plans to tackle indirect (Scope 3) sources also.
Not-for-profit ResponsibleSteel will be supporting the initiative. The organisation is developing an independent certification standard for sustainable steel, which will cover social sustainability as well as climate impact.
A sector at risk
Net-zero policy frameworks aside, a report from CDP last summer revealed risks that go beyond the reputational for the steel sector.
The report warned that water scarcity, global warming and an increased carbon price will place more than 10% of the global steel sector's economic value at risk by 2030. Risk could crystallise in the form of stranded assets, physical damage and a loss of investor support, CDP warned.
In response to the issue, the likes of Tata Steel, ArcelorMittal, Baoshan Iron & Steel, Beijing Shougang , Inner Mongolia Baotou Steel and Liberty Steel have all begun upping their investment into low-carbon technologies. The latter has notably pledged to deliver carbon-neutral operations by 2030, through investments in energy efficiency, renewable energy, recycled materials and carbon capture and storage (CCS).