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The Issue

The world needs steel. Steel is an essential engineering material for the global economy. It is a critical material used to manufacture our vehicles and machinery, construct our buildings and factories, produce our energy, and much more. Steel is also playing a central role in the transition to a greener economy with the production of electric vehicles, wind turbines, solar arrays, and other clean tech products.

Steel is fundamental for advancing a circular economy because its many different applications and components can efficiently be recycled, reused and remanufactured.

The world needs to lower its greenhouse gas (GHG) emissions. The GSCC is leading the charge to reduce GHG emissions and encourage investments in lower emissions technology as part of the global effort to decarbonize economies and societies. Steel producers around the world are at different stages in their efforts to reduce emissions and achieve sustainable production.

We already have the technology. Steelmakers have become more efficient and producing a tonne of steel today requires only 40% of the energy it did in 1960. Many steelmakers around the world have successfully converted steel production processes to maximize steel's circularity, resulting in lower carbon intensity products. This means that technologies already exist to cut global steelmaking emissions by over 70%. And new technologies are on the horizon that will reduce emissions even further.

We need a global standard.We need a global standard. Customers need to know the GHG emissions intensity of the steel they are purchasing to meet their company's ambitions related to decarbonization.

Numerous groups and companies — including the GSCC — are advocating for a global standard to measure and report carbon emissions from steel. Some steelmakers and organizations are advocating for a common standard that features a "ferrous scrap sliding scale" relative to use of scrap steel for setting carbon reduction trajectories.

This approach would set two disparate standards for emissions from steel producers — one standard for steel made from iron ore extractive production processes, and another for steel made from circular electric arc furnace (EAF) processes. This dual method is unacceptable when a common sector goal for the steel industry is sought to achieve the 1.5-degree Celsius (°C) objective by 2050.

Having a dual standard that allows higher-emission steelmakers to postpone changing their production process to readily available, less carbon intensive methods conflicts with the basic objective of 2050 goal setting. Higher-emitting steel producers use the dual standard to claim their steel products are "green" even if they are produced with significantly higher carbon emissions than those using the EAF process.

We must avoid a standard that enables greenwashing. Creating a standard based on a ferrous scrap sliding scale could result in higher emissions steel products to be labeled as "green" and prioritized at the expense of lower emissions steel products. This will discourage innovation and allow higher emissions steelmakers to postpone making changes in their production process. It will also lead to higher GHG emissions overall from the steel sector.

A truly effective lower-carbon steel standard must be one in which actual, attained carbon emissions are measured, and the standard must apply equally to all producers on a global basis.

We can accomplish this. The standard must lead to the global steel industry significantly reducing carbon emissions. This can be achieved by creating a science-based emissions standard based on actual emissions that would apply to all producers equally on a global basis. Establishing a standard should incentivize actions that will generate decreases in carbon emissions to achieve the 1.5°C science-based emissions target for the global steel sector.