Imported file: 2020 10 30_ACT iron&steel - 2nd version of methodology for PC.docx.

Last updated 10:13am Nov 25

Attachments

or drag files here.

    Loading...

Instructions: Reviewing the ACT Iron & Steel  Methodology

If you want to provide comments – click on the new comment button located on the right side.

You will be asked to register by clicking on the yellow register button.  

If you are already registered on ScribeHub, please sign in (top right corner) before accessing the document and commenting.

Registering

If you are not already registered to ScribeHub, you will be asked to register on the platform - providing your email address, name and creating a password. You will then be sent a confirmation email.  Click on the Confirm my account link in the email and you will be redirected to the login screen for ScribeHub. Enter you email and password and you will then have access to the document.

Please note that your name and email address will be used by the ACT team to record the list of people providing comments during this public consultation. Remember the email and password you use to register as this information will always be required to log in to ScribeHub.

Commenting

Once on ScribeHub, please use the comment button 

cid:image005.png@01D5B010.D9D61930

beside each section header or questions to input your feedback. Pressing on the + sign will open a dialog box where you can input the title of your comment, the related section of the document, and your comment.  You can also attach documents to your comment and assign a label (e.g. editorial comment, technical comment, etc.). Keep in mind that comments are publicly visible.  You can also reply directly to a comment already posted.  

The methodology will be proofread before publication, so no need to flag minor editing issues.

Timeline 

Please provide your feedback by Monday November 30th, 2020.

Contact 

If you encounter any problems at all with the ScribeHub platform, or if you have any questions about the content of the document, please contact us via email:  Nikolaos Kordevas

 

You can also download the ACT Framework from the ACT website for more context.

Thank you!

Thank you once again for providing valuable feedback, we look forward to reviewing it.

 

 

 

Iron & steel sector methodology

(version 0.6 – October 2020)

Acknowledgments

ADEME and CDP warmly thank the members of the Technical Working Group for their inputs and feedbacks on the methodology (see list of members in annex).

Technical coordination:

Marlène DRESCH (ADEME)

Dua Zehra (CDP)

 
ACT co-founders:

 

 

 

 

supported by:  
   

Technical assistance provided by:

Guillaume Audard

Cécile Beaudard

Salomé LERUCH

Ali HAJJAR

Nikolaos KORDEVAS

Guillaume NEVEUX

 

 

 

 

© CDP Worldwide & ADEME 2020. Reproduction of all or part of work without licence of use permission of CDP Worldwide & ADEME is prohibited.

 

1. Introduction

The 2015 United Nations Climate Change Conference (COP21) in Paris entrenched the recognition to act on climate change with the political agreement to hold the increase in the global average temperature to ‘well under the 2°C’ above pre-industrial levels. The ‘Assessing low-Carbon Transition’ (ACT) Initiative measures how a company is ready to transition to a low-carbon economy. The ACT initiative aims at helping businesses to drive their climate strategy, their business model(s), their investments and operations and set targets compatible with a low-carbon pathway. The general approach of ACT is based on the Sectoral Decarbonization Approach (SDA) developed by the Science-Based Targets Initiative (SBTi) in order to compare a company’s alignment with a “low-carbon world” (compatible with 2°C - or beyond - climate change scenarios), the application of which is described in the ACT Framework (1). The ACT Iron and Steel methodology aligns with other reporting framework where applicable (e.g. CDP, TCFD, EU Taxonomy).

(1) ACT Initiative. ACT Framework, version 1.1. 2019.

Why do we need to develop a methodology for iron and steel sector?

The use of steel is associated with economic growth: when there are more buildings, more transport means, more boats, more industrial equipment... then more steel is used! China has known a quick growth of its steel production after 2000. During some years, that Chinese growth was higher than the yearly European production! This growth is associated with the global growth of China. As said by Worldsteel (based in Brussels), the “barycenter” of the steel production at world level would be somewhere in Asia, no longer in Brussels!

“The direct CO2 intensity of crude steel has been relatively constant (within a 20% range) during the past two decades, and in the last couple of years has returned to roughly the 2000-08 level. To align with the SDS, the CO2 intensity of crude steel needs to fall an average of 2.5% annually between 2018 and 2030. Achieving this reduction and maintaining it after 2030 will not be easy. [For primary production] energy efficiency improvements spurred much of the reduction in recent years, returning CO2 intensity to previous levels, but opportunities for further efficiency improvements will likely soon be exhausted. Thus, innovation in the upcoming decade will be crucial to commercialise new low-emissions process routes, including those integrating CCUS and hydrogen, to realise the long-term transformational change required. Governments can help by providing RD&D funding, creating a market for near-zero-emissions steel production, adopting mandatory CO2 emissions reduction policies, expanding international co-operation and developing supporting infrastructure.

In fact, steel recycling is done thanks to the use of EAF, and steel scraps are recovered from the growing dismantling of old building and infrastructures, old cars, old machineries and equipment… Nearly all End of Life (EoL) steel can be recycled. Nevertheless, the continuous increase of the steel consumption, associated with the growth at world level (China, India…), together with the relatively long lifespan of the steel products, makes that there is still a significant need for primary steel for the years to come. In parallel, some applications of steel (such as stamping) seems to request BF grade steel (quality issue).

“Secondary production should also be increased through more effective scrap collection and sorting. Stakeholders should work to increase scrap collection and recovery by improving recycling channels and sorting methods, and by better connecting participants along supply chains. The steel industry can also take advantage of opportunities for industrial symbiosis – including using the waste or by-products from one process to produce another product of value – to help close the material loop, reduce energy use and reduce emissions in the case of carbon capture and utilisation. Examples include using steel blast-furnace slag in cement production and carbon from steel waste gases to produce chemicals and fuels.”

All of these diverse views and levers of the iron and steel sector transition will be addressed by the ACT assessment methodology.

It is important to note that the choice of low-carbon scenario might differ between each ACT sectoral methodology, so it is not always possible to compare assessment results across sectors.

 

1.1 Introduction to Iron & Steel processes

Steel is a very versatile and adaptable material which is used for a wide range of applications, thanks to its strength and its properties of formability. Steel is an alloy made by combining iron with carbon and other chemical elements. Different grades of steel are produced, with different chemical composition and characteristic (material microstructure, surface conditions, corrosion resistance, etc.). Figure 1 gives an overview of the most common iron and steel making processes (not exhaustive):

 

Figure 1 : Overview of the steel making process (2)

(2) BCG. Steel's Contribution to a low-carbon Europe 2050. Technical and economic analysis of the sector's CO2 abatement potential. [Online] 2013. 

Several routes are currently used to produce steel:

  • The primary steel production process using a Blast Furnace and a Basic Oxygen Furnace (BF-BOF route) is the most common, well known and controlled route. According to the Worldsteel website, a total of 70.7% of steel is produced using the BF-BOF route:
    • First, iron ores are reduced to iron, also called hot metal (or pig iron in solidified state). This process takes place in a Blast Furnace (BF), using predominantly coke and coal as reducing agents. When elements are melted in the BF, impurities in the iron ores, coke and coal ashes are separated from the hot metal to form a liquid slag.
    • The iron is then converted to steel in the Basic Oxygen Furnace (BOF), also called a converter. There, Dioxygen (O2) is injected, to remove any remaining unwanted elements and as much of the residual carbon in order to convert the metal into steel of the required quality (the target carbon content depends on the steel grade, but must be below 2% to be considered steel). This reaction is exothermic (releasing energy), so coolants are required. Scrap is often used for this purpose, but sometimes cold pig iron or direct reduced iron (see below) can be added in the BOF. From Worldsteel sources, a BOF can be charged with up to 30% scrap.
    • After casting and rolling, the steel is delivered as coils, plates, sections or bars.
  • An alternative primary production route is the smelting reduction converter (SR-BOF) route:
    • The BF is replaced by a two stage process: first, iron ores are pre-reduced through the use of off-gasses from the melter-gasifier. Then, the pre-reduced iron ores are melted in the melter-gasifier, using coal as a reducing agent. Two main technologies exist for smelting reduction: Corex, where pellets and lump ores are pre-reduced in a shaft, and Finex, where fine ores are pre-reduced in a multistage fluidized bed reactor.
    • The hot metal produced by smelting reduction is then charged into a BOF and can follow the same steps as in the one coming from a Blast Furnace.
  • Steel can also be made in an Electric Arc Furnace (EAF). According to Worldsteel website, about 28.9% of steel is produced via an EAF. This includes different routes:
    • The most common route is scrap-EAF, for which steel scraps is used as input. Steel produced from steel scraps is called “secondary steel”. Ferrous scrap is melted by the energy supplied by an electric arc, often assisted by O2 injection, oxy-fuel burners, or both. Additives, such as alloys, are often used to adjust to the desired chemical composition. Producing steel from 100% scrap is possible, but additives can also be produced from ore.
    • EAF can also be charged with hot metal produced from iron ore, or with Direct reduced-iron (DRI) This DRI-EAF route represents only a small share of the steel produced currently, but this share is expected to grow in the future, as it does not require the use of coal or coke:
      • In the DRI process, iron ores remain solid through the entire process, rather than being melted as in the BF and SR. Oxygen contained in the ores is removed by a chemical reaction with the hot reducing gas (currently, mostly reformed natural gas, which is high in hydrogen (H2) and carbon monoxide (CO) content. The predominant technologies for direct reduction processes are Midrex and HYL.
      • The hot DRI can either be fed right to the EAF, or be compacted as hot briquetted iron (HBI), which allows better storage and transportation (DRI can be produced close to where the ores are produced, and then transported to another place for producing steel close to where it will be used, allowing to reduce the amount of material being transported compared to the traditional BF-BOF route which requires transporting a big amount of iron ore and coal).
      • The DRI or HBI is fed to an EAF, where it is melted into liquid steel. Unlike hot metal, DRI still contains residual O2 and other unwanted materials from the iron ores, that need to be eliminated in the steel-making stage.
  • Another steelmaking technology, the open-hearth furnace (OHF), makes up about 0.4% of global steel production. The OHF process is very energy intensive and is in decline owing to its environmental and economic disadvantages.

The iron & steel industry produces many by-products in addition to iron & steel products. Some of them can be used by other industrial sectors to help them to transition to a low-carbon economy. The most common ones are:

  • gases (mainly in coke ovens, Blast Furnaces and Basic Oxygen Furnaces), which can be burnt to generate heat or electricity, either directly on site or exported to a third party;
  • slag, which is commonly used as an alternative to clinker in cement production, and can also replace roadstone and fertilizer.

Not all steel production routes produce the same type and same amounts of those by-products.

This steel is then casted into semi-finished products such as blooms, billets or slabs, which can then be processed in a variety of finished products. A presentation of the different finished products is presented in annexes (Figure 31). For a more detailed technical analysis of the main processes in the iron and steel sector, a study from the EU-MERCI project presents in-depth each process. (3)

(3) EU-MERCI. European Methods and procedures based on Real Cases for the effective implementation of polilcies and measures supporting energy efficiency in the Industry. HORIZON 2020 Project Nr. 36.845. Deliverable 4.2 Technical analysis - Iron and Steel sector. [Online] 9 September 2017. 

Steel can be associated with other materials (concrete and stone, wood…) to form final products, such as buildings and other structures (bridges…), cars and other transports means (marine…), and industrial applications (machinery and equipment). Most of these products have a relatively long lifespan. Additionally, iron is one of the most common metal available in Earth crust.

The amount of CO2 associated with the BF route is linked with the reduction (see above) of iron ore, the pig iron treatment to produce steel in the BOF (Basic Oxygen Furnace) and with energy used in all the process stages itself. The scrap-EAF route does not need to reduce iron ore, therefore this route emits less CO2. Moreover, the energy used in the EAF route is mainly electricity, which might have, in some countries (such as France), a lower amount of CO2 for its production, as compared to the use of fossil fuels, to get the same amount of final energy.

Once produced, steel can be used again and again. With a global recovery rate of more than 70%, steel is the most recycled material on the planet. What’s more, 97% of by-products from steel manufacturing can also be reused. For example, slag from steel plants is often used to make concrete. (4)

(4) World Steel Association. The White book of Steel. [Online] 2012. 

 

1.2 GHG Emissions in the iron and steel sector

 

1.2.1 Comparison of production routes

 

1.2.1.1 Comparison of liquid steel carbon footprint

The 4 main production routes for iron & steel products have been presented in §1.1 . Each of these production routes is actually regrouping several types of processes. For instance, Corex and Finex are two different processes in the smelting reduction family, sometimes called SR-BOF route. Direct iron reduction can be done through a wide range of processes, the most common currently being Midrex (about 60% of the global DRI production (5) ) and Finored, which both use natural gas as reducing agent.

(5) Primetals technologies. The winding road toward zero-carbon iron. [Online] January 2020. 

Rammer et al. have compared 7 production routes in a study (6), which was presented at the European Coke and Ironmaking Congress (7). Those routes are presented in Figure 2:

(6) Comparing the CO 2 Emissions of Different Steelmaking Routes. RAMMER, Barbara, MILLNER, Robert et BOEHM, Christian. 7–13, s.l. : BHM Berg- und Hüttenmännische Monatshefte, 2017, Vol. 162.

(7) RAMMER, Barbara, MILLNER, Robert and BOEHM, Christian. Comparing the CO2 Emissions of Different Ironmaking Routes. [Online] 13 September 2016. 

 

Figure 2: Presentation of the 7 production routes compared (7)

 

All those processes are not directly comparable, as they generate different types and quantities of by-products (off gases gas, which is generally burnt to produce electricity, slag which is generally recovered to produce cement). Comparing these production routes requires an allocation procedure. This is generally done by giving a carbon credit for producing those by-products, based on the carbon footprint of products which can be replaced by them: slags can replace clinker, electricity from off gases burning can replace network electricity. The consideration of these credits is inevitable for the description a realistic process scenario, since no blast furnace, COREX, or FINEX plant can economically operate without further utilization of its off gas, and no COREX or FINEX plant will be built without appropriate gas utilization (6).

Therefore, when the carbon footprint of electricity decreases, the value of the credit for generating blast furnace gas will decrease as well, making the carbon footprint of iron produced through the BF-BOF route increase. For this reason, Rammer et al. calculated the carbon footprint of each route using a range of emissions factor for electricity, as presented in Figure 3.

 

Figure 3: Comparison of CO2 emissions of liquid steel production routes (7)

 

According to Figure 3 steel produced from smelting reduction (COREX – BOF and FINEX-BOF) have higher direct emissions than with the BF-BOF route, but generate more by-products, especially off gases. When those gases are burnt in a combined cycle power plant (efficiency of 45%), in a country with carbon intense electricity (e.g. China or India), the carbon footprint of steel produced by SR-BOF can be equivalent or lower than the one from BF-BOF route. Smelting reduction can be a short-term solution for replacing a blast furnace, but it cannot be considered as a low-carbon technology.

The two DRI-EAF routes that are compared both have significantly better carbon footprint than the BF-BOF route, but only with a low-carbon electricity mix. For instance, the DRI-EAF route would have higher emissions than the BF-BOF route if it was developed in India today. Nevertheless, if electricity generation is decarbonised, the Midrex-EAF and Finored-EAF routes can lead to a significant decrease in carbon emissions. But Rammel et al. explain that these processes can only be deployed if sufficient amounts of natural gas are available (at reasonable cost).

Other processes are currently being researched for Direct Iron Reduction, which could lead to further improvements in carbon performance.

 

1.2.1.2 Contribution of processes for hot metal from blast furnace

The BF-BOF route requires the production of coke and sinter, which is responsible for carbon emissions. For this route, some more accurate data on the contribution of each process to the carbon footprint of steel is available. Figure 4 presents the contribution to the hot metal carbon footprint, produced in a blast furnace from sinter, coke and pellet. This has been calculated from the data for the average global pig iron production available in the ecoinvent database.

Figure 4 : Contribution To the pig iron (Hot metal) carbon footprint (ecoinvent 3.6 cutoff database)

 

Direct emissions at the blast furnace represent about half of the cradle-to-gate emissions for pig iron production. If coke and sinter are also produced in the same plant, Scope 1 emissions from the plant represent about 70% of the total emissions (1,14 kg CO2 / kg pig iron). The rest of the emissions comes from the production and preparation of other materials (mainly iron ore and pellet, hard coal and quicklime).

 

1.2.1.3 Contribution of processes for other production routes

For the other production routes, no data could be found on the individual contribution of each phase. Most of those other processes are highly integrated, one process generating hot gas which is used to preheat another process downstream. Therefore, carbon performance should rather be considered at the plant scale, and not at the scale of an individual process.

 

1.2.2 Comparison of iron and steel products

The iron and steel sector produces a wide range of products, through various industrial processes. Therefore, the carbon footprint of products can vary a lot depending on the type of steel and its grade. In this section, we have analysed the carbon footprint of several steel products available in the ecoinvent 3.6 database (cutoff system model).

 

1.2.2.1 Steel making in basic-oxydation furnace (BOF)

Figure 5 presents the carbon footprint of the main products from the BF/BOF route. This figure shows that there is a high variability in the carbon footprint depending on the type of steel produced. Three products, produced in a BOF (also called a converter) are compared, considering European average data as provided by the ecoinvent database:

  • Unalloyed steel (or plain / non-alloy steel)
  • Low-alloyed steel
  • Chromium steel (18% chromium, 8% nickel)1

[1] According to Worldsteel, there are currently very few chromium steel producers in the world that use the BF/BOF route and none in Europe.

Figure 5: Carbon footprint of the main steel products produced from the BF/BOF route (ecoinvent 3.6 cutoff database)

 

The production of alloyed steel requires the use of alloying elements such as ferrosilicon, ferronickel, ferrochromium to reach the desired composition. The production of these alloying elements can be very carbon intensive. Stainless steel in particular requires the use of ferronickel and ferrochromium. The most common stainless steel is chromium steel 18/8 (18% chromium, 8% nickel), which gives a carbon footprint more than 2.5 times the one of unalloyed steel. However, different steels are used for different applications, and better technical characteristics can result in a lower use of material for a given application (for instance, a higher mechanical resistance can result in lower mass, resistance to corrosion might lead to longer lifetime, antibacterial stainless steel might need lower use of coating or cleaning agents, etc…).

Direct emissions at the BOF correspond to about 0,1 kg CO2 / kg, which is quite low.

 

1.2.2.2 Steel making in electric arc furnace (EAF)

Figure 6 presents the carbon footprint of the main products produced from the EAF route. Three products are compared, considering European average data:

  • Cast iron, produced by remelting pig iron in an EAF
  • Chromium steel, produced from steel scrap, ferronickel and ferrochromium, melted in an EAF
  • Low-alloyed steel, produced from steel scrap in an EAF.
Figure 6: CARBON FOOTPRINT OF THE MAIN STEEL PRODUCTS PRODUCED FROM THE EAF ROUTE (ECOINVENT 3.6 CUTOFF DATABASE)

 

Again, depending on the product, the carbon footprint is very different. Direct emissions and emissions related to the production of electricity consumed by the EAF represent only a small share of the total (about 0.2 kg CO2 eq./kg). Most of the emissions occurs during upstream activities : production of pig iron, and production of other alloying elements (ferronickel, ferrochromium).

The ecoinvent data does not provide any data regarding the production of primary steel from the DRI + EAF route, as it has currently a very low market share.

 

2 Principles

The selection of principles to be used for the methodology development and implementation are explained in the general ACT Framework Table 1 recaps the principles that were adhered to when developing the methodology.

Table 1: PRINCIPLES FOR IMPLEMENTATION

RELEVANCE - Select the most relevant information (core business and stakeholders) to assess low-carbon transition.
VERIFIABILITY - The data required for the assessment shall be verified or verifiable.
CONSERVATIVENESS - Whenever the use of assumptions is required, the assumption shall be on the side of achieving a 2° maximum global warming.
CONSISTENCY - Whenever time series data is used, it should be comparable over time.
LONG-TERM ORIENTATION - Enables the evaluation of the long-term performance of a company while simultaneously providing insights into short- and medium-term outcomes in alignment with the long-term.

 

3 Scope

 

3.1 Scope of the document

This document presents the ACT assessment methodology for the iron and steel (IS) sector. It includes the rationales, definitions, indicators and guidance for the sector-specific aspects of performance, narrative and trend scorings. It was developed in compliance with the ACT Guidelines for the development of sector methodologies (8), which describe the governance and process of this development, as well as the required content for such documents. It is intended to be used in conjunction with the ACT Framework, which describes the aspects of the methodology that are not sector specific.

(8) ACT Initiative. Guidance for ACT sectoral methodologies development, version 1.0. 2019.

 

3.2 Scope of the sector

 

3.2.1 Iron & Steel sector value chain

 

The Iron & steel value chain can divide into five main steps:

  • Iron ore mining;
  • Iron making;
  • Steel making and casting;
  • Steel product shaping;
  • Finished product manufacturing.

The main processes involved in these activities are presented in Figure 7.

 

Figure 7 : Iron and steel value chain

 

3.2.2 Activities covered by the scope of the ACT iron & steel methodology

The scope of the ACT iron & steel methodology covers the activities of steel making, casting and product shaping. Any company operating facilities related to these activities can be assessed. In practice, many companies are also performing iron reduction through Blast Furnace reduction, smelting reduction or direct reduced iron. This section refers to the NACE rev 2 statistical classification of economic activities in the European Community.

The activities of the Iron & steel making and casting segment included in the ACT scope are the following:

  • Manufacture of basic iron and steel [NACE – 24.10, partly]
  • Casting of iron [NACE – 24.51]
  • Casting of steel [NACE – 24.52]

NACE code 24.10 covers both Iron reduction and steel making. Not all companies classified under this NACE code are covered by the scope. The activities corresponding to the production of products classified under the category “Basic iron and steel and ferro-alloys” [CPA 24.10] in the CPA classification version 2.1 (44), or under “Primary materials of the iron and steel industry” [CPC 4111] of the CPC version 2.1 (44) are excluded from the scope. 

(44) ISO/DIS 14404-4 : Calculation method of carbon dioxide emission intensity from iron and steel production — Part 4: Guidance for using ISO 14404 family. [Online] 2020. 

They are the following:

  • Pig iron and spiegeleisen in pigs, blocks or other primary forms [CPA 24.10.11] [CPC 41111]
  • Ferro-alloys [CPA 24.10.12]
    • Ferro-manganese [CPC 41112]
    • Ferro-chromium [CPC 41113]
    • Ferro-nickel [CPC 41114]
    • Other ferro-alloys [CPC 41115]
  • Ferrous products obtained by direct reduction of iron ore and other spongy ferrous products, in lumps, pellets or similar forms; iron having a minimum purity by weight of 99,94%, in lumps, pellets or similar forms [CPA 24.10.13] [CPC 41116]
  • Granules and powders, of pig iron and spiegeleisen, or steel [CPA 24.10.14] [CPC 41117]

 

Table 2: Activities of the iron & steel making and casting segment included in or excluded from the scope

NACE Rev 2 code Description of the category Activities included in the NACE category included in the scope  Activities included in the NACE category excluded from the scope 
24.10 Manufacture of basic iron and steel and of ferro-alloys
  • operation of blast furnaces, steel converters, rolling and finishing mills
  • remelting of scrap ingots of iron or steel
  • production of steel in ingots or other primary forms
  • production of semi-finished products of steel
  • manufacture of hot-rolled and cold-rolled flat-rolled products of steel
  • manufacture of hot-rolled bars and rods of steel
  • manufacture of hot-rolled open sections of steel
  • production of ferro-alloys
  • production of pig iron and spiegeleisen in pigs, blocks or other primary forms
  • production of ferrous products by direct reduction of iron and other spongy ferrous products
  • production of iron of exceptional purity by electrolysis or other chemical processes
  • production of granular iron and iron powder
24.51 Casting of iron
  • casting of semi-finished iron products
  • casting of grey iron castings
  • casting of spheroidal graphite iron castings
  • casting of malleable cast-iron products
  • manufacture of tubes, pipes and hollow profiles and of tube or pipe fittings of cast-iron
None
24.52 Casting of steel
  • casting of semi-finished steel products
  • casting of steel castings
  • manufacture of seamless tubes and pipes of steel by centrifugal casting
  • manufacture of tube or pipe fittings of cast-steel
None

The activities of the Iron & steel product shaping segment included in the ACT scope are the following:

  • Manufacture of tubes, pipes, hollow profiles and related fittings, of steel [NACE – 24.20] ;
  • Cold drawing of bars [NACE – 24.31] ;
  • Cold rolling of narrow strip [NACE – 24.32] ;
  • Cold forming or folding [NACE – 24.33] ;
  • Cold drawing of wire [NACE – 24.34] ;

The following activities, which are related to the iron & steel value chain, are not included in the scope of the ACT methodology for this sector:

  • Mining of iron ores [NACE – 07.1] ;
  • Mining of other non-ferrous metal ores [NACE – 07.29] ;
  • Manufacture of coke ovens products [NACE – 19.10] ;
  • roasting of iron pyrites [NACE – 20.13] ;
  • Manufacture of fabricated metal products, except machinery and equipment [NACE – 25] ;
  • Manufacture of machinery and equipment [NACE – 28] ;
  • Manufacture of motor vehicles, trailers and semi-trailers [NACE – 29] ;
  • Manufacture of other transport equipment [NACE – 30] ;
  • Recovery of sorted materials [NACE – 38.32] ;
  • Wholesale of metals and metal ores [NACE – 46.72].

Table 3: Activities of the iron & steel product shaping segment included in or excluded from the scope

NACE Rev 2 code Description of the category Activities included in the NACE category included in the scope Activities included in the NACE category excluded from the scope 
07.1 Mining of iron ores  

mining of ores valued chiefly for iron content

beneficiation and agglomeration of iron ores

07.29 Mining of other non-ferrous metal ores  

mining and preparation of ores chiefly valued for non-ferrous metal content:

aluminium (bauxite), copper, lead, zinc, tin, manganese, chrome, nickel, cobalt, molybdenum, tantalum, vanadium etc.

precious metals: gold, silver, platinum

19.10 Manufacture of coke ovens products  

operation of coke ovens

production of coke and semi-coke

production of pitch and pitch coke

production of coke oven gas

production of crude coal and lignite tars

agglomeration of coke

20.13 Roasting of iron pyrites   manufacture of chemicals using basic processes. The output of these processes are usually separate chemical elements or separate chemically defined compounds.
24.20 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel

manufacture of seamless tubes and pipes of circular or non-circular cross section and of blanks of circular cross section, for further processing, by hot rolling, hot extrusion or by other hot processes of an intermediate product which can be a bar or a billet obtained by hot rolling or continuous casting

manufacture of precision and non-precision seamless tubes and pipes from hot rolled or hot extruded blanks by further processing, by cold-drawing or cold-rolling of tubes and pipes of circular cross section and by cold drawing only for tubes and pipes of non-circular cross section and hollow profiles

manufacture of welded tubes and pipes of an external diameter exceeding 406.4 mm, old formed from hot rolled flat products and longitudinally or spirally welded

manufacture of welded tubes and pipes of an external diameter of 406.4 mm or less of circular cross section by continuous cold or hot forming of hot or cold rolled flat products and longitudinally or spirally welded and of non-circular cross section by hot or cold forming into shape from hot or cold rolled strip longitudinally welded

manufacture of welded precision tubes and pipes of an external diameter of 406.4 mm or less by hot or cold forming of hot or cold rolled strip and longitudinally welded delivered as welded or further processed, by cold drawing or cold rolling or cold formed into shape for tube and pipe of non-circular cross section

manufacture of flat flanges and flanges with forged collars by processing of hot rolled flat products of steel

manufacture of butt-welding fittings, such as elbows and reductions, by forging of hot rolled seamless tubes of steel

threaded and other tube or pipe fittings of steel

 
24.31 Cold drawing of bars manufacture of steel bars and solid sections of steel by cold drawing, grinding or turning  
24.32 Cold rolling of narrow strip manufacture of coated or uncoated flat rolled steel products in coils or in straight lengths of a width less than 600 mm by cold re-rolling of hot-rolled flat products or of steel rod  
24.33 Cold forming or folding

manufacture of open sections by progressive cold forming on a roll mill or folding on a press of flat rolled products of steel

manufacture of cold-formed or cold-folded, ribbed sheets and sandwich panels

 
24.34 Cold drawing of wire manufacture of drawn steel wire, by cold drawing of steel wire rod  
25 Manufacture of fabricated metal products, except machinery and equipment  

This division includes the manufacture of “pure” metal products (such as parts, containers and structures), usually with a

static, immovable function, as opposed to the following divisions 26-30, which cover the manufacture of combinations or assemblies of such metal products (sometimes with other materials) into more complex units that, unless they are purely electrical, electronic or optical, work with moving parts.

The manufacture of weapons and ammunition is also included in this division.

28 Manufacture of machinery and equipment  

This division includes the manufacture of machinery and equipment that act independently on materials either mechanically or thermally or perform operations on materials (such as handling, spraying, weighing or packing), including their mechanical components that produce and apply force, and any specially manufactured primary parts. This includes the manufacture of fixed and mobile or hand-held devices, regardless of whether they are designed for industrial, building and civil engineering, agricultural or home use. The manufacture of special equipment for passenger or freight transport within demarcated premises also belongs within this division.

This division distinguishes between the manufacture of special-purpose machinery, i.e. machinery for exclusive use in a

NACE industry or a small cluster of NACE industries, and general-purpose machinery, i.e. machinery that is being used in a wide range of NACE industries.

This division also includes the manufacture of other special-purpose machinery, not covered elsewhere in the classification,

whether or not used in a manufacturing process, such as fairground amusement equipment, automatic bowling alley equipment, etc.

29 Manufacture of motor vehicles, trailers and semi-trailers   manufacture of motor vehicles for transporting passengers or freight. The manufacture of various parts and accessories, as well as the manufacture of trailers and semi-trailers, is included here.
30 Manufacture of other transport equipment   This group includes the building of ships, boats and other floating structures for transportation and other commercial purposes, as well as for sports and recreational purposes.
38.32 Recovery of sorted materials  

processing of metal and non-metal waste and scrap and other articles into secondary raw materials, usually involving a mechanical or chemical transformation process.

Also included is the recovery of materials from waste streams in the form of (1) separating and sorting recoverable materials from non-hazardous waste streams (i.e. garbage) or (2) the separating and sorting of commingled recoverable materials, such as paper, plastics, used beverage cans and metals, into distinct categories.

Examples of the mechanical or chemical transformation processes are presented in the NACE Rev 2 document.

46.72 Wholesale of metals and metal ores  

wholesale of ferrous and non-ferrous metal ores

wholesale of ferrous and non-ferrous metals in primary forms

wholesale of ferrous and non-ferrous semi-finished metal products n.e.c.

wholesale of gold and other precious metals

 

3.2.2.1. Rationale for scope of activities

The scope is defined to focus on companies which have the most efficient levers to reduce the emissions of the iron and steel sector:

  • Iron mining is excluded from the scope as the contribution of this activity in the carbon footprint of steel products is low (lower than 8% of pig iron carbon footprint).
  • Ferro-alloys production is excluded from the scope, as the processes which are involved in these activities are different from the steel making ones. Ferro-alloys production can be responsible for a significant share of the carbon footprint of high alloy steel (e.g. stainless steel). However, these emissions are included in the scope 3 upstream emissions of steel making companies. ACT can evaluate how steel making companies are working with their ferroalloy suppliers to improve their carbon performance.
  • Companies which are producing primary inputs for an iron reduction process or steel making process (e.g. coke producers, lime producers, CDRI or HBI producers, scrap metal massification actors), without making steel themselves, are excluded from the scope, as they are considered suppliers of steel making companies.

 

3.2.3 Scope of the actors

The ACT methodology relies on the principle of relevance and therefore only the companies that have both significant climate impact and significant mitigation levers can be covered by the ACT methodology.

The companies that are covered by the ACT Iron & Steel methodology are the following:

  1. Integrated steel mills (including iron ore mining or not),
  2. Cast iron producers,
  3. Stainless steel producers,
  4. EAF mills
  5. Re-rollers

Since their activities are excluded from the ACT scope of activities, iron ore miners, iron and steel services providers (who are designing plants, providing engineering and/or maintenance services), as well as steel product traders (importers, exporters) cannot be evaluated using the present methodology.

Companies who are active only in primary materials production for the iron and steel sector, without being active in other parts of the value chain will also not be covered by the methodology. This includes ferro-alloy producers, lime and coke producers, CDRI / HBI producers as well as iron granules and powders producers.

 

Figure 8: Companies that can be assessed by the ACT Iron & steel methodology

 

Legend:

Can be assessed by the ACT methodology
Cannot be assessed by the ACT methodology
Integrated company or active only on downstream activities

 

Depending on the activities they are involved with, iron & steel companies within the scope have different levers of action to reduce carbon emissions of the sector. Therefore, the assessment is adapted to three types of companies:

  • Integrated steel making companies, which are active on both steel making and product shaping activities.
  • Steel making only companies, which operate up to steel casting. This includes cast iron producers as well.
  • Steel product shaping only companies, which purchase crude steel to process it into a finished steel product which is then sold to product manufacturers.

 

 

4  Boundaries

Based on the principle of relevance and to facilitate the data collection on the companies’ side, ACT methodology focuses on the main sources of GHG emissions throughout the value chain.

 

4.1 Reporting boundaries

The main source of GHG emissions of steel products depends on the type of alloy produced, and of the production route (BF-BOF, scrap-EAF, SR-BOF, DRI-EAF). Most emissions of the BF-BOF route occur in the processes for iron making and producing the required input material (blast furnace, coke oven, sinter plant).

The boundaries of the ACT methodology for the iron and steel sector include all direct and energy related emissions of the main production steps:

  • Steel making and casting
  • Iron making
  • Preparation of iron ore before iron reduction
  • Production of the reducing agent (coke, or alternative reducing agent)
  • Production of steel alloying elements
  • Production of heat and electricity from gases generated during steel production
  • Steel product shaping, including hot rolling, flat-rolled products mechanical treatments and any other process that are performed to prepare steel products before selling them to product manufacturers.

The main processes included in those activities are presented in Figure 9.

 

Figure 9: Boundaries for the Iron & steel sector

 

Significant emissions reduction of the iron & steel value chain can also be obtained by improving the material efficiency of steel (e.g. using less steel for the same application) and steel circularity (reusing existing steel products, recycling more end-of-life steel products). How iron & steel companies act on these levers is also part of the boundaries of the assessment.

Because of the key role of the iron and steel sector (I&S or IS) in the climate transition, it has been proposed to differentiate all GHG sources in the reporting boundaries, from scope 1 to scope 3 upstream:

Scope 1 and 2 GHG emissions are relevant at every step of the value chain, and are under the control of the I&S company, they referred to direct emissions from the activities of an I&S company and indirect emissions from electricity, heat or steam purchased and used by an I&S company

Scope 3 upstream GHG emissions are key for downstream activities, in order to integrate efforts of companies to source low carbon products.

For integrated companies, as for iron and steel makers companies “inclusive scope 1+2” emissions refer to scope 1+2 emissions of crude steel production, as well as the scope 3 emissions relative to raw material preparation and iron making production (steel input production).

 

4.4.1 Rationale for boundary settings

The most significant emissions for the iron & steel sector occur during the steps of iron reduction and steel making. However, there are currently many different production routes. Several technologies for iron reduction are currently in development with the consequence of transferring carbon emissions at other steps in the value chain. Therefore, it is impossible to create an exhaustive list of all processes that should be included in the boundaries. Future evolutions in the iron & steel sector will tend to displace carbon emissions from the direct emissions at the iron reduction and steel making activities to electricity generation and reducing agent production. It is therefore important to include those emissions in the boundaries even if they do not represent a big share of the emissions for some companies today.

Ferro-alloy production can also be a significant source of emissions for high alloy products. As stainless steel producers are within the scope of the activities, this activities must be included in the boundaries.

 

 

5 Construction of the data infrastructure

Indicators are built according to the bibliographical work and the other sectors indicators development. Weighting for modules is proposed in accordance to the ACT Guidelines (8).

(8) ACT Initiative. Guidance for ACT sectoral methodologies development, version 1.0. 2019.

 

5.1 Data sources

In order to carry out a company level assessment, many data points need to be gathered by sourcing from various locations. Principally, ACT relies on the voluntary provision of data by the participating companies. Besides, external data sources are consulted where this would streamline the process, ensure fairness, and provide additional value for checking, validation and preparation of the assessment narrative.

The ACT assessment uses the following data sources:

Table 4: ACT ASSESSMENT DATA SOURCES

Data source Main use
Company data request and CSR reports Primary data source for most indicators.
Contextual and financial information database sources (E.g. Online and press news, RepRisk, investors report…) Contextual and financial information on company and events related to the company that could impact the ACT assessment
IPCC WG3 Assessment

Emissions factors and related figures (“Mitigation of climate change” IPCC, Contrib. Work. Group III Fifth Assess. Rep. Intergov. Panel Clim. Change, 2014)

Technology level data ("Climate Change", IPCC, 2014)

Asset activity database: GlobalData asset database. Available at: https://www.globaldata.com  Additional information used to fill the gaps of company reporting on assets.

Environmental declarations on steel based on ISO 14040&44, ISO 14025 and EN 15804

Worldsteel LCI based data

Information about life cycle assessment of product produces by the company (traditional product or low-carbon product).
Roadmap and business models Give an overview of the strategy of the company and the targets
CDP questionnaire (where cited in this document, the questions refer to the 2020 question numbers) Data regarding company emissions, targets, management, business model…

Where indicators refer to third party data sources as the default option, reporting companies may provide their own data to replace it if they can provide a justification for doing so, and information about its verification status, any assumptions used and the calculation methodology.

 

5.2 Company data request

The data request will be presented to companies in a comprehensive data collection format.

The CDP questionnaire can be a source of information for data collection. The ACT data collection form will highlight correspondence between requested data in the ACT iron and steel methodology and the 2020 version of the CDP questionnaire. All data would be collected by the analyst or the company.

Each data required is listed by IS followed by a number (e.g. IS 1).

 

5.3 Performance indicators

The performance indicators have been conceived following the main principles described in Chapter 2.

The section below presents a key specific ACT iron & steel metric (Accounted processing emission intensity of crude steel) as well as the overview of the Key Performance Indicators used in the ACT Iron & steel methodology.

 

5.3.1 Choice of carbon intensity metric

The ACT indicators are based on comparison against a benchmark:

  • For quantitative indicators in Modules 1 and 2, a company benchmark, derived from a sectoral benchmark, is used for defining a reference pathway for the company in terms of carbon emission intensity.
  • For iron & steel sector, the IEA provides pathways for crude steel carbon intensity (both direct carbon emissions from the iron & steel sector as well as its electricity consumption).
  • To be able to compare crude steel carbon intensity of a company to its company benchmark, consistency is required between emission intensity calculation at company level and the benchmark against which it is compared.

To define how crude steel carbon intensity can be evaluated, several existing standards have been studied (a more detailed description is provided in annex):

  • The EU Emissions Trading System (ETS)
  • EN 19694-2:2016 standard (Stationary source emissions - Greenhouse Gas (GHG) emissions in energy-intensive industries - Part 2: Iron and steel industry)
  • ISO 14404 family
  • the “CO2 Emissions Data Collection User Guide” (18) established by the World Steel Association.

(18)  IIGCC. Investor Expectations of Companies in the Construction Materials Sector. 2019.

Most standards allow to assess carbon emission intensity including both direct and indirect emissions. While we agree that including indirect emissions would be a better way to assess the carbon intensity of iron & steel facilities, the computation of a benchmark including those indirect emissions is not currently feasible. To be able to compute such standard, several missing data would be required:

  • The amount of each products produced by other sectors and consumed by the iron and steel sector, in order to produce the amount of crude steel considered in the IEA pathway. This level of information is not available in the public reports.
  • The emission factor to be associated with each material. Default emissions factors representative of the current context could be used. However, the emission intensity for producing these upstream products is also expected to decrease. To be able to compute a pathway for steel including Scope 3 upstream, we would therefore need to have a Scope 1+2 pathway for the production of each upstream product, which is not possible.

The EN 19694-2 standard permits the calculation of an indicator for assessing the carbon performance of a process, called “accounted processing CO2 intensity”. It is then possible to assess the performance of a facility by “rolling up” this assessment (according to the standard specific vocabulary) at facility and company levels. The result provides an assessment of the company carbon emissions including its direct emissions (scope 1) and energy related emissions (scope 2), minus emissions offloaded to steel by-products (exported gas, slags, etc.). It is then possible to compute benchmarks for this intensity metric using IEA pathways as a basis. Therefore, the specific ACT iron & steel metric which is presented in § 5.3.2 is based on this EN 19694-2 indicator.

The EN 19694-2 standard offers some flexibility regarding some key aspects:

  • Electricity emission factor: either a world average emission factor or a country specific one can be used. For the ACT intensity metric, the emission factor for electricity shall be supplier specific. If no data is available on the supplier specific emission factor, a country specific emission factor can be used.
  • Credit for slag production: for the ACT intensity metric, no credit for slag production will be used in the calculation. This choice has been made for consistency with the way the benchmark is computed.

 

5.3.2 Calculation of Accounted processing emission intensity of crude steel

The following chapter are extracted from the standard, please refer to it for full explanation for context, definition and normative reference and other calculation formula.

Please find the calculation formula (in green) according to what is gathered from EN 19694-2.

Accounted processing emission intensity of crude steel is calculated using the following formula:

 

This carbon intensity metric is used in different performance indicators of the methodology:

Number Indicator
IS 1.1 Alignment of inclusive Scope 1+2 emissions reduction targets
IS 2.1 Trend in past emission intensity of all crude steel production assets
IS 2.2 Trend in past emissions intensity of assets, per type
IS 2.3 Locked-in emissions of all crude steel production assets
IS 2.4 Trend in future emissions intensity of all crude steel production assets
IS 2.5 Trend in future emissions intensity of assets, per type
IS 4.1 Trend in past emission intensity of purchased crude steel production assets

 

“Roll up accounted processing CO2 emissions at company level” is calculated using EN 19694-2 (not published yet). This is a 7 steps calculation:

  • Step 1: Calculate net use of all streams of each process in the boundaries of the plant:

 

 

 

The term “stream” refers to a stream of material or energy.

  • Step 2: Determine the direct carbon content of each stream:

 

 

  • Step 3: Calculate direct emissions of each process in the boundaries of the plant:

 

 

  • Step 4: Calculate accounted direct emissions of each process in the boundaries of the plant:

This 4th step consists of calculating the accounted direct emission for the use or generation of by-product gas. If a process is burning by-product gas (NetUse > 0), the associated emissions are removed and equivalent emissions to burning natural gas instead are added. If a process is generating any by-product gas (NetUse < 0), a credit is awarded, assuming that the gas will be used in substitution of natural gas.

 

 

EFNG is the emission factor of natural gas

  • Step 5: Calculated total accounted emissions of each process in the boundaries of the plant:

 

 

Where IEeqi is the indirect emission equivalent of stream i. They can be found in the literature or determined from actual operational results. Default values provided by the EN 19694-2 standard are proposed in the following table:

 

 

 

 

  • Step 6: Calculate accounted processing emissions of each process in the boundaries of the plant:

 

 

  • Step 7: Roll up at facility level

 

 

The roll up shall include different processes depending on the type of actor:

  • For integrated actors, the roll up shall include all processes involved in steel input material preparation, iron reduction, steel making and casting, and steel product shaping. If some processes for steel input material preparation (e.g. coke making, sintering, pelletising, DRI/HBI production) are outsourced, related emissions shall be included as well by collecting data from suppliers.
  • For steel-making only actors, the roll up shall include all processes involved in steel input material preparation, iron reduction, steel making and casting. If some processes for steel input material preparation (e.g. coke making, sintering, pelletising, DRI/HBI production) are outsourced, related emissions shall be included as well by collecting data from suppliers.
  • For product shaping only actors, the roll up shall include all processes involved operated by the company.

 

5.3.3 Maturity matrix:

Some modules are scored using a maturity matrix, as the assessment is qualitative. The maturity matrix contains five levels of evaluation, that are associated to scores given to the company for each indicator. For some indicators, all 5 levels of the matrix are used to score the company, while for other indicators only some levels are used, in a simpler and less granular approach (ex: level 1, 3 and 5 only). Some of the indicators might be divided into sub-dimension that are evaluated individually before the score is aggregated to obtain the indicator score.

 

5.4 Performance indicators

Table 5 gives an overview of performance indicators for the iron and steel sector.

Some indicators are the same across the ACT methodologies (indicators presented in Management module (module 5), supplier engagement (module 6), client engagement (module 7), Policy engagement (module 8)):

Table 5 : PERFORMANCE INDICATORS

 

For all the maturity matrix except for business model module matrixes, the associated score used is 0 for Basic level, 0,25 for Standard level, 0,5 for Advanced level, 0,75 for Next Practice, 1 for Low-Carbon Aligned.

In order to address the right issues for each type of company, the methodology has been differentiated for integrated companies, iron and steel making only and product shaping only. Some of the quantitative indicators are specific for “Iron and steel making only” actors and “Product shaping only” actors, For integrated company, they have to distinguish both activities in their organisation and calculate, most of the time, both indicators as reported in Table 6.For qualitative, most of the indicators are the same for each type of company.

Table 6 : PERFORMANCE INDICATORS related to the company segmentation

 

5.4.1 Targets

 

5.4.1.1. IS 1.1 Alignment of emissions reduction targets

DESCRIPTION & REQUIREMENTS IS 1.1 Alignment of emissions reduction targets
SHORT DESCRIPTION OF INDICATOR A measure of the alignment of the company’s emissions reduction target with its decarbonization pathway. The indicator will identify the gap between the company’s targets and the decarbonization pathway as a percentage, which is expressed as the company’s commitment gap.
DATA REQUIREMENTS

The questions covering the information relevant to this indicator are:

  • IS0.B: reporting year [C0.1]
  • IS1.A: company’s target [C4.1a], [C4.1b]
  • IS2.A: metric tonne of crude steel produced per plant or metric tonne of crude steel shaped per plant; emissions factor (kg CO2e/ tonne of crude steel) [C-CE9.3b] & [C6.1], [C6.3], [C6.5], or [C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4], [C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7] ; The IEA scenario only allows differentiation between OECD and non-OECD regions. This distinction could be relevant. [to be completed after tool creation]

External sources of data used for the analysis of this indicator are:

9) IEA. Tracking Clean Energy Progress 2017- Energy Technology Perspectives 2017 Exerpt. 2017.

(10) Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

The benchmark indicators involved are:

SEGMENT TARGET TYPE PARAMETER INTENSITY METRIC BENCHMARK 

 

HOW THE ANALYSIS WILL BE DONE

The analysis is based on the difference between the company’s scope 1+2 target (𝑇𝑆12) and the company’s scope 1+2 benchmark (𝐶𝐵S12) at the target year.

The company target (𝑇𝑆12) is the decarbonization over time, defined by the company’s emissions reduction target. To compute T, a straight line is drawn between the starting point of the analysis (i.e. reporting year) and the company’s target endpoint.

The company benchmark (𝐶𝐵S12) pathway is the ‘company specific decarbonization pathway’. See section 6 for details on the computation of this pathway.

The indicator compares 𝑇𝑆12 to 𝐶𝐵S12, by assessing the difference between these pathways. The pathways are expressed in kilograms of CO2e per unit of activity (intensity measure). The unit of activity for the iron and steel sector is tonne of crude steel produced. Where necessary, targets shall be normalized to this activity unit. The result of the comparison is the commitment gap.

To assign a score to this indicator, the size of the commitment gap shall be compared to the maximum commitment gap, which is defined by the business-as-usual pathway (𝐵𝐴𝑈S12). 𝐵𝐴𝑈S12 is defined as an unchanging (horizontal) intensity pathway, whereby the emissions intensity is not reduced at all from the target year.

CALCULATION OF SCORE:

The score is a percentage of the maximum commitment gap. The commitment gap is calculated by dividing the company’s commitment gap by the maximum commitment gap:

 

The score assigned to the indicator is equal to 1 minus the commitment gap and is expressed as a percentage (1 = 100%). Therefore, if 𝑇𝑆12- 𝐶𝐵S12 is equal to zero, the company’s target is aligned with the sectoral benchmark and the maximum score is achieved.

If the target coverage of total company emissions at reporting year represents less than 95%, the final score is equal to Target intermediate score (Ts) x Target coverage of total company emissions.

Otherwise final score of the indicator is equal to target intermediate score (Ts)

If the company has set several targets, the consolidation of the scores assigned to each target will be based on the share of emissions covered by the targets.

RATIONALE IS 1.1 Alignment of emissions reduction targets
RATIONALE OF THE INDICATOR

RELEVANCE OF THE INDICATOR:

Targets are included in the ACT iron and steel assessment for the following reasons:

  • Targets are an indicator of corporate commitment to reduce emissions and are a meaningful metric of the company’s internal planning towards the transition.
  • As most emissions of the sector are within the sector boundaries of control, targets are a very powerful management tool to reduce these emissions. Most emissions from the iron and steel sector can be captured in targets using existing target-setting frameworks.
  • Targets are one of the few metrics that can predict a company’s long-term plans beyond that which can be projected in the short-term, satisfying ACT’s need for indicators that can provide information on the long-term future of a company.

SCORING RATIONALE:

Targets are quantitatively interpreted and directly compared to the low-carbon benchmark for the sector, depending on the segment position of the company, using the benchmark. This is done because most of the emissions from the sector are from direct and indirect emissions, which makes the crude steel production (produced or processed) emissions benchmark the most relevant for the company.

Targets are compared to the benchmark directly, and the relative gap is calculated compared to the business-as-usual pathway. The gap method was chosen for its relative simplicity in interpretation and powerful message, which aligns with the United Nations Environment Program’s (UNEP) narrative of the global commitment gap of the United Nations Framework Convention on Climate Change (UNFCCC) Climate Agreements [6]. The simple percentage score also needs no further computation to become meaningful on its own, as well as be useable for aggregation in the performance score.

United Nations Framework Convention on Climate Change (UNFCCC) Climate Agreements

 

NB: In previous ACT methodologies, the commitment gap calculation was based on the difference between the company’s target and the company benchmark 5 years after the reporting year. A change has appeared in the ACT Iron and steel for the calculation of the commitment gap: the analysis is now based on the difference between the company’s target and the company benchmark at the target year. This calculation appeared to be more relevant for this indicator. This change will be taken into account for upcoming methodologies as well as for existing methodologies when updated.

 

5.4.1.2 IS 1.2 Time horizon of targets

DESCRIPTION & REQUIREMENTS IS 1.2 TIME HORIZON OF TARGETS
SHORT DESCRIPTION OF INDICATOR A measure of the time horizons of company targets. The ideal set of targets is forward looking enough to a long-time horizon compatible with sector plant lifetimes (major infrastructures lifetime of the asset as furnaces, process machines), but also includes short-term targets that incentivise action in the present.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS0.B: reporting year [C0.1]
  • IS1.A: target year [C4.1b]

External sources of data used for the analysis of this indicator are:

The benchmark indicators involved are:

 

HOW THE ANALYSIS WILL BE DONE

The analysis has two dimensions:

  • A comparison of: (a) the longest time horizon of the company’s targets, and (b) the quantiles and median of the company’s capacity weighted asset lifetimes.
  • The company has interval targets that ensure both short and long-term targets are in place to incentivise short-term action and communicate long-term commitments.

DIMENSION 1 – TARGET ENDPOINT:

The company’s target endpoint (𝑇𝑒) is compared to the company’s 1st quantile (Qw.1st), median (Mw) and 3rd quantile (Qw.3rd) of ranked asset lifetimes, weighted by generation capacity and baselined on the reporting year. The company’s target endpoint (𝑇𝑒) is equal to the longest time horizon among the company’s targets, minus the reporting year:

 

The quartiles (Qw.1st, Qw.3rd) and median (Mw) are calculated by ranking the company’s generation assets by estimated lifetime, while also weighting this ranking with information on generation capacity. This means that at the median lifetime, 50% of the company’s generation capacity will have been decommissioned. At the quartiles this is 25% and 75%, respectively.

Please see Figure 10 for a visual representation on how the weighted median and quartiles are derived. In the example shown on this figure, the weighted median lifetime horizon would amount to 20 years into the future, while the weighted 3rd quartile would amount to 36 years. Target endpoints would be benchmarked towards these horizons. While not visualized, the weighted 1st Quartile lifetime horizon would be 6 years.

The assessment will compare 𝑇𝑒 to Q1st, M and Q3rd. This assessment measures the horizon gap:

𝐻𝑜𝑟𝑖𝑧𝑜𝑛 𝑔𝑎𝑝={𝑄𝑤.1𝑠𝑡,𝑀𝑤,𝑄𝑤.3𝑟𝑑}− 𝑇𝑒

The company’s target endpoint is compared according the following scoring table:

 

Figure 10: WEIGHTED LIFETIME EMISSIONS CURVE - DEFINITION AND DERIVATION OF WEIGHTED LIFETIME BENCHMARKS BY RANKING A SET OF ILLUSTRATIVE GENERATION ASSETS BY LIFETIME AND YEARLY CO2 EMISSIONS

 

DIMENSION 2 – INTERMEDIATE HORIZONS:

For each sub-sector, all company targets and their endpoints are calculated and plotted. To get full score, the company must not have time gaps larger than 5 years between targets horizons, starting from the reporting year as baseline.

The company’s targets are compared according the following scoring table:

 

 

Figure 11 : Examples of horizons of intermediate targets set by the company and corresponding scores on dimension 2 of the indicator 1.2

 

FOR ALL CALCULATIONS:

Targets that do not cover > 95% of scope 1+2 emissions for downstream processing and inclusive scope 1+2 for crude streel production are not preferred in the calculations. If these types of targets only are available, then the score is adjusted downwards equal to the % coverage that is missing. Figure 12 : Illustration of emissions covered by targets that are considered for calculation graphically illustrates emissions covered by the targets:

 

Figure 12 : Illustration of emissions covered by targets that are considered for calculation

 

AGGREGATE SCORE - DIMENSION 1: 50%, DIMENSION 2: 50%.

RATIONALE IS 1.2 TIME HORIZON OF TARGETS
RATIONALE OF THE INDICATOR

RELEVANCE OF THE INDICATOR:

The time horizon of targets is included in the ACT assessment for the following reasons:

  • The target endpoint is an indicator of how forward looking the company’s transition strategy is.
  • The long-expected time horizon of production assets means that producers ‘commit’ a large amount of GHG emissions into the future, which requires targets that have time horizons that are aligned with this reality.
  • Aside from communicating long-term commitments, short-term action needs to be incentivised. Therefore short-time intervals between targets are needed. A 5 year interval is seen as a suitable interval to ensure company is taking enough action, holding itself accountable by measuring progress every 5 years.

SCORING RATIONALE

The score of this indicator is tied to how the target timeline compares to the lifetimes of the company’s asset portfolio. The company has a ‘horizon gap’ if its targets do not include a significant part of its asset portfolio. It is however recognized that some assets may have lifetimes that exceed meaningful target endpoints.

 

5.4.1.3. IS 1.3 Achievement of previous targets

DESCRIPTION & REQUIREMENTS IS 1.3 ACHIEVEMENT OF PREVIOUS TARGETS
SHORT DESCRIPTION OF INDICATOR A measure of the company’s historical target achievements and current progress towards active emissions reduction targets. The ambition of the target is qualitatively assessed and is not included in the performance indicators.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS0.B: reporting year [C0.1]
  • IS1.A: from [C4.1a] and [C4.1b]

For each target:

  • Base year
  • Start year
  • Target year
  • Percentage of reduction target from base year in absolute emissions
  • Percentage of reduction target achieved in absolute emissions
HOW THE ANALYSIS WILL BE DONE

For the performance score, this will be assessed on two dimensions, whereby companies achieve the maximum score if

DIMENSION 1: ACHIEVEMENT OF PAST TARGETS

The company achieved all previous emissions reduction targets with a target year in the past.

The score is binary: 100% if the company achieved all those targets – 0% otherwise.

DIMENSION 2: EXISTING TARGET ACHIEVEMENT

The company is currently on track to meet an existing emissions reduction target, whereby the ratio between the remaining time period and the level missing to target achievement (Progress Ratio p) is not lower than 0.5:

The highest score (100%) is attained if p is 1 or higher, and the lowest score (0%) is attained if p is 0.5 or lower. A percentage score is assigned for any value between 0.5 and 1.

AGGREGATE SCORE - DIMENSION 1:25%, DIMENSION 2:75%.

FOR ALL CALCULATIONS:

  • Companies whose past targets do not have target years, but which only have target years in the future are not assessed on dimension 1 (score = 0), but only on dimension 2.
  • Targets that do not cover >95% of scope 1+2 emissions for iron and steel makers and inclusive scope 1+2 for product shapers are not preferred in the calculation of dimension 2, but will not be penalized, as other indicators already penalize companies for not having a large coverage in the target.
  • If the company has several active targets in different scopes that can be assessed according to the above criteria, then the score will be an average score based on the progress ratios of all targets assessed.

The performance score does not assess the ambition level and scope of previous targets, and therefore dimension 1 only has a low weight in the final performance score. This information is assessed in the analysis narrative, which will look at the following dimensions:

  • Achievement level: To what degree has the company achieved its previously set emissions reduction targets?
  • Progress level: To what degree is the company on track to meet its current emissions reduction targets?
  • Ambition level: What level of ambition do the previously achieved emissions reduction targets represent?
RATIONALE IS 1.3 ACHIEVEMENT OF PREVIOUS TARGETS
RATIONALE OF THE INDICATOR

RELEVANCE OF THE INDICATOR:

  • The ACT assessment only looks to the past to the extent that it can inform on the future. This indicator is future-relevant by providing information on the company’s organizational ability to set and meet emissions reduction targets. Dimension 1 of this indicator adds credibility to any company claiming to commit to a science-based reduction pathway.
  • Indicators 1.1 to 1.4 look at targets in an undefined, theoretical future. Dimension 2 of this indicator adds value and grounds the assessment to the analysis of a comparison to the company’s historical performance with respect to its targets in the reporting year.

Scoring rationale:

Quantitative interpretation of previous target achievement is not straightforward. The performance score thus makes no judgement of previous target ambition and leaves it to the analysis narrative to make a meaningful judgement on the ambition level of past targets.

Dimension 1 of the performance score will penalize companies who have not met previous targets in the past 10 years, as this means the company has lower credibility when setting ambitious science-based targets.

Dimension 2 uses a simple ratio sourced from existing CDP data points (CC 3.1e) in order to compare targets. The threshold 0.5 was chosen as it allows companies some flexibility with respect to the implementation of the target, but it does have the ability to flag companies that are not on track towards achievement. When p is lower than 0.5, the company needs to achieve more than twice the reduction per unit of time than the target originally envisioned.

 

5.4.2. Material investment

 

5.4.2.1 IS 2.1 Trend in past emissions intensity of all crude steel production assets

DESCRIPTION & REQUIREMENT IS 2.1 TREND IN PAST EMISSIONS INTENSITY OF ALL CRUDE STEEL PRODUCTION ASSETS
Short description of indicator A measure of the alignment of the company’s recent crude steel production assets emissions intensity trend with that of its decarbonization pathway. The indicator will compare the gradient of this trend over a 5-year period to the reporting year (reporting year minus 5 years) with the decarbonization pathway trend over a 5-year period after the reporting year.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 0.B: The start and end date for which data is reported for the most recent year – CDP0.2
  • IS 2.A: For all existing and planned assets : Asset name, Geographic Location (country level), Plant type, Technology, Fuel mix , Status, Total capacity (metric tonne), Production (metric tonne), Emissions factor (kg CO2e/tonne crude steel), Year of commissioning, Expected lifetime (years), Decommissioning or modernization year, if planned, Ownership stake (%), Attributable to reporting boundary (%)
  • IS 2.B: The reporter shall provide plant activity and emissions data by plant type for the last five years

External sources of data used for the analysis of this indicator are:

  • IEA ETP (9) – background scenario data
  • SDA (10) – specific benchmark pathway definition
  • IPCC (2006) (11) – Fuel emissions factors
  • Environmental Product Declaration according to ISO 21930:2017 or EN15804+A1:2014 (or EN15804+A2:2019)
  • EN 19694-2 standard.

(9) IEA. Tracking Clean Energy Progress 2017- Energy Technology Perspectives 2017 Exerpt. 2017.

(10) Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

(11). IPCC. IPCC Guidelines for National Greenhouse Gas Inventories, Volume 3, Chapter 2. 2006.

The benchmark indicators involved are:

 

How the analysis will be done

The analysis is based on the comparison between the company’s recent (reporting year minus 5 years) emissions intensity trend gradient (𝐶𝑅’S12) and the company’s decarbonization pathway trend gradient (𝐶𝐵’S12) in the short-term (reporting year plus 5 years).

𝐶𝑅’S12 is the gradient of the linear trend-line of the company’s recent inclusive scope 1+2 emissions intensity (kgCO2/tonne crude steel) over time (𝐶𝑅S12).

𝐶𝐵’S12 is the gradient of the linear trendline of the company benchmark pathway for emissions intensity (kgCO2/tonne crude steel) (𝐶𝐵𝑆12). See section 6. Quantitative benchmarks used for the indicators for details on the computation of the company specific decarbonization pathway.

The difference between 𝐶𝑅’S12 and 𝐶𝐵’S12 will be measured by their ratio (𝑟𝑆12). This is the inclusive scope 1+2 emissions Transition ratio’ which is calculated by the following equation, with the symbol ‘used to denote gradients:

If the transition ratio is a negative number, it means the company’s recent emissions intensity has increased (positive 𝐶𝑅’S12) and a zero score is awarded by default. If the company’s recent emissions intensity has decreased, the transition ratio will be a positive number. A score is assigned as a percentage value equal to the value of 𝑟𝑆12 (1 = 100%).

RATIONALE IS 2.1 TREND IN PAST EMISSIONS INTENSITY FOR (GLOBAL) CRUDE STEEL PRODUCTION
Rationale of the indicator

Relevance of the indicator:

This indicator is meant to ensure that companies have been investing enough in transitioning to be in line with its company benchmark.

Trend in past emissions intensity is included in the ACT IS assessment for the following reasons:

  • The trend shows the speed at which the company has been reducing its emissions intensity over the recent past. Comparing this to the decarbonization pathway gives an indication of the scale of the change that needs to be made within the company to bring it onto a low-carbon pathway.
  • While ACT aims to be as future-oriented, it nevertheless does not want to solely rely on projections of the future, in a way that would make the analysis too vulnerable to the uncertainty of those projections. Therefore, this measure, along with projected emissions intensity and absolute emissions, forms part of a holistic view of company emissions performance in the past, present, and future.

Scoring rationale:

While ‘gap’ type scoring is preferred where possible for any indicator, this indicator only looks at past emissions and would therefore require a different baseline to generate a gap analysis. Thus, instead of a gap analysis, a trend analysis is conducted to compare current data of the company to the past data and improvements that have been made since the past data. An advantage of the trend analysis is that it does not require the use of a business-as-usual pathway to anchor the data points and aid interpretation; trends can be compared directly and a score can be directly correlated to the resulting ratio.

 

5.4.2.2. IS 2.2 Trend in past emission intensity PER TECHNICAL ROUTE

DESCRIPTION & REQUIREMENT IS 2.2 Trend in past emission intensity PER TECHNICAL ROUTE
Short description of indicator A measure of the alignment of the company’s recent emissions crude steel emission intensity trend with that of its decarbonization pathway, specific to each type of production route. This indicator is split into 6 sub-indicators, one per type of asset. Each sub-indicator indicator will compare the gradient of this trend over a 5-year period to the reporting year (reporting year minus 5 years) with the decarbonization pathway trend over a 5-year period after the reporting year. An aggregated score is computed as the average of sub-indicator scores, weighted by the share of the asset type in the company’s total scope 1+2 emissions
Data requirements

Data requirements are the same as for IS 2.1.

External sources of data used for the analysis of this indicator are:

  • IEA ETP (9) – background scenario data
  • SDA (10) – specific benchmark pathway definition
  • IPCC (2006) (11) – Fuel emissions factors
  • Environmental Product Declaration according to ISO 21930:2017 or EN15804+A1:2014 (or EN15804+A2:2019)

(9) IEA. Tracking Clean Energy Progress 2017- Energy Technology Perspectives 2017 Exerpt. 2017.

(10) Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

(11). IPCC. IPCC Guidelines for National Greenhouse Gas Inventories, Volume 3, Chapter 2. 2006.

The benchmark indicators involved are:

 

How the analysis will be done

This indicator is split into 6 sub-indicators, one for each type of asset:

  • BF-BOF crude steel production asset
  • SR-BOF crude steel production asset
  • DRI-EAF crude steel production asset
  • Scrap-EAF crude steel production asset
  • Cast iron production asset
  • Steel product shaping asset

For each sub-indicator, the analysis is based on the comparison between the company’s recent (reporting year minus 5 years) emissions intensity trend gradient (𝐶𝑅’S12) and the company’s decarbonization pathway trend gradient (𝐶𝐵’S12) in the short-term (reporting year plus 5 years).

𝐶𝑅’S12 is the gradient of the linear trend-line of the company’s recent inclusive scope 1+2 emissions intensity (kgCO2/tonne crude steel) over time (𝐶𝑅S12).

𝐶𝐵’S12 is the gradient of the linear trendline of the company benchmark pathway for emissions intensity (kgCO2/tonne crude steel) (𝐶𝐵𝑆12). See section 6.Quantitative benchmarks used for the indicators for details on the computation of the company specific decarbonization pathway.

The difference between 𝐶𝑅’S12 and 𝐶𝐵’S12 will be measured by their ratio (𝑟𝑆12). This is the inclusive scope 1+2 emissions Transition ratio’ which is calculated by the following equation, with the symbol ‘used to denote gradients:

If the transition ratio is a negative number, it means the company’s recent emissions intensity has increased (positive 𝐶𝑅’S12) and a zero score is awarded by default. If the company’s recent emissions intensity has decreased, the transition ratio will be a positive number. A score is assigned as a percentage value equal to the value of 𝑟𝑆12 (1 = 100%).

An aggregated score is computed as the average of sub-indicator scores, weighted by the share of the asset type in the company’s total scope 1+2 emissions:

 

Where:

  • RS12i is the score on the sub-indicator i
  • Ei is the total scope 1+2 emissions of all assets of type i
RATIONALE IS 2.2 TREND IN PAST EMISSION INTENSITY PER TECHNICAL ROUTE
Rationale of the indicator

Relevance of the indicator:

This indicator ensures companies are working on improving each activity individually (production routes and steel product shaping).

Trend in past emissions intensity is included in the ACT IS assessment for the following reasons:

  • The trend shows the speed at which the company has been reducing its emissions intensity over the recent past. Comparing this to the decarbonization pathway gives an indication of the scale of the change that needs to be made within the company to bring it onto a low-carbon pathway.
  • While ACT aims to be as future-oriented, it nevertheless does not want to solely rely on projections of the future, in a way that would make the analysis too vulnerable to the uncertainty of those projections. Therefore, this measure, along with projected emissions intensity and absolute emissions, forms part of a holistic view of company emissions performance in the past, present, and future.

Scoring rationale:

While ‘gap’ type scoring is preferred where possible for any indicator, this indicator only looks at past emissions and would therefore require a different baseline to generate a gap analysis. Thus, instead of a gap analysis, a trend analysis is conducted to compare current data of the company to the past data and improvements that have been made since the past data. An advantage of the trend analysis is that it does not require the use of a business-as-usual pathway to anchor the data points and aid interpretation; trends can be compared directly and a score can be directly correlated to the resulting ratio.

 

5.4.2.3 IS 2.3 Locked-in emissions of crude steel production assets

DESCRIPTION & REQUIREMENT IS 2.3 LOCKED-IN EMISSIONS of crude steel production assets
Short description of indicator A measure of the company’s cumulative GHG emissions from the reporting year to reporting year + 15 years from installed and planned plants. The indicator will compare this to the emissions budget entailed by the company’s intensity decarbonization pathway and projected trends in the sector at the country/regional level.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 0.B: The start and end date for which data is reported for the most recent year – CDP0.2
  • IS 1.A: Declaration of the company targets - Variation of [CDP C4.1] + [CDP C4.1a] + [CDP C4.1b]
  • IS 2.A: For all existing and planned assets: Asset name, Geographic Location (country level), Plant type, Technology, Fuel mix, Status, Total capacity (metric tonne), Production (metric tonne), Emissions factor (kg CO2e/tonne crude steel), Year of commissioning, Expected lifetime (years), Decommissioning or modernization year, if planned, Ownership stake (%), Attributable to reporting boundary (%)

External sources of data used for the analysis of this indicator are:

  • IEA ETP (9) – background scenario data
  • SDA (10) – specific benchmark pathway definition
  • IPCC (2006) (11) – Fuel emissions factors

(9) IEA. Tracking Clean Energy Progress 2017- Energy Technology Perspectives 2017 Exerpt. 2017.

(10) Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

(11). IPCC. IPCC Guidelines for National Greenhouse Gas Inventories, Volume 3, Chapter 2. 2006.

The benchmark indicators involved are:

 

How the analysis will be done

The analysis is based on the ratio between the company’s installed and planned emissions for the 15 years after the reporting year [𝐿𝐺(𝑡)], and the emissions budget entailed by the company’s carbon budget [𝐵𝐺(𝑡)] over the same period of time.

(𝑡) is calculated as the total cumulative emissions implied by the lifetimes of currently active and confirmed planned assets that are going to be commissioned soon. If unknown, the commissioning year of projects is estimated from the project status (e.g. bidding process, construction, etc.) and data on typical project periods by plant type. An average historical capacity factor over a 5-year period to the reporting year is applied to plant capacities to estimate future production.

(𝑡) is calculated as the company’s locked-in carbon commitments, up until the chosen time period t, which is derived by taking the area under the company’s future locked-in emissions curve. This curve in turn is derived from the company’s intensity pathway 𝐶𝐴𝐺, multiplied by activity 𝐴𝐺:

 

(𝑡) is calculated as the company’s carbon budget up until time t, which is derived by taking the area under the absolute emissions reduction curve. This curve in turn is derived from the company benchmark pathway (CBG) by multiplying it by activity 𝐴𝐺:

 

Depending on the data availability, the computation of these areas may not be as straightforward as the equations shown and will be done by approximation, but the principles will hold.

The locked-in ratio (rLB) is calculated as follows:

 

The default value for t is 15 years after the reporting year.

Calculation of the score:

If 𝑟𝐿𝐵 is 1 or lower, then the company stays within its carbon budget, and will be assigned the maximum score (100%). If 𝑟𝐿𝐵 is 1.5 or higher, then the company strongly exceeds its carbon budget, and will be assigned the minimum score (0%). If 𝑟𝐿𝐵 is between 1 and 1.5, then the company will be assigned a score of 1.5 - 𝑟𝐿𝐵 divided by 50%.

RATIONALE IS 2.3 LOCKED-IN EMISSIONS of crude steel production assets
Rationale of the indicator

Relevance of the indicator:

Locked-in emissions are included in the ACT assessment for the following reasons:

  • Absolute GHG emissions over time are the most relevant measure of emissions performance for assessing a company’s contribution to global warming. While the indicator IS 2.3A has a short-term measurement point on reporting year plus 5 years, the concept of locked-in emissions allows a judgement to be made about the company’s outlook in more distant time periods.
  • Analysing a company’s locked-in emissions alongside science-based budgets also introduces the means to scrutinise the potential cost of inaction, including the probability of stranded assets.
  • Examining absolute emissions, along with recent and short-term emissions intensity trends, forms part of a holistic view of a company’s emissions performance in the past, present, and future.

Scoring rationale:

The only data coming in is provided by the asset dataset: currently active plants and plants and modernization / retrofit plans that are ‘in the pipeline’ (which can be estimated to become active in the short-term).

When a plant reaches the end of its estimated lifetime, no replacement is assumed because those decisions have not been made yet. In fact, iron and steel plants are not often decommissioned but more modernized with new important equipment, so the lifetime of the asset is assumed to be the average lifetime of the process equipment (kiln, storage, mills, mixers, buildings…), which could be 30 years.

Hence, the locked-in emissions calculated are the locked-in emissions of committed (existing and pipeline) plants only. The indicator describes the proportion of their budget (computed from the reporting year for 15 years ahead) that will be used up by committed activity.

Unlike the ‘gap’ and ‘trend’ comparisons done in all other quantitative indicators, this indicator compares two areas: that of the carbon budget until t and the locked-in emissions until t. It is expected that companies will exceed their budget when t is in the short-term future but will not when it is in the long-term future. However, any short-term exceedance will have to be compensated for in later time periods. This is called carbon budget displacement, which makes the company’s actual decarbonization pathway steeper than the original benchmark. There is a dimension of risk from inaction here.

When the company exceeds its full carbon budget to reporting year + 15 years, it will not be able to displace enough carbon from later time periods to nearer ones and will be faced with stranded assets when the current lifetime estimates are held up. This is a major problem, and this situation will certainly result in a zero score.

When companies are closer to their carbon budget than others, they will be less flexible in their future strategy as there is more pressure to change their equipment on a plant (modernization on a kiln for example). There is also less room for refurbishment to extend the lifetimes of existing assets as this carries the risk of exceeding the carbon budget. Therefore, there is rationale for intermediate scoring levels that magnify this level of risk due of future flexibility in the future.

Note on calculating LG and BG:

Where data on plant emissions intensity is unavailable at the asset level (requested in IS2A), default factors are applied and are the median of the range of values published in annex A.III. 4.2.1 of IPCC. Data on typical project periods by plant type is also obtained from this source. Where plant lifetime information is unavailable (requested in IS2A). The rationale for using these sources is that the medians are built on comprehensive samples of data.

 

5.4.2.4  IS 2.4 Trend in future emissions intensity OF ALL CRUDE STEEL PRODUCTION ASSETS

DESCRIPTION & REQUIREMENT IS 2.4 TREND IN FUTURE EMISSIONS INTENSITY of all crude steel production assets
Short description of indicator A measure of the alignment of the company’s projected crude steel production assets emissions intensity with its decarbonization pathway. The indicator will identify the gap in 5 years after the reporting year between the company’s performance and the decarbonization pathway as a percentage, which is expressed as the company’s ‘action gap’.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS0.B: The start and end date for which data is reported for the most recent year – CDP0.2
  • IS1.A: Declaration of the company targets. Variation of [CDP C4.1] + [CDP C4.1a] + [CDP C4.1b]
  • IS2.A: For all existing and planned assets : Asset name, Geographic Location (country level), Plant type, Technology, Fuel mix , Status, Total capacity (metric tonne), Production (metric tonne), Emissions factor (kg CO2e/tonne crude steel produced), Emissions factor (kg CO2e/tonne crude steel processed), Year of commissioning, Expected lifetime (years), Decommissioning or modernization year, if planned, Ownership stake (%), Attributable to reporting boundary (%)
  • IS2.B: The reporter shall provide plant activity and emissions data by plant type,

External sources of data used for the analysis of this indicator are:

  • IEA ETP [10]– background scenario data
  • SDA [11] – specific benchmark pathway definition
  • IPCC (2006) [13] – Fuel emissions factors

(10) Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

(11). IPCC. IPCC Guidelines for National Greenhouse Gas Inventories, Volume 3, Chapter 2. 2006.

(13) International Organization for Standardization. ISO/AWI TS 19694-2. Stationary source emissions — Greenhouse Gas (GHG) emissions in energy-intensive industries — Part 2: Iron and steel industry. [Online] 

 

The benchmark indicators involved are:

 

How the analysis will be done

The analysis is based on the difference between the company’s action pathway (C𝐴𝐺) and the company’s benchmark (𝐶𝐵𝐺) developing from the reporting year to 5 years after.

The company’s action pathway (C𝐴𝐺) is the weighted average plant emissions intensity over time, assuming the continuation of active plants until anticipated decommissioning and the completion of known plant/retrofit projects. If unknown, the commissioning year of projects is estimated from the project status (e.g. bidding process, construction, etc.) and data on typical project periods by plant type.

The company’s benchmark (𝐶𝐵𝐺) pathway is the ‘company specific decarbonization pathway’. See section 6.1 for details on the computation of this pathway.

The analysis compares C𝐴𝐺 to 𝐶𝐵𝐺, by examining the difference between these pathways in 5 years after the reporting year. The pathways are expressed in kilograms of CO2 per unit of activity (intensity measure). The unit of activity for the iron and steel sector is tonne of crude steel. The result of the comparison is the action gap.

Calculation of the score:

To assign a score to this indicator, the size of the action gap will be compared to the maximum action gap, which is defined by the business as usual pathway (𝐵𝐴𝑈𝐺). 𝐵𝐴𝑈𝐺 is defined as an unchanging (horizontal) intensity pathway, whereby the emissions intensity is not reduced at all over a period after the reporting year.

The score assigned to the indicator is equal to 1 minus the action gap and is expressed as a percentage (1 = 100%). Therefore, if C𝐴𝐺 - 𝐶𝐵𝐺 is equal to zero, the company’s target is aligned with the sectoral benchmark, and the maximum score is achieved

RATIONALE IS 2.4 TREND IN FUTURE EMISSIONS INTENSITY OF ALL CRUDE STEEL PRODUCTION ASSETS
Rationale of the indicator

Relevance of the indicator:

The trend in future emissions intensity is included in the ACT assessment for the following reasons:

  • It indicates if the company is in line with a low-carbon scenario
  • This indicator is the most valuable in terms of the information it provides on the company’s actual action towards decarbonization.
  • This particular measure, along with recent emissions intensity and absolute emissions, forms part of a holistic view of company emissions performance in the past, present, and future.

Scoring rationale:

The scoring rationale follows the same narrative as indicator IS 1.1, so refer to the rationale of this indicator to understand the choices made.

The gap method was chosen for its relative simplicity in interpretation and is aligned with most of the other forward-looking indicators. Indeed, the indicator looks at a fix point in the future and assesses the capacity of the company to deploy a range of low-carbon products in the short term.

NOTE ON CALCULATING AG:

Where data on plant emissions intensity is unavailable at the asset level (requested in IS 2A), default factors are applied and are the median of the range of values published in annex A.III. 4.2.1 of IPCC. Data on typical project periods by plant type is also obtained from this source. Where plant lifetime information is unavailable (requested in IS 2A), the median of known lifetimes in iron and steel sector will be applied. The rationale for using these sources is that the medians are built on comprehensive samples of data.

 

5.4.2.5.  IS 2.5 Trend in future emissions intensity PER TECHNICAL ROUTES

DESCRIPTION & REQUIREMENT IS 2.5 TREND IN FUTURE EMISSIONS INTENSITY PER TECHNICAL ROUTES
Short description of indicator A measure of the alignment of the company’s projected crude steel emissions intensity with its decarbonization pathway, specific to each type of asset. This indicator is split into 6 sub-indicators, one per type of asset. Each sub-indicator indicator will identify the gap in 5 years after the reporting year between the company’s performance and the decarbonization pathway as a percentage, which is expressed as the company’s ‘action gap’.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS0.B: The start and end date for which data is reported for the most recent year – CDP0.2
  • IS1.A: Declaration of the company targets. Variation of [CDP C4.1] + [CDP C4.1a] + [CDP C4.1b]
  • IS2.A: For all existing and planned assets : Asset name, Geographic Location (country level), Plant type, Technology, Fuel mix , Status, Total capacity (metric tonne), Production (metric tonne), Emissions factor (kg CO2e/tonne crude steel produced), Emissions factor (kg CO2e/tonne cast iron produced), Emissions factor (kg CO2e/tonne crude steel processed), Year of commissioning, Expected lifetime (years), Decommissioning or modernization year, if planned, Ownership stake (%), Attributable to reporting boundary (%)
  • IS2.B: The reporter shall provide plant activity and emissions data by plant type.

External sources of data used for the analysis of this indicator are:

  • IEA ETP [10] – background scenario data
  • SDA [11] – specific benchmark pathway definition
  • IPCC (2006) [13] – Fuel emissions factors

(10) Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

(11). IPCC. IPCC Guidelines for National Greenhouse Gas Inventories, Volume 3, Chapter 2. 2006.

(13) International Organization for Standardization. ISO/AWI TS 19694-2. Stationary source emissions — Greenhouse Gas (GHG) emissions in energy-intensive industries — Part 2: Iron and steel industry. [Online] 

The benchmark indicators involved are:

 

How the analysis will be done

This indicator is split into 6 sub-indicators, one for each type of asset:

  • BF-BOF crude steel production asset
  • SR-BOF crude steel production asset
  • DRI-EAF crude steel production asset
  • Scrap-EAF crude steel production asset
  • Cast iron production asset
  • Steel product shaping asset

For each sub-indicator, the analysis is based on the difference between the company’s action pathway (C𝐴𝐺) and the company’s benchmark (𝐶𝐵𝐺) developing from the reporting year to 5 years after.

The company’s action pathway (C𝐴𝐺) is the weighted average plant emissions intensity over time, assuming the continuation of active plants until anticipated decommissioning and the completion of known plant/retrofit projects. If unknown, the commissioning year of projects is estimated from the project status (e.g. bidding process, construction, etc.) and data on typical project periods by plant type.

The company’s benchmark (𝐶𝐵𝐺) pathway is the ‘company specific decarbonization pathway’. See section 6.1 for details on the computation of this pathway.

The analysis compares C𝐴𝐺 to 𝐶𝐵𝐺, by examining the difference between these pathways in 5 years after the reporting year. The pathways are expressed in kilograms of CO2 per unit of activity (intensity measure). The unit of activity for the iron and steel sector is tonne of crude steel. The result of the comparison is the action gap.

Calculation of the score:

To assign a score to each sub-indicator, the size of the action gap will be compared to the maximum action gap, which is defined by the business as usual pathway (𝐵𝐴𝑈𝐺). 𝐵𝐴𝑈𝐺 is defined as an unchanging (horizontal) intensity pathway, whereby the emissions intensity is not reduced at all over a period after the reporting year.

 

The score assigned to the indicator is equal to 1 minus the action gap and is expressed as a percentage (1 = 100%). Therefore, if C𝐴𝐺 - 𝐶𝐵𝐺 is equal to zero, the company’s target is aligned with the sectoral benchmark, and the maximum score is achieved.

An aggregated score is computed as the average of sub-indicator scores, weighted by the share of the asset type in the company’s total scope 1+2 emissions:

 

Where:

Scorei is the score on the sub-indicator i

Ei is the total scope 1+2 emissions of all assets of type i

RATIONALE IS 2.5 TREND IN FUTURE EMISSIONS INTENSITY PER TECHNICAL ROUTES
Rationale of the indicator

Relevance of the indicator:

The trend in future emissions intensity is included in the ACT assessment for the following reasons:

  • It indicates if the company is in line with a low-carbon scenario
  • This indicator is the most valuable in terms of the information it provides on the company’s actual action towards decarbonization.
  • This particular measure, along with recent emissions intensity and absolute emissions, forms part of a holistic view of company emissions performance in the past, present, and future.

Scoring rationale:

The scoring rationale follows the same narrative as indicator IS 1.1, so refer to the rationale of this indicator to understand the choices made.

The gap method was chosen for its relative simplicity in interpretation and is aligned with most of the other forward-looking indicators. Indeed, the indicator looks at a fix point in the future and assesses the capacity of the company to deploy a range of low-carbon products in the short term.

NOTE ON CALCULATING AG:

Where data on plant emissions intensity is unavailable at the asset level (requested in IS 2A), default factors are applied and are the median of the range of values published in annex A.III. 4.2.1 of IPCC. Data on typical project periods by plant type is also obtained from this source. Where plant lifetime information is unavailable (requested in IS 2A), the median of known lifetimes in iron and steel will be applied. The rationale for using these sources is that the medians are built on comprehensive samples of data.

 

5.4.2.6.    IS 2.6 SCRAP REDUCTION STRATEGY

DESCRIPTION & REQUIREMENT IS 2.6 SCRAP REDUCTION STRATEGY
Short description of indicator The company demonstrates that it has a comprehensive strategy at the corporate level to reduce scrap within first in its own operations.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS2.C: What are the commitments (target, timescale)? What is the applied method? How is the strategy’s monitoring done?
How the analysis will be done

The analyst evaluates the description and evidence of the scrap reduction strategy for the presence of best practice elements and consistency with the other reported management indicators. The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points is allocated for elements indicating a higher level of maturity.

  • Best-practice elements to be identified in the scrap reduction strategy include:
  • Basing it on an exercise costing the value of scrap
  • Commitment to reduce scrap in direct operations (covers all operations and whole organisational boundary)
  • Using targets with end dates for scrap reduction
  • Having interim targets
  • Following a waste hierarchy approach (prevention first) (for example, from the UNEP national waste management strategies report [X])
  • Management at a high level within the organisation
  • Monitoring, reporting and verification processes included to track progress
  • Continuous improvement/learning feedback mechanisms
  • Commitments to employee education
  • Linking the scrap strategy to the development of circular economy business models
  • Linking the scrap strategy to the core business strategy
  • Linking the scrap strategy to core business operations (procurement, product design)

The maximum score (100%) is assigned if all of these elements are demonstrated.

The maturity matrix used for the assessment is the following:

 

 

RATIONALE IS 2.6 SCRAP REDUCTION STRATEGY
Rationale of the indicator

Scrap is a waste that could be significantly reduce the energy and CO2 cost of steel production if it goes back to the smelting site. As scrap is a limited resource, improved the waste management in the downstream value chain could help to “secure” the steel market demand. (12) (13)

(12) CEN. EN 19694-2:2016. Stationary source emissions - Greenhouse Gas (GHG) emissions in energy-intensive industries - Part 2: Iron and steel industry. [Online] 20 July 2016. 

(13) International Organization for Standardization. ISO/AWI TS 19694-2. Stationary source emissions — Greenhouse Gas (GHG) emissions in energy-intensive industries — Part 2: Iron and steel industry. [Online] 

Here, it is the pre-consumer scrap that is assessed, arising from yield losses in iron and steelmaking and manufacturing of steel-based products.

Waste is a significant source of GHG emissions which can be avoided with co-benefits in economic and environmental terms for producers. As links between producers and consumers in the economy, product shapers could influence both halves of the value chain. This needs to be within a coherent strategic framework to ensure that (i) GHG impacts are decreased, and (ii) benefits are maximised by prioritizing opportunities and scaling up successes. Waste reduction approaches can require cultural shifts and education within organisations, both of which require buy-in from across an organisation that can be enhanced by a specific strategic focus. For the iron and steel sector, waste reduction approaches could also be supported by local regulations.

 

5.4.2.7.   IS 2.7 Co-products / Waste reduction and reuse activities

DESCRIPTION & REQUIREMENT IS 2.7 CO-PRODUCTS/WASTE REDUCTION AND REUSE ACTIVITIES
Short description of indicator The company demonstrates that it has a comprehensive activity at the corporate level to valorize co-products and waste within its own operations and in the upstream phases of its value chain.
Data requirements
  • IS2.D: % of co-products landfilled
  • IS2.E: % of off-gases used for flaring or produced electricity
How the analysis will be done

For the performance score, this will be assessed on two dimensions, whereby companies achieve the maximum score if

DIMENSION 1: REUSE OF Solid CO PRODUCTS LANDFILLED:

This dimension concerns only solid co-products as slags, dusts and sludges. Calculation is directly proportional to the % of solid waste valorised. Closer to 0% of landfilled co-products the company is, higher is its score.

DIMENSION 2: REUSE OF OFF-GASES FLARED:

This dimension concerns only gaseous co-products. Calculation is directly proportional to the % of gaseous waste for flaring. Closer to 0% of off-gases used for flaring, the company is, higher is its score.

AGGREGATE SCORE - DIMENSION 1:50%, DIMENSION 2:50%.

RATIONALE IS 2.7 CO-PRODUCTS/WASTE REDUCTION AND REUSE ACTIVITIES
Rationale of the indicator

RELEVANCE OF THE INDICATOR:

  • The main co-products produced during iron and crude steel production are slags, dusts and sludges. Process gases, for example, from the coke oven, BF or BOF are also important co-products (14).
  • The slag volume at iron making affects the CO2 intensity of the process but depends on factors which are beyond the responsibility of the operator due to local conditions or company choices on raw material procurements. Knowing that slag volumes ranking 160-650 kg/t can be observed, this aspect should not be forgotten in performance assessment (12) (13).
  • Indicators on business models are more looking at the future and goes beyond this indicator by opening the financial and environmental valorisation of the product, for example with synergies with other industries or specific ways of treatment

(12) CEN. EN 19694-2:2016. Stationary source emissions - Greenhouse Gas (GHG) emissions in energy-intensive industries - Part 2: Iron and steel industry. [Online] 20 July 2016. 

(13) International Organization for Standardization. ISO/AWI TS 19694-2. Stationary source emissions — Greenhouse Gas (GHG) emissions in energy-intensive industries — Part 2: Iron and steel industry. [Online] 

14. Association, World Steel. Steel industry co-products. 2020.

Scoring rationale:

This indicator is important to follow the management of these resources. For the exhaust gases, increase the use as heat inside of the plant is better than produce electricity or reinjected in the grid because of the efficiency of the process. Flaring should be avoided as possible. Solid co-product could be valorised or sold; the worst case considered is landfilling.

 

5.4.3   Intangible investment

 

5.4.3.1.  IS 3.1 R&D IN CLIMATE CHANGE MITIGATION TECHNOLOGIES

DESCRIPTION & REQUIREMENTS IS 3.1 R&D IN CLIMATE CHANGE MITIGATION TECHNOLOGIES
Short description of indicator A measure of the ratio of R&D investments in mitigation-relevant technologies. The indicator will identify the company’s R&D investment and the required investment as in mature and non-mature technologies.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • R&D costs/investments in climate change mitigation technologies of the company for the three last years
  • Total R&D costs/investments of the company - Variation of [CDP C-CO9.6/C-CE9.6/C-OG9.6] for the three last years
  • Investment in mature and non-mature technologies (a table is supplied in the methodology to distinguish what is mature and what is non-mature)

External sources of data used for the analysis of this indicator are:

(15) Forum, GGSD. Low and zero emissions in the steel and the cement industries. 2019.

Maturity of technology – Technology Readiness Levels (TRLs):

  • IEA website: ETP Clean Energy Technology Guide
How the analysis will be done

The assessment is based on the share of the company’s R&D costs and/or investments in climate change mitigation related technologies. The company’s share will be compared to the maturity matrix developed to guide the scoring and a greater number of points will be allocated for companies indicating a higher level of maturity, which means a higher share in R&D costs/investments in these technologies.

The matrix is provided below:

 

RATIONALE IS 3.1 R&D FOR LOW-CARBON TRANSITION 
Rationale of the indicator

Relevance of the indicator:

R&D for low-carbon transition is included in the ACT assessment for the following reasons:

  • To enable the transition, sectors such as the I&S sector rely heavily on R&D to develop: low-carbon technologies replacing their currently high-emitting portfolio of asset, new iron and steel with low-ratio of coke or pig iron at all and the use of new and low-emitting fuels, carbon capture, storage and use .
  • R&D is also one of the principal tools to reduce the costs of a technology in order to increase its market penetration.
  • Lastly, the R&D investment of a company into non-mature technologies allows for direct insight into the company’s commitment to alternative technologies that may not currently be part of its main business model.

Defining R&D:

Research and development (R&D): Refers to the activities companies undertake to innovate and introduce new products and services. It is often the first stage in the development process. Investment in R&D is a type of operating expense associated with the research and development of a company's goods or services. (definition from CDP guidance).

Research and experimental development (R&D) comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications. The term R&D covers three activities (definitions from OECD website, 2012):

  • Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any application or use in view.
  • Applied research is also original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective.
  • Experimental development is systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed.

R&D covers both formal R&D in R&D units and informal or occasional R&D in other units.

DEFINING THE R&D SCOPE:

The indicator focuses on mature and non-mature technologies or construction and organizational methodologies that mitigate climate change.

Climate mitigation technologies for the iron and steel sector may include:

  • Waste heat recovery
  • Improving energy efficiency
  • Switching to alternative fuels (including low-carbon H2)
  • Using emerging and innovative technologies
  • Carbon capture and storage (CCS)
  • Carbon capture, utilization and storage (CCUS)
  • Material efficiency that reduce steel demands

R&D expenditures should cover development of concepts and ideas and development of pilot projects. A first environmental balance should demonstrate that the solution reduces the overall CO2 emissions on the life cycle and doesn’t make pollution transfers.

DEFINING ‘MITIGATION R&D’:

The ‘mitigation R&D’ is defined by the categorization employed by IEA report.

DEFINING ‘NON-MATURE R&D’:

A Technology Readiness Level (TRL) should be used to assess the maturity of a technology. Higher scoring levels of this indicator exclude research in technologies that are already considered mature in terms of market penetration, in order to incentivise a focus on those technologies that have a higher need for R&D investment, in order to break through technical barriers and reduce the levelized costs of deploying these technologies

To formalize this distinction in the analysis, the company is asked for a detailed breakdown of R&D expenditure in Section 3 of the data request. Since defining what type of R&D is ‘non-mature’ is theoretically difficult, the classification is inversed, and done based on the principle of exclusion. This methodology excludes only those low-carbon technologies that are considered mature in terms of market position and levelized cost.

The mature and non-mature technologies are defined in Table 17 in chapter 10.3. The table has been made for the year 2020 and is a good indication for the company or the analyst but some technologies that are non-mature today could become mature in the coming years. So the status of the technologies are important to help categorizing them into mature and non mature technology according to the next table :

Table 7: categorization of mature and non-mature technologies

 

 

 

Scoring rationale:

Expenditures over the 3 last years are used for the indicator to consider that expenditure for major R&D projects may not be linear over years.

“The transition to net-zero CO2 emissions requires significant investment in clean energy technologies. Overall investment needs through to 2070 are USD 31 trillion (or 10%) higher in the Sustainable Development Scenario than in the Stated Policies Scenario, and investment in new technologies becomes increasingly important over time. In the 2060s, almost half of total annual average investment is spent on technologies that are at the demonstration or prototype stage today” (16).

(16)  IEA. Energy Technology Pespectives 2020.

5.4.3.2.  IS 3.2 COMPANY LOW CARBON PATENTING ACTIVITY

DESCRIPTION & REQUIREMENTS IS 3.2 COMPANY LOW CARBON PATENTING ACTIVITY
Short description of indicator A measure of the company patenting activity related to low-carbon technologies. The indicator identifies the ratio between the company’s patent activity for the last 5 years and average patenting activity linked to climate change of the sector.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • Patenting activity in climate change mitigation technologies of the company over the last 5 years.
  • Total patenting activity of the company over the last 5 years
How the analysis will be done

1) Past low-carbon patents activity ratio

The assessment is based on the ratio of the company’s patenting activity dedicated to climate change mitigation technologies over the last 5 years to the company’s total patenting activity over the same span of time.

2) Final Score

The ratio will be compared to the maturity matrix developed to guide the scoring and a greater number of points will be allocated for companies indicating a higher level of maturity, which means a higher share in Climate Change Mitigation Technologies (CCMTs) patenting activity.

The matrix is provided below:

 

 

DEFINING CLIMATE CHANGE MITIGATION TECHNOLOGIES PATENTS:

The indicator focuses on patents that mitigate climate change. The European Patent Office (EPO) and the US Patent and Trademark Office (USPTO) have developed a dedicated patent classification scheme (Cooperative Patent Classification - CPC) which details patents for climate change mitigation or technologies: (EPO, 2017)

  • Y02C – Capture, storage, sequestration or disposal of greenhouse gases
  • Y02P – CCMTs relating to production in energy intensive industries
RATIONALE IS 3.2 COMPANY LOW CARBON PATENTING ACTIVITY
Rationale of the indicator

Relevance of the indicator:

The indicator on CCMTs patenting activity is complementary to the one dedicated to R&D in low carbon technologies, as it monitors the technology diffusion whereas R&D expenditures monitor the technology development.

It is included in the ACT IS assessment for the following reasons:

  • To enable the transition, the sector relies heavily on the development of low-carbon solutions to replace its currently high emitting systems
  • Patent data are commensurable because patents are based on an objective standard (OECD 2015)
  • Patent data measure the intermediate outputs of an inventive process, where R&D data expenditures measure the input (OECD 2015)
  • Patent data can be disaggregated into specific technological fields (OECD 2015)

RELEVANCE OF THE INDICATOR’S 5-YEAR TIME HORIZON

Patents applications are typically disclosed 18 months after their filing date (OECD 2015). To avoid the effects of this “publication lag” and smooth the ratio used for the assessment, the indicator monitors the last 5 years of the company’s patenting activity.

Scoring rationale:

Innovation in I&S sector is key for developing low-carbon solutions. These efforts are reflected in patent data. "Evidence from patent data indicates that the steel sector is far from dormant, with significant innovation in terms of both production processes and product characteristics." (quote from OECD Secretary General Angel Gurria at Worldsteel 2017 General Assembly)

 

5.4.4 Sold product performance

 

5.4.4.1.  IS 4.1 Trend in past emissions intensity of purchased crude steel production assets

DESCRIPTION & REQUIREMENT IS 4.1 TREND IN PAST EMISSIONS INTENSITY OF PURCHASED CRUDE STEEL PRODUCTION ASSETS
Short description of indicator A measure of the alignment of the company’s recent purchased crude steel production assets emissions intensity trend with that of its decarbonization pathway. The indicator will compare the gradient of this trend over a 5-year period to the reporting year (reporting year minus 5 years) with the decarbonization pathway trend over a 5-year period after the reporting year.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 0.B: The start and end date for which data is reported for the most recent year – CDP0.2
  • IS 2.A: For all existing and planned assets : Asset name, Geographic Location (country level), Plant type, Technology, Fuel mix , Status, Total capacity (metric tonne), Production (metric tonne), Emissions factor (kg CO2e/tonne crude steel), Year of commissioning, Expected lifetime (years), Decommissioning or modernization year, if planned, Ownership stake (%), Attributable to reporting boundary (%)
  • IS 2.B: The reporter shall provide plant activity and emissions data by plant type for the last five years

External sources of data used for the analysis of this indicator are:

  • IEA ETP (9) – background scenario data
  • SDA (10) – specific benchmark pathway definition
  • IPCC (2006) (11) – Fuel emissions factors
  • Environmental Product Declaration according to ISO 21930:2017 or EN15804+A1:2014 (or EN15804+A2:2019)
  • EN 19694-2 standard.

(9) IEA. Tracking Clean Energy Progress 2017- Energy Technology Perspectives 2017 Exerpt. 2017.

(10) Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

(11). IPCC. IPCC Guidelines for National Greenhouse Gas Inventories, Volume 3, Chapter 2. 2006.

The benchmark indicators involved are:

 

How the analysis will be done

The analysis is based on the comparison between the company’s recent (reporting year minus 5 years) emissions intensity trend gradient (𝐶𝑅’S12) and the company’s decarbonization pathway trend gradient (𝐶𝐵’S12) in the short-term (reporting year plus 5 years).

𝐶𝑅’S12 is the gradient of the linear trend-line of the company’s recent inclusive scope 1+2 emissions intensity (kgCO2/tonne crude steel purchased) over time (𝐶𝑅S12).

𝐶𝐵’S12 is the gradient of the linear trendline of the company benchmark pathway for emissions intensity (kgCO2/tonne crude steel purchased) (𝐶𝐵𝑆12). See section 6. Quantitative benchmarks used for the indicators for details on the computation of the company specific decarbonization pathway.

The difference between 𝐶𝑅’S12 and 𝐶𝐵’S12 will be measured by their ratio (𝑟𝑆12). This is the inclusive scope 1+2 emissions Transition ratio’ which is calculated by the following equation, with the symbol ‘used to denote gradients:

If the transition ratio is a negative number, it means the company’s recent emissions intensity has increased (positive 𝐶𝑅’S12) and a zero score is awarded by default. If the company’s recent emissions intensity has decreased, the transition ratio will be a positive number. A score is assigned as a percentage value equal to the value of 𝑟𝑆12 (1 = 100%).

If no data from the suppliers is provided, the score assigned is 0.

RATIONALE IS 4.1 TREND IN PAST EMISSIONS INTENSITY OF PURCHASED CRUDE STEEL PRODUCTION ASSETS
Rationale of the indicator

Relevance of the indicator:

This indicator is meant to ensure that companies have been investing enough in transitioning their purchased steel to low-carbon steel , in line with their suppliers benchmark.

Trend in past emissions intensity is included in the ACT IS assessment for the following reasons:

  • The trend shows the speed at which the company has been reducing its emissions intensity over the recent past. Comparing this to the decarbonization pathway gives an indication of the scale of the change that needs to be made within the company to bring it onto a low-carbon pathway.
  • While ACT aims to be as future-oriented, it nevertheless does not want to solely rely on projections of the future, in a way that would make the analysis too vulnerable to the uncertainty of those projections. Therefore, this measure, along with projected emissions intensity and absolute emissions, forms part of a holistic view of company emissions performance in the past, present, and future.

Scoring rationale:

For “product shaping” actors, as the main impact of the product comes from the steel they purchased from “steel making” actors, this trend analysis is conducted to compare current data of the company to the past data and improvements that have been made since the past data.

Same rationale as indicator 2.1 for “steel marking” actors.

 

5.4.4.2.  IS 4.2 Purchased product interventions

DESCRIPTION & REQUIREMENT IS 4.2 purchased product interventions
Short description of indicator

An analysis of the company’s reporting of mature interventions to reduce GHG emissions for purchased product determined as being high GHG impact as ferro alloy, electrodes, iron ore, mined coal … relative to the other categories of products relevant to the company.

This indicator also covers crude steel purchased for shaping actors.

Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 4.E: Identify emissions reduction initiatives active in the reporting year [CDP C4.3a + C4.3b + C4.3c]
  • IS 4.F: Quantity of product purchased, CO2 emissions collected from these specific suppliers

External sources of data used for the analysis of this indicator are:

  • Online and press news
  • EU taxonomy for transport (17) – low-carbon vehicles
  • Ferro alloy, graphite for anodes, lime fluxes, iron ore or mined coal (16)

(16)  IEA. Energy Technology Pespectives 2020.

(17) finance, EU technical expert group on sustainable. Final report of the Technical Expert Group on Sustainable Finance and Updated methodology & Updated Technical Screening Criteria. 2020.

How the analysis will be done

To be ready for the transition to a low-carbon economy, iron and steel companies especially the ones who purchase resources that could increase significantly their carbon footprint, as ferro alloy, electrodes, iron ore or mined coal need to plan and carry out “interventions” within the value chain in order to exercise their market position and influence to reduce GHG emissions. The analyst will look at the significant share of CO2 emissions of product purchased. The hotspots are the high emitting products of all product purchased, for example, graphite for anode for EAF facilities.

For all its activity, the company identifies interventions that determine the most ambitious impacts achievable and highlights the GHG hotspots in accordance with best practices.

The analyst compares the interventions reported by the company with this benchmark and against other interventions reported by other reporting companies, whereby the analyst assigns a ‘maturity scoring’ to the reported interventions.

Several measures are combined to assign a score to the intervention. These measures are:

  • Extent size of the intervention
  • Intervention maturity scoring
  • Level of ambition of the intervention
  • Future emissions assessment
  • Transport of material

The maturity matrix used for the assessment is the following:

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

SIGNIFICANCE AND EXTENT OF THE INTERVENTION:

Whether the intervention is large or small in scale affects its overall level of impact on GHG emissions. Large-scale interventions receive more points (e.g. significant interventions covering a high percentage of ferro alloy purchased…)

This assesses how advanced the intervention is relative to current practice, and other elements that can ensure its success like clear goals and measures of success, use of supporting technology, use of certification and verification.

INTERVENTION MATURITY SCORING:

This assesses how advanced the intervention is relative to current practice, and other elements that can ensure its success like clear goals and measures of success, use of supporting technology, use of certification and verification.

LEVEL OF AMBITION:

The company shall report on the level of ambition of the intervention. The first level is an incremental improvement (e.g. GHG reduction). The second level consists of a new development (e.g. new product development, eco design products or installation of a technology to achieve more than 20% of GHG reduction of the purchased ferro alloy). The third level is a breakthrough innovation (e.g. new business model development or installation of a technology to achieve more than 38% of GHG reduction of the purchased ferro alloy on the next 15 years).

The percentage have been setting in accordance with the absolute-based approach of SBTI. This method requires all companies to reduce their own emissions by the same percentage of absolute emission reductions as required for a given scenario (e.g. globally or for a sector). When referring to this method at a global level, the SBTi is currently using the IPCC Special Report on Global Warming of 1.5°C (SR15) for two pathways, a well-below 2°C and a 1.5°C trajectory. This equates to at least a 2.5% absolute reduction per year for well-below 2°C alignment, or a 4.2% absolute reduction per year for 1.5°C alignment. (https://sciencebasedtargets.org/methods/).

Future emissions assessment:

This indicator assesses the communication between the company and the purchased product supplier. This indicator is looking at the data reported between them concerning the carbon intensity data and the data collection and the future CO2 emissions intensity. Robust and certifiable data are more appreciated.

Transport of product purchased:

Even if the transport is a low CO2 hotspot, it is possible to make some actions to improve this step.

RATIONALE IS 4.2 PURCHASED PRODUCT INTERVENTIONS
Rationale of the indicator

Relevance of the indicator:

Ferro-alloys production can be responsible for a significant share of the carbon footprint of high alloy steel (e.g. stainless steel). For chromium steel producers, 65% of steel emissions come from ferro alloy production, as presented in the Figure 5 steel producers shall interact with their ferro alloy suppliers in order to reduce the emissions - they shall demonstrate their willingness to drive their suppliers to reduce their emissions.

The amount of CO2 associated with the BF route is linked with the reduction (see1.1) of iron ore, the pig iron treatment to produce steel in the BOF (Basic Oxygen Furnace) and with energy used in all the process stages itself.

For shaping actors, the crude stale purchased is a very important indicator to reduce the emissions of the sector.

A key issue with the interventions approach is that if interventions have no measurable impact on GHG emissions, they are effectively “greenwash”. However, we recognize that, when attempting to influence GHG emissions outside of direct operations, measurement may be difficult. Barriers to measurement should not be barriers to action, therefore the analysis will consider interventions where the GHG emissions mitigation has not been measured. Nonetheless, companies should describe the rationale for emissions reduction connected to the intervention so that it is clear this potential exists.

The reporting should also include, where possible, enough detail on mitigation potential, and the scale of impact expected, to distinguish between interventions that could be considered greenwash and those with a material, positive climate change mitigation impact.

5.4.5  Management

 

5.4.5.1. IS 5.1 OVERSIGHT OF CLIMATE CHANGE ISSUES

DESCRIPTION & REQUIREMENT IS 5.1 OVERSIGHT OF CLIMATE CHANGE ISSUES
Short description of indicator The company discloses that responsibility for climate change within the company lies at the highest level of decision making within the company structure.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 5.A: Details on where is the highest level of direct responsibility for climate change within the organization - Variation of [CDP C1.1] + [CDP C1.2]
  • IS 5.B: Position of the individual or name of the committee with this responsibility and outline their expertise regarding climate change and the low-carbon transition - Variation of [CDP C1.1a] + [CDP C1.2a]
How the analysis will be done

The benchmark case is that climate change is managed within the highest decision-making structure within the company. The company situation is compared to the benchmark case, if it is similar then points are awarded.

The position at which climate change is managed within the company structure is determined from the company data submission and accompanying evidence.

The maturity matrix used for the assessment is the following:

 

  A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.
RATIONALE IS 5.1 OVERSIGHT OF CLIMATE CHANGE ISSUES
Rationale of the indicator

Successful change within companies, such as the transition to a low-carbon economy, requires strategic oversight and buy-in from the highest levels of decision-making within the company. For the iron and steel sector, a change in strategy and potentially business model will be required and this cannot be achieved at lower levels within an organisation. Evidence of how climate change is addressed within the top decision-making structures is a proxy for how seriously the company takes climate change, and how well integrated it is at a strategic level. High-level ownership also increases the likelihood of effective action to address the low-carbon transition.

Changes in strategic direction are necessarily future-oriented, which fits with this principle of the ACT project.

Management oversight of climate change is considered good practice.

 

5.4.5.2.  IS 5.2 CLIMATE CHANGE OVERSIGHT CAPABILITY

DESCRIPTION & REQUIREMENT IS 5.2 CLIMATE CHANGE OVERSIGHT CAPABILITY
Short description of indicator Company board or executive management has expertise on the science and economics of climate change, including an understanding of policy, technology and consumption drivers that can disrupt current business.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 5B: Identify the position of the individual or name of the committee with this responsibility and outline their expertise regarding climate change and the low-carbon transition - Variation of [CDP C1.1a] + [CDP C1.2a]
How the analysis will be done

The presence of expertise on topics relevant to climate change and the low-carbon transition at the level of the individual or committee with overall responsibility for it within the company is assessed. The presence of expertise is the condition that must be fulfilled for points to be awarded in the scoring.

The analyst determines if the company has expertise as evidenced through a named expert biography outlining capabilities. The analysis is binary: expertise is evident or not. A check is performed against [CDP 3.1 question] on the highest responsibility for climate change, the expertise should exist at the level identified or the relationship between the structures/experts identified should also be evident.

The maturity matrix used for the assessment is the following:

 

RATIONALE IS 5.2 CLIMATE CHANGE OVERSIGHT CAPABILITY
Rationale of the indicator

Effective management of the low-carbon transition requires specific expertise related to climate change and its impacts, and their likely direct and indirect effects on the business. Presence of this capability within or closely related to the decision-making bodies that will implement low-carbon transition both indicates company commitment to that transition and increases the chances of success.

Even if companies are managing climate change at the Board level or equivalent, a lack of expertise could be a barrier to successful management of a low-carbon transition.

This disclosure is in line with Governance (a) of the TCFD: "a) Describe the board’s oversight of climate-related risks and opportunities.”

 

5.4.5.3.  IS 5.3 LOW-CARBON TRANSITION PLAN

DESCRIPTION & REQUIREMENT IS 5.3 LOW-CARBON TRANSITION PLAN
Short description of indicator The company has a plan on how to transition the company to a business model compatible with a low-carbon economy.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 5.C: Details on the organization’s low-carbon transition plan - Variation of [C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C-ST3.1b/C-TO3.1b/C-TS3.1b] + [C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C-ST3.1e/C-TO3.1e/C-TS3.1e]
How the analysis will be done

The analyst evaluates the description and evidence of the low-carbon transition plan for the presence of best practice elements and consistency with the other reported management indicators. The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points are allocated for elements indicating a higher level of maturity.

Among the best practice elements identified to date are:

  • The plan includes financial projections
  • The plan should include cost estimates or other assessment of financial viability as part of its preparation
  • The description of the major changes to the business is comprehensive, consistent, aligned with other indicators
  • Quantitative estimates of how the business will change in the future are included
  • Costs associated with the plan (e.g. write-downs, site remediation, contract penalties, regulatory costs) are included
  • Potential “shocks” or stressors (sudden adverse changes) have been taken into consideration
  • Relevant region-specific considerations are included
  • The plan’s measure of success is SMART - contains targets or commitments with timescales to implement them, is time-constrained or the actions anticipated are time-constrained
  • The plan’s measure of success is quantitative
  • The description of relevant testing/analysis that influenced the transition plan is included
  • The plan is consistent with reporting against other ACT indicators
  • Scope – should cover the entire business, and is specific to that business
  • The plan should cover the short, medium and long terms. From now or the near future <5 years, until at least 2035 and preferably beyond (2050)
  • The plan contains details of actions the company realistically expects to implement (and these actions are relevant and realistic)
  • The plan has been approved at the strategic level within the organisation
  • Discussions about the potential impacts of a low-carbon transition on the current business have been included
  • The company has a publicly acknowledged low-carbon (or beyond) science-based target

The maturity matrix used for the assessment is the following:

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

RATIONALE IS 5.3 LOW-CARBON TRANSITION PLAN
Rationale of the indicator

The iron and steel sector will require substantial changes to its business to align with a low-carbon economy over the short, medium and long term, whether voluntarily following a strategy to do so or if forced to change by regulations (ex: obligations to use waste as alternative fuels) and structural changes to the market (ex: customer demands come from low-carbon solutions). It is better for the success of its business and of its transition that these changes occur in a planned and controlled manner.

The Investor Expectations of Companies in the Construction Materials Sector document (18) specifically states that companies in the sector should develop such a plan.

(18) IIGCC. Investor Expectations of Companies in the Construction Materials Sector. 2019.

This disclosure is in line with Strategy a) and b) of the TCFD: "a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term." and "b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning."

 

5.4.5.4.  IS 5.4 CLIMATE CHANGE MANAGEMENT INCENTIVES

DESCRIPTION & REQUIREMENT IS 5.4 CLIMATE CHANGE MANAGEMENT INCENTIVES
Short description of indicator The Board’s compensation committee has included metrics for the reduction of GHG emissions in the annual and/or long-term compensation plans of senior executives; the company provides monetary incentives for the management of climate change issues as defined by a series of relevant indicators.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 5.D: Whether the company provides incentives for the management of climate change issues, including the attainment of targets? (Same as [CDP C1.3])
  • IS 5.E: Details on the incentives provided for the management of climate change issues (Same as [CDP C1.3a])
How the analysis will be done

The analyst verifies if the company has compensation incentives set for senior executive compensation and/or bonuses, that directly and routinely reward specific, measurable reductions of metric tonne of GHG emitted by the company in the preceding year and/or the future attainment of emissions reduction targets, or other metrics related to the company’s low-carbon transition plan.

The maturity matrix used for the assessment is the following:

 

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all

RATIONALE IS 5.4 CLIMATE CHANGE MANAGEMENT INCENTIVES
Rationale of the indicator

Executive compensation should be aligned with overall business strategy and priorities. As well as commitments to action the company should ensure that incentives, especially at the executive level, are in place to reward progress towards a low-carbon transition. This will improve the likelihood of a successful low-carbon transition.

Monetary incentives at the executive level are an indication of commitment to successful implementation of a low-carbon transition strategy.

 

5.4.5.5. IS 5.5 CLIMATE CHANGE SCENARIO TESTING

DESCRIPTION & REQUIREMENT IS 5.5 CLIMATE CHANGE SCENARIO TESTING 
Short description of indicator Testing or analysis relevant to determining the impact of the transition to a low-carbon economy on the current and projected business model and/or business strategy has been completed, with the results reported to the Board or C-suite (CEO, CFO, etc.), the business strategy revised where necessary, and the results publicly reported.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • IS 5.F: Details on the organization’s climate change scenario testing - Variation of [CDP C3.1a] + [CDP C3.1d]
  • IS 5.G: Consideration of risk types in organization's climate-related risk assessments (CDP C2.2c)
  • IS 5.H: Details of risks identified with the potential to have a substantive financial or strategic impact on business (CDP C2.3a)
How the analysis will be done

The analyst evaluates the description and evidence of the low-carbon economy scenario testing for the presence of best-practice elements and consistency with the other reported management indicators. The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points is allocated for elements indicating a higher level of maturity.

Best-practice elements to be identified in the test/analysis include:

  • full coverage of the company’s boundaries
  • timescale from present to long-term (2035-2050)
  • results are expressed in value-at-risk or other financial terms
  • multivariate: a range of different changes in conditions are considered together
  • changes in conditions are specific to a low-carbon climate scenario
  • climate change conditions are combined with other likely future changes in operating conditions over the timescale chosen

The maturity matrix used for the assessment is the following:

 

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

RATIONALE IS 5.5 CLIMATE CHANGE SCENARIO TESTING 
Rationale of the indicator

Changes predicted to occur due to climate change could have several consequences for the iron and steel sector, including the risk of “stranded assets”, increased costs, a dramatically changed operating environment and major disruptions to the business. There are a variety of ways of analysing the potential impacts of climate-related changes on the business, whether these are slow and gradual developments or one-off “shocks”. Investors are increasingly calling for actions to reduce greenhouse gas emissions across the value chain (see IIGCC investor expectations document for the sector (18)), effective abatement will require a combination of action: improve energy efficiency, use alternative fuels, use clinker substitution, develop new technologies, sell less steel but sell services or advice to use steel in a better way…. These actions should be linked with a strong governance framework to manage physical risks of the sector. The ACT methodology thus provides a broad definition of types of testing and analysis that can be relevant to this information requirement, to identify both current and best practices and consider them in the assessment.

Risk management plan is an important management tool for preparing for the low-carbon transition. For businesses likely to be strongly affected by climate change impacts (both direct and indirect), and businesses with large fixed asset bases and long management horizons, such as the iron and steel sector, it has even greater importance.

This disclosure is in line with Disclosure c) of the TCFD:  "c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario".

5.4.6 Supplier engagement

The suppliers for the iron and steel industry vary considerably depending on the structure of the company and its activities. This module aims at assessing the actions of companies on their suppliers including transport suppliers.

No specific sub-dimensions are given for the two indicators, but a global evaluation should be used to rate the level of the company. The analyst should make sure to identify the most important suppliers in the company’s supply chain. This identification is necessary to give recommendations on where emissions could be lowered.

The steel producers could use the wood as a resource in their process. They should demonstrate than the wood will follow a sustainable management to encourage sustainable wood purchases and sustainable management about wood purchased and their supplies do not participate to deforestation.

 

5.4.6.1.  IS6.1 Strategy to influence suppliers to reduce their GHG emissions

DESCRIPTION & REQUIREMENT IS6.1 STRATEGY TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS
Short description of indicator The company has a strategy, ideally governed by policy and integrated into business decision making, to influence, enable, or otherwise shift suppliers’ choices and behaviour in order to reduce GHG emissions.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • Details of the methods of supplier engagement, strategy for prioritizing supplier engagements and measures of success - Part of [CDP C12.1a]
  • Number of suppliers with whom the company is engaging, the proportion of the total spend that they represent, part of the inclusive scope 1+2 carbon emissions. Variation of [CDP C12.1a]
  • If data on suppliers’ GHG emissions and climate change strategies are available, explain how the company makes use of that data- Variation of [CDP C12.1a]

OR/AND

List of environmental contract clauses in purchasing & suppliers’ selection process

Wood sustainable management initiative mostly known are PEFC and FSC.

How the analysis will be done

The assessment will assign a maturity score based on the company’s formalized strategy with their suppliers, expressed in a maturity matrix.

A company that is placed in the ‘aligned’ category will receive the maximum score. Companies who are at lower levels will receive a partial score, with 0 points awarded for having no engagement at all.

This maturity matrix is indicative but does not show all possible options that can result in a particular score. Companies responses will be scrutinized by the analyst and then placed on the level in the matrix where the analyst deems it most appropriate.

Maturity matrix is based on following questions:

  • What is the scope of the action levers used?
  • What action levers are used by the company to encourage suppliers to develop low-carbon offer?
  • To what extent carbon issues are integrated in the selection process of suppliers?
  • To what extent GHG emissions reduction issues are integrated in engagement with suppliers?

No specific sub dimensions are given but a global evaluation should be used to rate the level of the company. The analyst should pay attention to identify the most important suppliers in the company’s global carbon emissions. This identification is necessary to give recommendations.

 

  A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.
RATIONALE IS6.1 STRATEGY TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS
Rationale of the indicator

Since the raw material being used is linked to the environmental performance of the final steel product, suppliers have to be involved in the strategy action plan of the company, regardless of whether raw materials that has been bought. Due to its consideration in the target calculations, the choice of sustainable purchased product is an important lever to help the company to apply its low-carbon transition.

Supplier engagement is included in the ACT IS assessment for the following reasons:

  1. Given their size and their decision-making power in the value chain, integrated companies have the ability to influence the strategy and performance of suppliers regarding climate.
  2. The upstream segment represents a high source of emissions throughout the value chain and should be engaged. Direct emissions at the blast furnace represent about half of the cradle-to-gate emissions for pig iron production. If coke and sinter are also produced in the same plant, Scope 1 emissions from the plant represent about 70% of the total emissions (1,14 kg CO2 / kg pig iron). The rest of the emissions comes from the production and preparation of other materials (mainly iron ore and pellet, hard coal and quicklime).This analysis has been calculated from the data for the average global pig iron production according available in the 3.6, cut-off database ecoinvent database.
  3. Engaging suppliers through contract clauses and sales incentives is necessary to take them on board.

SCORING THE INDICATOR:

Because of data availability and complexity, a direct measure of the outcome of such engagement is not very feasible at this time. It is often challenging to quantify the emissions reduction potential and outcome of collaborative activities with the supply chain. Therefore, the approach of a maturity matrix allows the analyst to consider multiple dimensions of supplier engagement and assess them together towards a single score for Supplier Engagement.

 

5.4.6.2.  IS6.2 Activities to influence suppliers to reduce their GHG emissions

DESCRIPTION & REQUIREMENT IS6.2 ACTIVITIES TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS
Short description of indicator This indicator assesses the level of engagement that the company has with its suppliers, based on an assessment of previous initiatives that show whether or not the company engages with suppliers in various ways.
Data requirements

The questions comprising the information request that are relevant to this indicator are:

  • List of initiatives implemented to influence suppliers to reduce their GHG emissions, green purchase policy or track record, supplier code of conduct
How the analysis will be done

Maturity matrix is based on following questions:

  • How the company encourage suppliers to reduce their GHG emissions?
  • Does the company develop a low-carbon demand?

The maturity matrix used for the assessment is the following:

 

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

Rationale IS6.2 ACTIVITIES TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS
Rationale of the indicator

Activities to influence suppliers are included in the ACT OG assessment for the following reasons:

  1. Given their size and their decision-making power in the value chain, integrated companies have the ability to influence the strategy and performance of suppliers regarding climate.
  2. The upstream segment represents a high source of emissions throughout the value chain and should be engaged.
  3. Engaging suppliers through contract clauses and sales incentives is necessary to take them on board.

SCORING THE INDICATOR:

Because of data availability and complexity, a direct measure of the outcome of such engagement is not currently feasible. It is often challenging to quantify the emissions reduction potential and outcome of collaborative activities along the supply chain. Therefore, the approach of a maturity matrix allows the analyst to consider multiple dimensions of supplier engagement and assess them together towards a single score for Supplier Engagement.

 

5.4.7 Client engagement

 

5.4.7.1.  IS7.1 Strategy to influence customer behaviour to reduce ghg emissions

DESCRIPTION & REQUIREMENTS IS7.1 STRATEGY TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE GHG EMISSIONS
SHORT DESCRIPTION OF INDICATOR The company has a strategy, ideally governed by policy and integrated into business decision-making, to influence, enable, or otherwise shift customer choices and behaviour in order to reduce GHG emissions.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS7.A (methods of client engagement) [C12.1b]
  • IS7.B (% of customers) [C12.1b]
HOW THE ANALYSIS WILL BE DONE

The analyst checks if the policy or strategy exists and analyses if it targets customer behaviour through specific actions undertaken by the company. The strategy must mention whether:

  • GHG emissions reduction are part of the goal, scrap reduction too.
  • Customers are engaged either through education or information sharing, or through collaboration & innovation.
  • Whether it is an active rather than a reactive strategy: a reactive strategy responds only to customer demand for more low-carbon systems and services, whereas an active strategy attempts to change the existing customer demand towards low-carbon alternatives.
  • If it is widespread: the strategy must apply to most customers.

Maturity matrix is built as following:

 

Scoring

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

Rationale IS7.1 STRATEGY TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE GHG EMISSIONS
RATIONALE OF THE INDICATOR

RELEVANCE OF THE INDICATOR:

Strategy to influence consumer behaviour to reduce GHG impacts is included in the analysis for the following reasons:

  1. Given their size and their decision-making power in the value chain, integrated companies have the ability to influence the strategy and performance of clients regarding climate.
  2. The downstream segment represents the largest source of emissions throughout the value chain and should be engaged.

Scoring rationale:

The scoring of elements in the way that it is presented is similar to the CDP scoring methodology, whereby a narrative answer that details a certain strategy is checked for whether it includes certain elements that the ACT assessment deems vital for any sound customer engagement strategy.

 

5.4.7.2.  IS7.2 Activities to influence customer behaviour to reduce ghg emissions

DESCRIPTION & REQUIREMENTS IS7.2 ACTIVITIES TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE GHG EMISSIONS
SHORT DESCRIPTION OF INDICATOR The company participates in activities, to influence, enable, or otherwise shift customer choices and behaviour in order to reduce GHG emissions, scrap reduction, sorting and recycling.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS7.D (reported activities or interventions)
HOW THE ANALYSIS WILL BE DONE

The analyst assigns a maturity score based on the company’s demonstration of engagement with its customers, expressed in a maturity matrix. This indicator takes a holistic viewpoint on the interventions reported and assesses how together they paint a picture of the company’s level of active engagement with their customers.

It uses a maturity matrix to cover different types of activities under one score. The level that the company has achieved is determined by the analyst after reviewing all the information provided on the value chain interventions.

Successive levels into this matrix represent a more advanced level of engagement that works towards a collaborative effort of decarbonizing the iron and steel sector and assumes that the actions in the previous level are also part of the company’s engagement.

Maturity matrix is built as following:

 

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

Rationale IS7.2 ACTIVITIES TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE GHG EMISSIONS
RATIONALE OF THE INDICATOR

RELEVANCE OF THE INDICATOR:

While measurement of strategy as in IS7.1 is important, measuring activities and their outcome is more insightful with regards to the company’s actual emissions reduction activities in the supply chain. Because of the difficulty in measuring this, the ACT assessment uses this maturity matrix approach that has been piloted by several other institutions (see scoring rationale) to fill this gap in indicators IS6.2 and IS7.2.

Scoring rationale:

Because of data availability and complexity, a direct measure of the outcome of supply chain engagement activities is not very feasible at this time. Therefore, the approach of a maturity matrix allows the analyst to consider multiple dimensions of client engagement and analyse them together towards a single score. This approach has been used before by several institutions that attempt to make measurements of progress in the complex and multidimensional industry sectors.

 

5.4.8  Policy engagement

 

MODULE RATIONALE

For the iron and steel sector, the policy should require setting up the best existing plants emissions (Adopts Best Available Technologies (BAT) when modernize, purchase or design a new plant.

The policy should also require LCA of product to assess their CO2 performance relative to the product functions [Worldsteel, STEEL’S CONTRIBUTION TO A LOW CARBON FUTURE AND CLIMATE RESILIENT SOCIETIES, 2020]. As Angel Gurría, OECD Secretary-General, said in his speech of 16 October 2017« For the steel sector, policymakers should ensure that the right framework conditions and incentives are in place so that companies focus and invest more on product quality and industrial upgrading as well as the identification of new market opportunities »

Policy mechanisms should be established which ensure an international competitive level playing field between the different steel producing regions in order to avoid the risk of carbon leakage. Some regulations have been set in some regions of the world, as EU-ETS in EU, but it could be criticize in some others regions because EU-ETS is looking only at direct emissions, and does not help materials circularity even if circularity could be done locally.

From the IEA analysis, “governments have an outsized role to play in supporting transitions towards net-zero emissions. Long-term visions need to be backed up by detailed clean energy strategies involving measures that are tailored to local infrastructure and technology needs. Effective policy toolkits must address five core areas:

  • Tackle emissions from existing assets
  • Strengthen markets for technologies at an early stage of adoption
  • Develop and upgrade infrastructure that enables technology deployment
  • Boost support for research, development and demonstration
  • Expand international technology collaboration.

In addition, policy makers can promote CO2 emissions reduction efforts by adopting mandatory reduction policies, such as a gradually increasing carbon price or tradeable industry performance standards that require average CO2 intensity for production of each key material to decline across the economy and permit regulated entities to trade compliance credits.”

 

5.4.8.1. IS8.1 Company policy on engagement with trade associations

DESCRIPTION & REQUIREMENTS IS8.1 COMPANY POLICY ON ENGAGEMENT WITH TRADE ASSOCIATIONS
SHORT DESCRIPTION OF INDICATOR The company has a constructive policy on what action to take when industry organisations in which it has membership are found to be opposing ‘climate-friendly’ policies.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS8.A: The company shall disclose if it has a policy to govern action when trade associations supported take positions on legislation that could hinder progress on transition to a low-carbon economy, and if this policy is public
  • IS8.B: If it has a policy as outlined at IS8.A, the company shall describe this policy including the following details: Include [CDP C12.3f]
  • IS8.E: The company should attach supporting documentation, if this exists, giving evidence
HOW THE ANALYSIS WILL BE DONE

The analyst evaluates the description and evidence of the policy on trade associations and climate change for the presence of best-practice elements and consistency with the other reported management indicators. The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points are allocated for elements indicating a higher level of maturity.

Best practice elements to be identified in the test/analysis include:

  • Having a publicly available policy in place
  • The scope of the policy covers the entire company and its activities, and all group memberships and associations
  • The policy sets out what action is to be taken in the case of inconsistencies
  • The action carries the option to terminate membership of the association
  • The action carries the option of publicly opposing or actively countering the association’s position
  • Responsibility for oversight of the policy lies at the top level of the organisation
  • Presence of a process to monitor and review trade association positions

The maturity matrix used for the assessment is the following:

 

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

RATIONALE IS8.1 COMPANY POLICY ON ENGAGEMENT WITH TRADE ASSOCIATIONS
RATIONALE OF THE INDICATOR

See also the module rationale.

Trade associations are a key method by which companies can influence policy on climate indirectly. Thus, where trade associations take positions that are negative for the climate, companies need to take action to ensure that this negative influence is countered or minimised. Transparency about public policy is a specific request of the Investor Expectations report (18).

 

5.4.8.2.  IS8.2 Trade associations supported do not have climate-negative activities or positions

DESCRIPTION & REQUIREMENTS IS8.2 TRADE ASSOCIATIONS SUPPORTED DO NOT HAVE CLIMATE-NEGATIVE ACTIVITIES OR POSITIONS
SHORT DESCRIPTION OF INDICATOR The company is not on the Board or providing funding beyond membership of any trade associations that have climate-negative activities or positions. It should also be considered if the company is supporting trade associations with climate-positive activities and/or positions.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS8.C: The company shall disclose if (yes or no) it is on the board of any trade associations or provides funding beyond membership. Same as [CDP C12.3b]
  • IS8.D "If yes, the reporter shall provide details of those trade associations that are likely to take a position on climate change legislation. Same as [CDP C12.3c]
  • IS8.E: The company should attach supporting documentation, if this exists, giving evidence

External sources of data shall also be used for the analysis of this indicator:

HOW THE ANALYSIS WILL BE DONE

The list of trade associations declared in the CDP data and other external sources entries relating to the company is assessed against a list of associations that have climate-negative activities or positions. The results will be compared to any policy described in IS8.1.

If the company is part of trade associations that have climate-positive activities and/or positions, this should be considered for the analysis.

The maturity matrix used for the assessment is the following:

 

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

RATIONALE IS8.2 TRADE ASSOCIATIONS SUPPORTED DO NOT HAVE CLIMATE-NEGATIVE ACTIVITIES OR POSITIONS
RATIONALE OF THE INDICATOR

See also the module rationale.

Trade associations are a key instrument by which companies can indirectly influence policy on climate. Thus, participating in trade associations that actively lobby against climate-positive legislation is a negative indicator and likely to obstruct the low-carbon transition.

 

5.4.8.3.  IS8.3 Position on significant climate policies

DESCRIPTION & REQUIREMENTS IS8.3 POSITION ON SIGNIFICANT CLIMATE POLICIES
SHORT DESCRIPTION OF INDICATOR The company is not opposed to any significant climate relevant policies and/or supports climate friendly policies.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS8.E: The company should attach supporting documentation, if this exists, giving evidence
  • IS8.F: "The company shall disclose details of the issues on which it has been directly engaging with policy makers and its proposed legislative solution. Same as [CDP C12.3a]

External sources of data shall also be used for the analysis of this indicator (e.g. RepRisk database, press news, actions in standard development).

HOW THE ANALYSIS WILL BE DONE

The analyst evaluates the description and evidence on the company’s position on relevant climate policies for the presence of best practice elements, negative indicators and consistency with the other reported management indicators. The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points will be allocated for elements indicating a higher level of maturity.

Maturity matrix contents include (in order of increasing maturity):

  1. The company publicizes direct opposition to climate policy (e.g. direct statement issued or given by a company representative in a speech or interview) or reported direct opposition to climate policy (third-party claims are found)
  2. Reported indirect opposition to climate policy (e.g. a via trade association or in standards development)
  3. No reports of any opposition to climate policy
  4. Reported direct support to relevant significant climate policy can be found
  5. The company publicly supports relevant significant climate policies

The maturity matrix used for the assessment is the following:

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

RATIONALE IS8.3 POSITION ON SIGNIFICANT CLIMATE POLICIES
RATIONALE OF THE INDICATOR

See also the module rationale.

Policy and regulation that acts to promote transition to a low-carbon economy is key to the success of the transition. Companies should not oppose effective and well-designed regulation in these areas but should support it.

 

5.4.9  Business model

 

MODULE RATIONALE

In addition to developing low-carbon steel, a company may transition its business model to other areas to remain profitable in a low-carbon economy. The company’s future business model should enable it to decouple financial results from GHG emissions, in order to meet the constraints of a low-carbon transition while continuing to generate value. The business model shifts identified do not conflict with the changes that are implied by decarbonizing the company’s production and sales.

These indicators aim to identify both relevant current business activities and those still at a burgeoning stage. It is recognized that transition to a low-carbon economy, with the associated change in business models, will take place over several years. The analysis will thus seek to identify and reward projects at an early stage as well as more mature business activities, although the latter (i.e. substantially sized, profitable, and/or expanding) business activities will be better rewarded.

A variety of sources have been consulted to develop a comprehensive review of the challenges facing the iron and steel sector in relation to the low-carbon transition. Several opportunities for the sector have been identified which the ACT initiative has formatted under a taxonomy for reporting the development of business activities connected to them. The main reference sources for building these indicators are extracted from the literature and from exchanges with the experts during the methodology development process.

Climate scenarios can identify shifts in modes of construction and use of the buildings that will foster the transition to a low-carbon economy. Companies committed to adapting their business to these predicted changes will be better positioned to take advantage of associated opportunities and successfully transition to a low-carbon economy.

Scoring

The maturity matrix used for the assessing all indicators in this module is the following:

  Basic Advanced Low-carbon aligned  
Associated score 0% 50% 100% Sub score
Profitability of business model Non estimated or in a very early stage of development (research or conception stage) Mature business model but non profitable or in a development stage (prototype / demonstration or test) Mature and profitable business model 25%
Size of business model Non estimated Limited size of business for the company (few FTE or time dedicated, small turnover, few revenues expected, etc.) Substantial size of market for the company (significant number or FTE or dedicated hours, great turnover, great anticipated profitability, etc.) 25%
Growth potential of business model Non estimated or exploration of the business model interrupted Scheduling next development steps Scheduling the expansion of the target or size of the business model 25%
Deployment schedule of business model Non scheduled Deployment scheduled with a 2 years horizon or less Deployment scheduled with a 2 years horizon or more 25%

A company that is placed in the ‘Low-carbon aligned’ category receives the maximum score. Companies that are at lower levels receive a partial score, with 0 points awarded for having no engagement at all.

When several business models are implemented, only the advanced one is assessed for the final score calculation.

 

5.4.9.1.  IS9.1 Business activities that increase the use of low carbon energy

DESCRIPTION & REQUIREMENTS IS9.1 Business activities that increase the use of low carbon energy
SHORT DESCRIPTION OF INDICATOR The company is actively developing business models for a low-carbon future and participating in business activities that increase the use of energy efficiency or the use of low carbon energy
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS9.A: Business model subcategory, Description of business activity, Stage of development, Activity timeframe, Indicator of business size (over activity timeframe), Business size, What are your future plans for this activity?, What is your deployment timeframe ?, How do you manage this business plan deployment ?
HOW THE ANALYSIS WILL BE DONE

The analysis is based on the company’s degree of activity in one of the future business model areas used to benchmark.

Relevant business activity areas for this indicator are, for example:

  • Switch to low-carbon electricity (use of renewables)
  • Switch to the use of biofuels
  • Hazardous & Non-hazardous waste treatment (use as fuel)
  • Hydrogen DRI (using low or zero GHG hydrogen)
  • Hydrogen replacement of natural gas in DRI-EAF
  • ..

Calculation of the score:

In order for companies to align with a low-carbon future and meet the future construction needs, it is expected that they pursue at least one of these future business model pathways and integrate them into their strategic plans. The analyst evaluates the description and evidence of the company’s degree of activity in one of the future business model areas for the presence of best practice elements and consistency with the other reported management indicators. The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points are allocated for elements indicating a higher level of maturity.

The minimum requirement for points to be awarded is that some level of exploration of one or more of these relevant business areas has started. This could include participation in collaborations, pilot projects, or research funding.

Best practice elements to be identified in the test/analysis include:

  • the company has developed a mature business model that integrates one or many of the above elements
  • the business activity is profitable
  • the business activity is of a substantial size
  • the company is planning to expand the business activity
  • expansion will occur on a defined timescale

Maximum points are awarded if all these elements are demonstrated.

When several business models are implemented, only the advanced one is assessed for the final score calculation.

RATIONALE IS9.1 Business activities that increase the use of low carbon energy
RATIONALE OF THE INDICATOR See the module rationale.

 

5.4.9.2.  IS 9.2 Business activities around steel circularity (e.g.: end of life collection, circular economy, material efficiency,…) and low-carbon optimization of steel services with an equivalent performance

DESCRIPTION & REQUIREMENTS IS9.3 Business activities around steel circularity (e.g.: end of life collection, circular economy, material efficiency,…) and low-carbon optimization of steel services with an equivalent performance 
SHORT DESCRIPTION OF INDICATOR The company is actively developing business models around circular economy, in participating in business activities associated with collecting, reuse and recycling of material. In addition, the company is actively working on improving design and use of their product that could increase the lifetime or environmental performance of the systems with equivalent or better performance
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS9.A: Business model subcategory, Description of business activity, Stage of development, Activity timeframe, Indicator of business size (over activity timeframe), Business size, What are your future plans for this activity? What is your deployment timeframe? How do you manage this business plan deployment?
HOW THE ANALYSIS WILL BE DONE

Relevant business activity areas for this indicator are for example

  • Increase steel waste collection
  • Improve systems of collection of end-of-life materials (eg. careful separation of iron and steel when buildings are demolished)
  • Increase the use of scrap steel in new available products
  • Reduce new scrap creation by better product design (eg. 3D printing and powder metallurgy)
  • Product designs and end-of-life recycling processes that make it easier to separate copper from steel (to avoid copper contamination)
  • Redesign products for materials efficiency and circularity
  • More intensive use of steel-based products (e.g sharing)
  • Develop metallurgy to enable higher-quality and higher-value recycling of steel
  • Production of high-performance steel to increase the lifecycle of the end-product
  • Work on steel with higher performance
  • Increase lifetime of final products

The calculation of the score is the same as in the IS9.1 indicator.

RATIONALE IS9.2 Business activities around steel circularity (e.g.: end of life collection, circular economy, material efficiency,…)
RATIONALE OF THE INDICATOR See the module rationale.

 

5.4.9.3.  IS 9.3 Business activities related to synergies with other industries (CCU/CCS, H2 or exhaust gas networks, chemical industry, cement industry ...)

DESCRIPTION & REQUIREMENTS IS 9.3 Business activities related to synergies with other industries (CCU/CCS, H2 or exhaust gas networks, chemical industry, cement industry ...)
SHORT DESCRIPTION OF INDICATOR The company is actively developing business models around circular economy, in participating in business activities related to create synergies with other industries.
DATA REQUIREMENTS

The questions comprising the information request that are relevant to this indicator are:

  • IS9.A: Business model subcategory, Description of business activity, Stage of development, Activity timeframe, Indicator of business size (over activity timeframe), Business size, What are your future plans for this activity? What is your deployment timeframe? How do you manage this business plan deployment?
HOW THE ANALYSIS WILL BE DONE

Relevant business activity areas for this indicator are for example

  • Development of CCU/CCS complete solutions: the analyst should pay attention to the product manufactured by CCU selling
  • Development of H2 or, if not valorisation on-site possible, exhaust gases network to be used outside of the plant (in other industries or cities networks or to communities)
  • Valorise by products as slags or carbon captured in chemical or cement industry
  • Develop more functionalities out of the steel by-products / scrap generated during the steel making step

The calculation of the score is the same as in the IS9.1 indicator.

RATIONALE IS 9.3 Business activities related to synergies with other industries (CCU/CCS, H2 or exhaust gas networks, chemical industry, cement industry ...)
RATIONALE OF THE INDICATOR See the module rationale.

 

6 Assessment

 

6.1 Sector benchmark

The mechanism allocation is taken from the sectoral decarbonization approach (SDA (10)) to science-based targets.

The sectoral pathway used is the one described in the IEA ETP 2020 Sustainable Development Scenario.

The iron and steel company production emissions benchmark (CBG as in the indicator calculation) is the company’s allocated decarbonization pathway, it is calculated from the sectoral decarbonisation pathway.

6.1.1 Description of the benchmark

The fundamental target to achieve for all organizations is to contribute to not exceeding a threshold of 2⁰C global warming compared to pre-industrial temperatures. This target has long been widely accepted as a credible threshold for achieving a reasonable likelihood of avoiding climate instability, while a 1.5⁰C rise has been agreed upon as an aspirational target.

As a consequence, low carbon scenarios used for the benchmark are Well Below 2°C scenarios or 1.5°C scenarios.

Every company shall be benchmarked according to an acceptable and credible benchmark that align with spatial boundary of the methodology. All steel maker companies shall be benchmarked to the global pathway for all technical routes as well as to the technical route-specific pathway. Product shaping companies will be benchmarked to steel product shaping pathway.

Later in the chapter, the reference pathway definition and classification are presented.

6.1.2 Mechanism to compute the company benchmark

The allocation mechanism chosen, as defined in the SDA, is the convergence mechanism. This allocation takes the company’s emissions intensity in the initial year and converges it to the sector’s emissions intensity in 2050 at a rate that ensures that the corresponding sectoral carbon budget is not exceeded.

The next figure illustrates the mechanism.

 

Figure 13 : Convergence mechanism illustration

 

Thus, companies starting from a lower intensity will have a shallower decarbonization pathway than companies starting from a higher intensity. In this way, past action or inaction to reduce intensity is incorporated.

For the product shaping segment, there are strengths and weaknesses to choose this mechanism. The strengths are a better comparative assessment with the other actors as iron and steel making actors and integrated actors because it enables addition between the intensity. And also, by asking them a higher effort for a low-carbon transition because it puts a higher burden on companies with more intensive asset bases. The weaknesses are the input data, intensity unit is « input unit » (crude steel) and not output product. Finally, convergence for product shaping actors would be less meaningful if there are very diverse product shaping mix (with different intensities).

 

6.1.3  Reference pathway classification

A reference pathway defines the carbon intensity (kgCO2/tonne crude steel produced or processed) pathway for a given company type.

For the Iron and Steel sector we consider the following types of pathways:

  • A Global Pathway for the steel making (integrated and steel making only) companies
  • 5 technical route-specific pathways for the steel making companies:
    • BF-BOF pathway
    • SR-BOF pathway
    • DRI-EAF pathway
    • Scrap-EAF pathway
    • Cast Iron pathway
  • A pathway for the product shaping companies

 

6.1.4 Available reference pathways

The available pathway that will be used as the basis for the methodology development of the above pathways is the one described in the IEA ETP 2020 Sustainable Development Scenario presented in Figure 14.

 

Figure 14: IEA direct and indirect CO2 emissions for crude steel for stated policies scenario and sustainable developement scenario (sds)

 

 

The ETP pathway shows the direct and indirect emissions (scope 1 and 2) evolution in the sustainable development scenario. Figure 15 is a view of the calculated pathway for I&S methodology from IEA ETP 2020 Sustainable Development Scenario.

Figure 15: calculated pathway from IEA ETP 2020 SDS for crude steel

 

The scenario per routes will be added in the methodology document as soon as IEA will release them. [to be completed].

 

6.2 Benchmarks used for indicators

 

The following table lists the benchmarks used for the quantitative indicators and their sources:

Table 8: BENCHMARKS FOR THE INDICATORS

Benchmark Parameter Source Indicator relevance
Company and sector benchmark

Production Emissions:

scope 1+2

CBG

IEA ETP 2020 (16) - background scenario data

SDA (10) – specific benchmark pathway definition

Worldsteel data collection (20)

(20) World Steel Association. CO2 emissions data collection, User guide, version 7. [Online] 25 May 2015. 

IS1

IS2

IS4

R&D benchmark for iron and steel technology TRL

Maturity of technology – TRL

IEA ETP 2020 (16) and IEA website

IIPI network website http://www.iipinetwork.org/wp-content/Ietd/content/iron-and-steel.html

IS3
Management benchmark TCFD   IS5
Average lifetime of assets  

“The EII (Energy Intensive Industries) are highly capital-intensive with an average investment cycle of 20 to 30 years hence they need predictability of energy costs so as to limit investment risks. “ - COMMUNICATION FROM THE COMMISSION TO THE PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THECOMMITTEE OF REGIONS - Action Plan for a competitive and sustainable steel industry in Europe – 2013

“Evolution of any new technology is a long drawn process. It may take about 5~20 years and beyond to achieve maturity of a concept/idea.” & “Renovate/ modify obsolete facilities/machinery put up in the last 20 years” - REPORT OF THE WORKING GROUP ON STEEL INDUSTRY FOR THE TWELFTH FIVE YEAR PLAN (2012 – 2017) – 2011 (Indian Iron and Steel Industry)

IS2
Business model  

Worldsteel indicators and figures (21) (22)

Ellen Macarthur Foundation (19)

Material Economics (23)

IEA ETP 2020 (16)

(19) Ellen Macarthur Foundation, Material Economics. Completing the picture how the circular economy tackles climate change. 2019.

(21) World steel in figures. [Online] 2019. 

(22) Sustainability indicators 2003 - 2018. [Online] January 2020. 

(23) Material Economics. Industrial transformation 2050 - Pathways to Net-Zero Emissions from EU Heavy Industry. 2019.24. Mapping the Global Flow of Steel: From Steelmaking to End-Use Goods. Cullen, Jonathan M., Allwood, Julian M. et Bambach, Margarita D. 

IS9

 

6.3 Weightings 

The selection of weights for both the modules and the individual indicators was guided by the principles of value of information, impact of variation, future orientation and data quality sensitivity (see ACT framework (1)). The ACT Guidance (8) gives percentage ranges for the modules.

Table 9: PERFORMANCE INDICATOR WEIGHTINGS

 

For integrated and iron and steel making only actors, the quantitatively scored modules (Targets, Material investment, Intangible investment, Sold Product Performance) carry 67% of the final weight, and the qualitatively scored modules (Management, Policy engagement, Business model) carry 33%.

For product shaping only actors, the quantitatively scored modules (Targets, Material investment, Intangible investment, Sold Product Performance) carry 60% of the final weight, and the qualitatively scored modules (Management, Policy engagement, Business model) carry 40%. The indicators within the modules also carry their own weighting.

Table 10 : module weightings

  INTEGRATED IRON AND STEEL MAKING ONLY PRODUCT SHAPING ONLY      
Modules Weight Rationale Weight  Rationale Weight Rationale
1. Targets (15%) 15% Fixed weight across all sectors 15% Fixed weight across all sectors 15% Fixed weight across all sectors
2. Material Investment (0 to 35%) 32% Owned assets (production infrastructure) represent a high source of emissions 32% Owned assets (production infrastructure) represent a high source of emissions. 10% Owned assets do not represent a high source of emissions
3. Intangible Investment (1-10%) 10% R&D investments for low-carbon innovation are crucial for the value chain 10% R&D investments for low-carbon innovation are crucial for the value chain 2% R&D investments for low-carbon innovation exist but not crucial for the value chain
4. Sold Product Performance (0 to 35%) 10% Raw materials are critical 10% Raw materials are critical 32% The upstream emissions represent a large part of emissions and can be assessed through the sold performance module.
5. Management (10%) 10% Fixed weight across all sectors 10% Fixed weight across all sectors 10% Fixed weight across all sectors
6. Supplier (1-10%) 2% Suppliers for Upstream are not strategic, compared to the rest of the value chain. 2% Suppliers for Upstream are not strategic, compared to the rest of the value chain. 10% High level of influence on the upstream
7. Client (1-10%) 6% Improvement potential by working with client on the right steel for the right application (including reducing scrap production and increasing scrap recycling) 6% Improvement potential by working with client on the right steel for the right application 6% Improvement potential by working with client on the right steel for the right application
8. Policy engagement (1-10%) 5% Average weight compared to the other sectors 5% Average weight compared to the other sectors 5% Average weight compared to the other sectors
9. Business Model (10%) 10% Fixed weight across all sectors 10% Fixed weight across all sectors 10% Fixed weight across all sectors

6.3.1 Rationale for weightings

The selection of weights for both the modules and the individual indicators was guided by a set of principles. These principles helped define the value of the indicators.

Principle Explanation
Value of information The value of the information that an indicator gives about a company’s outlook for the low-carbon transition is the primary principle for the selection of the weights.
Impact of variation A high impact of variation in an indicator means that not performing in such an indicator has a large impact on the success of a low-carbon transition, and this makes it more relevant for the assessment.
Future orientation Indicators that measure the future, or a proxy for the future, are more relevant for the ACT assessment than past & present indicators, which serve only to inform the likelihood and credibility of the transition.
Data quality sensitivity Indicators that are highly sensitive to expected data quality variations are not recommended for a high weight compared to other indicators, unless there is no other way to measure a dimension of the transition.

According to the exchange with the TWG and the bibliography work for the iron and steel sector, weightings have been defined as below:

Targets 15%

Description of the weighting for:

  • integrated actors

Description of the weighting for:

  • iron and steel making only actors
  • product shaping only actors
For integrated actors, each indicator is doubled to be added for each segment. The weights for each indicator presented for other actors are divided by two. The targets module has a relatively large weight of 15%. Most of it is placed on the ‘alignment of Scope 1+2 emissions reduction targets’ with 10%. The ‘time horizon of targets’ have a medium weight of 3%. The ‘time horizon of targets’ is a proxy of how forward-looking the company is, which is very long-term oriented. Finally, the ‘achievement of previous targets’ indicator measures the company’s past credentials on target setting and achievement, which provides more contextual information on the company’s ability to meet ambitious future targets. 2% score is attributed to this indicator.

Material Investment

Total weighting for the module: 32%

Description of the weighting for

  • integrated actors
  • iron and steel making only actors

Total weighting for the module: 10%

Description of the weighting for

  • product shaping only actors

Manufacturing iron and steel requires high and long-term investment with best available technologies. Roadmaps specific to the iron and steel sector show that resources and energy efficiency are key for low-carbon transition.

This is the primary module that assesses the development of the company’s assets, and how these existing assets influence the likelihood of a low-carbon transition. In the short-term, the company’s current portfolio and confirmed planned assets are used to generate an estimate of the company’s “trend in future emissions intensity”. As this is a direct measurement of the decarbonization pathway, with a high impact of variation, and which looks to the future, it receives a weighting of 6%.

The “locked-in emissions” indicator uses the same information but tries to measure the amount of GHG emissions that the company has already committed from its individual carbon budget. This means it is also very future oriented and receives a weight of 5%. Finally, the “trend in past emissions intensity” is an indication of the ‘adjustment’ that the company must make to place itself on a low-carbon pathway. 4% score is attributed to this indicator.

“Co-products/waste reduction and reuse activities” is important as a management indicator because the best practices is first to reduce the flows and then to reuse them.

This module needs to encourage actors to have best practices and justifies the weighting of the indicator to be 7%.

As owned assets do not represent a high source of emissions, only 10% is attributed to the total module.

The indicator “trend in future emissions intensity” is weighted 4% and the “trend in past emissions intensity”, only 2%.

Locked-in emissions are not relevant here.

“Scrap reduction strategy” is an important indicator to ensure the commitment of the company to improve the “steel loop”. 4% score is attributed to this indicator.

Intangible Investment

Total weighting for the module: 10%

Description of the weighting for

  • integrated actors
  • iron and steel making only actors

Total weighting for the module: 2%

Description of the weighting for

  • product shaping only actors

Intangible investment is focused entirely on R&D. R&D technology such as carbon sequestration and use can be some means of avoiding CO2 emissions that cannot be avoided because there originate from the reaction and the combustion. In a long-term perspective the investment in R&D for iron and steel, especially in CCS/CCU could help other sectors to also have access to these types of technologies. “The amount of CO2 captured is largest in the cement industry, followed by iron and steel and chemicals. By 2070, about 90% of all the CO2 emitted globally in cement and around 75% in chemicals and iron and steel is captured”. (16)

Moreover, clean energy needs faster progress. As decarbonization timescales in taking technologies from the laboratory to market for the iron and steel industry could be long. Intangible investment is a necessary condition for the sector to achieve progress in technology for a low-carbon future, and large R&D programs in climate-mitigating technologies are indicative of a strong financial commitment by the company. The analysis would like to focus on those R&D processes that contribute to climate change mitigating technologies, described in R&D for low-carbon transition and patent activity in a lower action.

As “low carbon patenting activity” is regarding the present, low weight is attributed to this indicator.

 

Sold Product Performance

Total weighting for the module: 10%

Description of the weighting for

  • integrated actors
  • iron and steel making only actors

Total weighting for the module: 32%

Description of the weighting for

  • product shaping only actors

Raw materials as ferro alloy, lime fluxes, H2, iron ore or graphite for anodes are critical to produce the iron and steel.

This module needs to encourage actors to have best practices from hotspot suppliers via “Purchased product interventions”. The future emissions and the present and future actions are key to ensure the reduction of GHG emissions and justifies the weighting of the indicator to be 10%.

As the performance of product sold represents a high source of emissions, the “trend in past emissions intensity” is an indication of the ‘adjustment’ that the company must make to place itself on a low-carbon pathway. 10% score is attributed to this indicator.

This module needs to encourage actors to have best practices from hotspot crude steel suppliers via “Purchased product interventions”. The future emissions and the present and future actions are key to ensure the reduction of GHG emissions and justifies the weighting of the indicator to be 22%.

Management 10%

Management is a multi-faceted module. It incorporates many different smaller indicators that together draw a picture of the company’s management and strategic approach to the low-carbon transition.

Going by the principle of future orientation, the main part of this weight is placed on the “low-carbon transition plan” and on “climate change scenario testing” weighted each at 3%. The transition plan provides more information on how this company will specifically deal with the transition, given its unique constraints and opportunities, and therefore provides valuable insights into the company’s planning and narrative towards the final goal. The adaptation to the climate change is inevitable for now and until 2050.

The indicator “oversight of climate change issues” is weighted 2%. This indicator provides more information on how this company is managed and if decisions are coming from the top management.

Suppliers

Total weighting for the module: 2%

Description of the weighting for

  • integrated actors
  • iron and steel making only actors

Total weighting for the module: 10%

Description of the weighting for

  • product shaping only actors
In order to develop the technology required for the low-carbon transition, it is essential that all actors involve their supply chains. This indicator focuses on the global strategy and general activities that a company has in place with respect to its engagement with suppliers. Nonetheless, it is not an indicator that is easy to measure and relies heavily on data quality to make a proper analysis.  
Suppliers for upstream value chain are not strategic, compared to the rest of the value chain. Considering these aspects, this indicator is given a weight of 2%. Product shaping only actors have high level of influence on the upstream actors. Therefore, considering these aspects, this indicator is given a weight of 10%.

Client 6%

The client engagement indicator is focused on the company’s efforts to promote low-carbon products and more efficient use of iron and steel (right steel for the right use, with the right quantities) to their customers. This is an important characteristic to identify companies making real efforts to make low-carbon iron and steel a significant part of their sales. Nevertheless, this indicator alone is a narrow aspect of the transition and therefore its total weight is medium at 6%.

Policy Engagement 5%

In line with the rationale for the management indicators of low weight, the policy engagement indicators are also contextual aspects which tell a narrative about the company’s stance on climate change and how the company expresses it in their engagement with policy makers and trade associations. The total weight for this module is therefore medium at 5%. As the ‘’Trade associations supported do not have climate-negative actions or positions’ is less robust than other indicators, it is less weighted.

Business Model 10%

Description of the weighting for

  • integrated actors
  • iron and steel making only actors

Description of the weighting for

  • product shaping only actors
The integration of a low-carbon economy in current and future business models is a composite indicator that captures many elements and aspects that cannot otherwise be captured in any of the other modules. It includes those aspects that are relevant to the transition but are not directly a part of the primary activities. It is future oriented by asking the companies on their narrative on certain future directions that the sector can/must take to transition. As this is an important aspect of any business long-term future planning, it holds a medium weight of 10% in the analysis.  

The IEA analysis (16) shows that the first way to decarbonize the sector is to have a specific focus on the use of low carbon energy. Regarding that priority, these aspects are weighted at 3%.

The ‘Business activities around steel circularity and low-carbon optimization of steel services with an equivalent performance” covers for example, end of life collection, circular economy, material efficiency. It covers also than product performance depends on the blended sold to the downstream actors. It is weighted at 5%.

Synergies with other industries are encouraged to go beyond this proper perimeter, valorise their waste, and participates in developing and experiment CCU/CCS. For that, “Business activities related to synergies with other industries” indicator is weighted at 2%.

The IEA analysis (16) shows that the first way to decarbonize the sector is to have a specific focus on the use of low carbon energy. Regarding that priority, these aspects are weighted at 5%.

Product performance depends also on the forming and shaping of the product sold to the final user and the steel circularity, so the indicator ‘Business activities around steel circularity and low-carbon optimization of steel services with an equivalent performance” should be considered to be consistent through the all value chain. It is weighted at 5%.

7. Rating

 

The ACT rating shall comprise of:

→ A Performance Score

→ A Narrative Score

→ A Trend Score

These pieces of information shall be represented within the ACT rating as follows:

a. Performance score as a number from 1 (lowest) to 20 (highest)

b. Narrative score as a letter from E (lowest) to A (highest)

c. Trend score as either “+” for improving, “-” for worsening, or “=” for stable.

In some situations, Trend scoring may reveal itself to be unfeasible depending on data availability. In this case, it should be replaced with a “?”.

The highest rating is thus represented as “20A+”, the lowest as “1E-” and the midpoint as “10C=”.

Table 11: LOWEST, HIGHEST AND MIDPOINT FOR EACH ACT SCORE TYPE

See the ACT Framework [1] for general information and methodology on the ACT rating.

 

7.1 Performance scoring

A detailed description of the Performance indicators and of their weightings for the I&S sector is presented in 5.3 Performance indicators.

TO BE COMPLETED with figure after roadtest phase.

Performance scoring shall be performed in compliance with the ACT Framework. No additional sector-specific issue impacting the Narrative scoring for this sector has been identified to date.

 

7.2 Narrative scoring

Narrative scoring shall be performed in compliance with the ACT Framework.

Narrative scoring shall be performed in compliance with the ACT Framework, assessing the company on the 4 following criteria:

  • Business model and strategy
  • Consistency and credibility
  • Reputation
  • Risk

The organisation of the company – type of actors and assets – shall be considered in the narrative assessment and narrative scoring for the I&S sector.

The information reported in Module 2 and 4 shall be considered with peculiar attention for the narrative analysis and narrative scoring for the I&S sector because they assess most parts of CO2 emissions due to iron and steel production. Especially in module 4.2, raw materials that are not hotspots should be justified.

The analyst should also look at the way that the industry is treating their off gases (module 2.7).

With this information, the analyst can take a holistic view on the company’s actions to perform deep decarbonization of its process and assess the consistency of actions taken with respect to targets, business model and engagement with other stakeholders.

No other sector-specific issue impacting the narrative scoring for this sector has been identified to date.

 

7.3 Trend scoring

Trend scoring shall be performed in compliance with the ACT Framework.

To apply the Trend scoring methodology presented in the ACT Framework, the analyst should identify the trends from the existing data infrastructure based on the data points and/or indicators that can indicate the future direction of change within the company.

The table below includes an overview of which indicators/data points could possibly have valuable information about future directions for the I&S sector.

Table 12 : RELEVANT PERFORMANCE INDICATORS FOR TRENDS IDENTIFICATION FOR THE I&S SECTOR

MODULE INDICATOR
1.Targets

IS 1.1 Alignment of inclusive scope 1+2 emissions reduction targets for crude steel production

IS 1.2 Alignment of scope 1+2 emissions reduction targets for steel downstream processing

IS 1.3 Time horizon of targets for crude steel production.

IS 1.4 Time horizon of targets for steel downstream processing

2. Material investment

IS 2.3 Locked-in emissions for crude steel production

IS 2.4 Trend in future emissions intensity for (global) crude steel production

IS 2.5 Trend in future emissions intensity per technical routes, per type

IS 2.6 Scrap reduction strategy

3. Intangible investment IS 3.1 R&D for low-carbon transition and mitigation technologies
4. sold product performance IS 4.2 Purchased product interventions
5. Management

IS 5.3 Low-carbon transition plan

IS 5.5 Climate change scenario testing

6. Supplier IS 6.1 Strategy to influence suppliers to reduce their GHG emissions
7. Client IS 7.1 Strategy to influence customer behaviour to reduce their GHG emissions
9. Business model

IS 9.1 Business activities that increase the use of low carbon energy

IS 9.2 Business activities around steel circularity and that contribute to low-carbon optimization of steel services with an equivalent performance

IS 9.3 Business activities related to synergies with other industries

 

8  Aligned State

 

The table below presents the response of a low-carbon aligned company of the sector to the five ACT questions:

→ What is the company planning to do? [Commitment]

→ How is the company planning to get there? [Transition Plan]

→ What is the company doing at present? [Present]

→ What has the company done in the recent past? [Legacy]

→ How do all these plans and actions fit together? [Consistency]

 

Figure 16 : ALIGNED STATE FOR COMPANIES IN THE IRON AND STEEL SECTOR

 

 

9  References

 

1. ACT Initiative. ACT Framework, version 1.1. 2019.

2. BCG. Steel's Contribution to a low-carbon Europe 2050. Technical and economic analysis of the sector's CO2 abatement potential. [Online] 2013. https://www.bcg.com/publications/2013/metals-mining-environment-steels-contribution-low-carbon-europe-2050.aspx.

3. EU-MERCI. European MEthods and procedures based on Real Cases for the effective implementation of polilcies and measures supporting energy efficiency in the Industry. HORIZON 2020 Project Nr. 36.845. Deliverable 4.2 Technical analysis - Iron and Steel sector. [Online] 9 September 2017. http://www.eumerci-portal.eu/documents/20182/41722/Iron+and+Steel.pdf/a86fed1f-634d-4854-9b01-c7b1664ac125.

4. World Steel Association. The White book of Steel. [Online] 2012. https://www.worldsteel.org/en/dam/jcr:7b406f65-3d94-4e8a-819f-c0b6e0c1624e/The%2520White%2520Book%2520of%2520Steel_web.pdf. ISBN 978-2-930069-67-8.

5. Primetals technologies. The winding road toward zero-carbon iron. [Online] January 2020. https://www.primetals.com/press-media/metals-magazine/issue-02-2020/the-winding-road-toward-zero-carbon-iron.

6. Comparing the CO 2 Emissions of Different Steelmaking Routes. RAMMER, Barbara, MILLNER, Robert et BOEHM, Christian. 7–13, s.l. : BHM Berg- und Hüttenmännische Monatshefte, 2017, Vol. 162.

7. RAMMER, Barbara, MILLNER, Robert and BOEHM, Christian. Comparing the CO2 Emissions of Different Ironmaking Routes. [Online] 13 September 2016. http://m-n.marketing/downloads/conferences/ecic2016/presentations/Dienstag%20Room%20B/Rammer,%20Primetals.pdf.

8. ACT Initiative. Guidance for ACT sectoral methodologies development, version 1.0. 2019.

9. IEA. Tracking Clean Energy Progress 2017- Energy Technology Perspectives 2017 Exerpt. 2017.

10. Science Based Targets Initiative. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

11. IPCC. IPCC Guidelines for National Greenhouse Gas Inventories, Volume 3, Chapter 2. 2006.

12. CEN. EN 19694-2:2016. Stationary source emissions - Greenhouse Gas (GHG) emissions in energy-intensive industries - Part 2: Iron and steel industry. [Online] 20 July 2016. https://standards.cen.eu/dyn/www/f?p=204:110:0::::FSP_PROJECT,FSP_ORG_ID:38640,6245&cs=1C197D84E14A0753D823484C107832672.

13. International Organization for Standardization. ISO/AWI TS 19694-2. Stationary source emissions — Greenhouse Gas (GHG) emissions in energy-intensive industries — Part 2: Iron and steel industry. [Online] https://www.iso.org/standard/70746.html.

14. Association, World Steel. Steel industry co-products. 2020.

15. Forum, GGSD. Low and zero emissions in the steel and the cement industries. 2019.

16. IEA. Energy Technology Pespectives 2020. 2020.

17. finance, EU technical expert group on sustainable. Final report of the Technical Expert Group on Sustainable Finance and Updated methodology & Updated Technical Screening Criteria. 2020.

18. IIGCC. Investor Expectations of Companies in the Construction Materials Sector. 2019.

19. Ellen Macarthur Foundation, Material Economics. Completing the picture how the circular economy tackles climate change. 2019.

20. World Steel Association. CO2 emissions data collection, User guide, version 7. [Online] 25 May 2015. https://www.worldsteel.org/en/dam/jcr:0e4a13c7-1cf7-4b9b-9577-17b752441249/Data+collection+user+guide.pdf.

21. —. World steel in figures. [Online] 2019. https://www.worldsteel.org/en/dam/jcr:96d7a585-e6b2-4d63-b943-4cd9ab621a91/World%2520Steel%2520in%2520Figures%25202019.pdf.

22. —. Sustainability indicators 2003 - 2018. [Online] January 2020. https://www.worldsteel.org/en/dam/jcr:296df0e7-6182-4574-bbc9-f8fbeac12d4e/Sustainability%2520indicators%25202003%2520to%25202018%2520and%2520participation.pdf.

23. Material Economics. Industrial transformation 2050 - Pathways to Net-Zero Emissions from EU Heavy Industry. 2019.24. Mapping the Global Flow of Steel: From Steelmaking to End-Use Goods. Cullen, Jonathan M., Allwood, Julian M. et Bambach, Margarita D. 

24, 2012, Environ. Sci. Technol, Vol. 46, pp. 13048–13055.

25. World Steel Association. Steel Statistical Yearbook. [Online] 2019. https://www.worldsteel.org/steel-by-topic/statistics/steel-data-viewer/P1_crude_steel_total/WORLD_ALL.

26. Levi, Peter. IEA Technology Roadmap. The global iron and steel sector. [Online] March 2019. http://www.oecd.org/sti/ind/86th%20Steel%20Committee%20meeting%20%20Presentation%20by%20IEA,%20IEA%20Technology%20Roadmap.pdf.

27. Wieland, Hanspeter and Giljum, Stefan. Constructing global physical input-output tables for iron and steel. [Online] August 2019. https://www.fineprint.global/briefs/iron-steel-piot/.

28. McKinsey&Company. Learnings from upstream integration of steelmakers. [Online] 11 December 2014. http://www.oecd.org/sti/ind/Session%202%20%20-%20McKinsey%20-%20OECD-SA%20Dec%202014.pdf.

29. Government of India - Ministry of steel. Definitions commonly used in the Iron & Steel sector. [Online] June 2020. https://steel.gov.in/glossary-terms-definitions-commonly-used-iron-steel-industry.

30. International Stainless Steel Forum. Stainless Steel in Figures. [Online] 2019. https://www.worldstainless.org/Files/issf/non-image-files/PDF/ISSF_Stainless_Steel_in_Figures_2019_English_public_version.pdf.

31. Reck, Barbara K., et al. Global Stainless Steel Cycle Exemplifies China’s Rise to Metal Dominance. Environ. Sci. Technol. [Online] 25 March 2010. Global Stainless Steel CycleExemplifies China’s Rise to MetalDominance.

32. Midrex Technologies, Inc. 2018 World Direct Reduction Statistics. [En ligne] July 2019. https://www.midrex.com/wp-content/uploads/Midrex_STATSbookprint_2018Final-1.pdf.

33. Schütze, Wolfgang R. HBI – Hot Briquetting of Direct Reduced Iron. Technology and Status of Industrial Applications. [Online] November 2013. https://www.koeppern-international.com/fileadmin/user_upload/downloads/Briquetting/Brochure_HBI_-_Hot_Briquetting_of_Direct_Reduced_Iron.pdf.

34. Callister, William D. and Rethwisch, David G. Materials Science and Engineering: An Introduction, 7th Edition (p360). [Online] 2007. https://fr.slideshare.net/anasimdad007/callister-materials-science-and-engineering-an-introduction-7e-wiley-2007-57476495.

35. Schneider, H*. Rolling mills. Encyclopaedia of Occupational Health and Safety. [Online] http://www.ilocis.org/documents/chpt73e.htm#JD_Figure73.13.

36. Capus, Joseph M. Metal Powders: A Global Survey of Production, Applications and Markets 2001-2010. s.l. : Elsevier Advanced Technology, 2005. ISBN 1856174794.

37. Pometon Powder. Metal powdersfor sintering technology. [Online] September 2017. https://www.pometon.com/media/product/class-attachment/brochure_sinter_17.pdf.

38. European Commission, DG Climate Action. Guidance document n°9 on the harmonized free allocation methodology for the EU-ETS post 2012. [Online] 2011. https://ec.europa.eu/clima/sites/clima/files/ets/allowances/docs/gd1_general_guidance_en.pdf.

39. EU Technical expert group on sustainable finance. Taxonomy report: technical annex. [Online] 2020. https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/200309-sustainable-finance-teg-final-report-taxonomy-annexes_en.pdf.

40. International Organization for Standardization. ISO/AWI 19694-6: Stationary source emissions — Determination of greenhouse gas (GHG) emissions in energy-intensive industries — Part 6: Ferroalloy industry . [Online] 2020. https://www.iso.org/standard/73760.html.

41. —. ISO 14404-1:2013 : Calculation method of carbon dioxide emission intensity from iron and steel production — Part 1: Steel plant with blast furnace. [Online] 03 2013. https://www.iso.org/obp/ui/fr/#iso:std:iso:14404:-1:ed-1:v1:en.

42. —. ISO 14404-2:2013: Calculation method of carbon dioxide emission intensity from iron and steel production — Part 2: Steel plant with electric arc furnace (EAF). [Online] March 2013. https://www.iso.org/obp/ui/fr/#iso:std:iso:14404:-2:ed-1:v1:en.

43. —. ISO 14404-3:2017: Calculation method of carbon dioxide emission intensity from iron and steel production — Part 3: Steel plant with electric arc furnace (EAF) and coal-based or gas-based direct reduction iron (DRI) facility. [Online] June 2017. https://www.iso.org/obp/ui/fr/#iso:std:iso:14404:-3:ed-1:v1:en.

44. —. ISO/DIS 14404-4 : Calculation method of carbon dioxide emission intensity from iron and steel production — Part 4: Guidance for using ISO 14404 family. [Online] 2020. https://www.iso.org/obp/ui/fr/#iso:std:iso:14404:-4:dis:ed-1:v1:en.

45. ResponsibleSteel. ResponsibleSteel Standard version 1.0. [Online] 5 November 2019. https://www.responsiblesteel.org/wp-content/uploads/2019/11/ResponsibleSteel_Standard_v1-0.pdf.

46. —. ResponsibleSteel standard. Draft version 4.1. [En ligne] 24 June 2019. https://www.responsiblesteel.org/wp-content/uploads/2019/06/Standard-DRAFT-4.1-ResponsibleSteel2018-06-24eng.pdf.

47. Institute for Industrial Productivity. Industrial Efficiency Technology Database. Iron and Steel. [Online] http://www.iipinetwork.org/wp-content/Ietd/content/iron-and-steel.html.

48. Material economics. Industrial Transformation 2050 - Pathways to Net-Zero Emissions from EU Heavy Industry. [Online] 2019. https://materialeconomics.com/latest-updates/industrial-transformation-2050.

49. Thermodynamic analysis for the controllability of elements in therecycling process of metals. Nakajima, K., et al. 11, s.l. : Environ. Sci. Technol., 2011, Vol. 45, p. 4929−4936.

50. International Energy Agency. Energy Technology Perspectives 2017. [Online] 6 June 2017. https://www.iea.org/reports/energy-technology-perspectives-2017.

51. —. Energy Technology Perspectives 2016. [Online] June 2016. https://www.iea.org/reports/energy-technology-perspectives-2016.

52. ICF Consulting Services Ltd; Fraunhofer ISI. Industrial Innovation | Part 2: Scenario analysis and pathways to deep decarbonisation. [Online] 20 March 2019. https://ec.europa.eu/clima/sites/clima/files/strategies/2050/docs/industrial_innovation_part_2_en.pdf.

53. Eurofer. Low carbon roadmap. Pathways to a CO2-neutral European steel industry. [Online] November 2019. https://www.eurofer.be/documents/greendealonsteel/ENSURE%20COMPETITIVENESS%20THROUGHOUT%20THE%20CLIMATE%20TRANSITION%20AND%20BEYOND/EUROFER%20Low%20Carbon%20Roadmap%20'Pathways%20to%20a%20CO2-neutral%20European%20Steel%20Industry'.pdf.

54. Van Sluisveld, Mariësse, et al. EU decarbonisation scenariosfor industry. Deliverable 4.2. REINVENT decarbonisation. [Online] 04 July 2018. https://www.reinvent-project.eu/documentation/.

55. Carbone 4. Business strategy in (and for) a decarbonised world: Case study of the steel industry. [Online] January 2019. http://www.carbone4.com/wp-content/uploads/2019/01/Business-strategy-scenario-analysis-STEEL.pdf.

56. Pardo, N., Moya, J.A. and Vatopoulos, K. Prospective Scenarios on Energy Efficiency and CO2 Emissions in the EU Iron & Steel Industry. JRC Scientific and policy reports. [Online] 2012. ISBN 978-92-79-26971-4.

57. WSP ; Parsons Brinckerhoff; DNV GL. Industrial Decarbonisation and Energy Efficiency Roadmaps to 2050. [Online] 25 March 2015. https://www.gov.uk/government/publications/industrial-decarbonisation-and-energy-efficiency-roadmaps-to-2050.

58. WLI, LMI. The greenhouse gas protocol initiative, public sector protocol, provisionnal draft. 2009.59. Initiative, Science Based Targets. Sectoral Decarbonization Approach (SDA): A method for setting corporate emissions reduction targets in line with climate science. 2015.

 

 

10 Glossary

ACT The Assessing low-Carbon Transition (ACT) initiative was jointly developed by ADEME and CDP. ACT assesses how ready an organization is to transition to a low-carbon world using a future-oriented, sector-specific methodology (ACT website).
Action gap In relation to emissions performance and reduction, the action gap is the difference between what a given company has done in the past plus what it is doing now, and what has to be done. For example, companies with large action gaps have done relatively little in the past, and their current actions point to continuation of past practices.
ADEME Agence de l'Environnement et de la Maîtrise de l'Energie; The French Environment and Energy Management Agency (ADEME webpage).
Alignment The ACT project seeks to gather information that will be consolidated into a rating that is intended to provide a general metric of the 2-degree alignment of a given company. The wider goal is to provide companies specific feedback on their general alignment with 2-degrees in the short and long term.
Analyst Person in charge of the ACT assessment.
Assess Under the ACT project, to evaluate and determine the low-carbon alignment of a given company. The ACT assessment and rating will be based on consideration of a range of indicators. Indicators may be reported directly from companies. Indicators may also be calculated, modelled or otherwise derived from different data sources supplied by the company. The ACT project will measure 3 gaps (Commitment, Horizon and Action – defined in this glossary) in the GHG emissions performance of companies. This model closely follows the assessment framework presented above. It starts with the future, with the goals companies want to achieve, followed by their plans, current actions and past actions.
Asset An item of property owned by a company, regarded as having value and available to meet debts, commitments, or legacies. Tangible assets include 1) fixed assets, such as machinery and buildings, and 2) current assets, such as inventory. Intangible assets are nonphysical such as patents, trademarks, copyrights, goodwill and brand value.
Base year According to the GHG Protocol and ISO14064-1, a base year is “a historic datum (a specific year or an average over multiple years) against which a company’s emissions are tracked over time”. Setting a base year is an essential GHG accounting step that a company must take to be able to observe trends in its emissions information (GHG Protocol Corporate Standard).
Benchmark A standard, pathway or point of reference against which things may be compared. In the case of pathways for sector methodologies, a sector benchmark is a low-carbon pathway for the sector average value of the emissions intensity indicator(s) driving the sector performance. A company’s benchmark is a pathway for the company value of the same indicator(s) that starts at the company performance for the reporting year and converges towards the sector benchmark in 2050, based on a principle of convergence or contraction of emissions intensity.
Business-as-usual No proactive action taken for change. In the context of the ACT methodology, the business-as-usual pathway is constant from the initial year onwards. In general, the initial year – which is the first year of the pathway/series – is the reporting year (targets indicators) or the reporting year minus 5 years (performance indicators).
Business model A plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products, and details of financing. Under ACT, evidence of the business model shall be taken from a range of specific financial metrics relevant to the sector and a conclusion made on its alignment with low-carbon transition and consistency with the other performance indicators reported.
Capital expenditure Money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.
Carbon Dioxide Removal technologies (CDR) Carbon Dioxide Removal technologies (CDR) are anthropogenic activities removing CO2 from the atmosphere and durably storing it in geological, terrestrial, or ocean reservoirs, or in products. It includes existing and potential anthropogenic enhancement of biological or geochemical sinks (afforestation, reforestation, land management, bio-energy carbon capture and storage, enhanced weathering, etc.) and direct air capture and storage (DAC).
Carbon Capture and Storage (CCS) Carbon Capture and Storage (CCS) is a process in which a relatively pure stream of carbon dioxide (CO2) from industrial and energy-related sources is separated (captured), conditioned, compressed and transported to a storage location for long-term isolation from the atmosphere. CCS is considered as a CDR only when applied to a bOGenic stream of CO2 (e.g. coming from a bio-energy power plant): it is then called BECCS (bio-energy carbon capture and storage).
Carbon Capture, Use and Storage (CCU/S) Carbon Capture, Use and Storage (CCU/S) is a process in which CO2 is captured and then used to produce a new product. If the CO2 is stored in a product for a climate-relevant time horizon, this is referred to as carbon dioxide capture, utilization and storage (CCUS). Only then, and only combined with CO2 recently removed from the atmosphere, can CCUS lead to carbon dioxide removal. CCU is sometimes referred to as carbon dioxide capture and use
CDP Formerly the "Carbon Disclosure Project", CDP is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information. CDP works with market forces, including 827 institutional investors with assets of over US$100 trillion, to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them. More than 5,500 companies worldwide disclosed environmental information through CDP in 2015. CDP now holds the largest collection globally of primary climate change, water and forest risk commodities information and puts these insights at the heart of strategic business, investment and policy decisions (CDP website).
Climate change A change in climate, attributed directly or indirectly to human activity, that alters the composition of the global atmosphere and that is, in addition to natural climate variability, observed over comparable time periods’ (UNFCCC).
Company pathway A company’s past emissions intensity performance pathway up until the present.
Company target pathway The emissions intensity performance pathway that the company has committed to follow from the initial year on until a future year, for which it has set a performance target.
Commitment gap In relation to emissions performance, the difference between what a company needs to do and what it says it will do.
Conservativeness A principle of the ACT project; whenever the use of assumptions is required, the assumption shall err on the side of achieving 2-degrees maximum.
Consistency A principle of the ACT project; whenever time series data is used, it should be comparable over time. In addition to internal consistency of the indicators reported by the company, data reported against indicators shall be consistent with other information about the company and its business model and strategy found elsewhere. The analyst shall consider specific, pre-determined pairs of data points and check that these give a consistent measure of performance when measured together.
CRUDE STEEL The term is internationally used to mean the 1st solid steel product upon solidification of liquid steel (produced from any production route, primary or secondary). In other words, it includes Ingots (in conventional mills) and Semis (in modern mills with continuous casting facility). According to International Iron & Steel Institute (IISI), for statistical purpose, crude steel also includes liquid steel which goes into production of steel castings.
Data Facts and statistics collected together for reference and analysis (e.g. the data points requested from companies for assessment under the ACT project indicators).
Decarbonization A complete or near-complete reduction of greenhouse gas emissions over time (e.g. decarbonization in the electric utilities sector by an increased share of low-carbon power generation sources, as well as emissions mitigating technologies like Carbon Capture and Storage (CCS)).
Decarbonization pathway Benchmark pathway (See ‘Benchmark’)
Emissions The GHG Protocol defines direct GHG emissions as emissions from sources that are owned or controlled by the reporting entity, and indirect GHG emissions as emissions that are a consequence of the activities of the reporting entity, but occur at sources owned or controlled by another entity (GHG Protocol).
Fossil fuel A natural fuel such as coal, oil or gas, formed in the geological past from the remains of living organisms.
Future A period of time following the current moment; time regarded as still to come.
Power generation The process of generating electric power from other sources of primary energy.
Primary energy Primary energy is an energy form found in nature that has not been subjected to any conversion or transformation process. It is energy contained in raw fuels, and other forms of energy received as input to a system. Primary energy can be non-renewable or renewable.
Greenhouse gas (GHG) Greenhouse gas (e.g. carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and three groups of fluorinated gases (sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs)) which are the major anthropogenic GHGs and are regulated under the Kyoto Protocol. Nitrogen trifluoride (NF3) is now considered a potent contributor to climate change and is therefore mandated to be included in national inventories under the United Nations Framework Convention on Climate Change (UNFCCC).
Guidance Documentation defining standards or expectations that are part of a rule or requirement (e.g. CDP reporting guidance for companies).
Horizon Gap In relation to emissions performance, the difference between the average lifetime of a company’s production assets (particularly carbon intensive) and the time-horizon of its commitments. Companies with large asset-lives and small time horizons do not look far enough into the future to properly consider a transition plan.
Incentive A thing, for example money, that motivates or encourages someone to do something (e.g. a monetary incentive for company board members to set emissions reduction targets).
Indicator

An indicator is a quantitative or qualitative piece of information that, in the context of the ACT project, can provide insight on a company’s current and future ability to reduce its carbon intensity. In the ACT project, 3 fundamental types of indicators can be considered:

Key performance indicators (KPIs);

Key narrative indicators (KNIs); and

Key asset indicators (KAIs).

Intensity (emissions) The average emissions rate of a given pollutant from a given source relative to the intensity of a specific activity; for example grams of carbon dioxide released per MWh of energy produced by a power plant.
Intervention Methods available to companies to influence and manage emissions in their value chain, both upstream and downstream, which are out of their direct control (e.g. a retail company may use consumer education as an intervention to influence consumer product choices in a way that reduces emissions from the use of sold products).
Lifetime The duration of a thing's existence or usefulness (e.g. a physical asset such as a power plant).
Long-term Occurring over or relating to a long period of time; under ACT this is taken to mean until the year 2050. The ACT project seeks to enable the evaluation of the long-term performance of a given company while simultaneously providing insights into short- and medium-term outcomes in alignment with the long-term.
Low-carbon scenario (or pathway) A low-carbon scenario (or pathway) is a 2°C scenario, a well-below 2°C scenario or a scenario with higher decarbonization ambition.
Low-carbon transition The low-carbon transition is the transition of the economy according to a low-carbon scenario.
Manufacture Making objects on a large scale using machinery.
Maturity matrix A maturity matrix is essentially a “checklist”, the purpose of which is to evaluate how well advanced a particular process, program or technology is according to specific definitions.
Mitigation (emissions) The action of reducing the severity of something (e.g. climate change mitigation through absolute GHG emissions reductions)
Model A program designed to simulate what might or what did happen in a situation (e.g. climate models are systems of differential equations based on the basic laws of physics, fluid motion, and chemistry that are applied through a 3-dimensional grid simulation of the planet Earth).
Nuclear electricity Electricity that comes from splitting atoms in a reactor to heat water into steam, turn a turbine and generate electricity.
Pathway (emissions) A way of achieving a specified result; a course of action (e.g. an emissions reduction pathway).
Performance Measurement of outcomes and results.
Plan A detailed proposal for doing or achieving something.
Point A mark or unit of scoring awarded for success or performance.
Relevant / Relevance In relation to information, the most relevant information (core business and stakeholders) to assess low-carbon transition.
Renewable energy Energy from a source that is not depleted when used, such as wind or solar power.
Reporting year Year under consideration.
Research and Development (R&D) A general term for activities in connection with innovation; in industry; for example, this could be considered work directed towards the innovation, introduction, and improvement of products and processes.
Science-Based Target To meet the challenges that climate change presents, the world’s leading climate scientists and governments agree that it is essential to limit the increase in the global average temperature at below 2°C. Companies making this commitment will be working toward this goal by agreeing to set an emissions reduction target that is aligned with climate science and meets the requirements of the Science-Based Targets Initiative.
Scenario The Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change (IPCC) presents the results of an extensive climate modelling effort to make predictions of changes in the global climate based on a range of development/emissions scenarios. Regulation on climate change-related issues may present opportunities for your organization if it is better suited than its competitors to meet those regulations, or more able to help others to do so. Possible scenarios would include a company whose products already meet anticipated standards designed to curb emissions, those whose products will enable its customers to meet mandatory requirements or those companies that provide services assisting others in meeting regulatory requirements.
Scenario analysis A process of analysing possible future events by considering alternative possible outcomes.
Sectoral Decarbonization Approach (SDA) To help businesses set targets compatible with 2-degree climate change scenarios, the Sectoral Decarbonization Approach (SDA) was developed. The SDA takes a sector-level approach and employs scientific insight to determine the least-cost pathways of mitigation, and converges all companies in a sector towards a shared emissions target in 2050.
Short-term Occurring in or relating to a relatively short period of time in the future.
Scope 1 emissions All direct GHG emissions (GHG Protocol Corporate Standard).
Scope 2 emissions Indirect GHG emissions from consumption of purchased electricity, heat or steam (GHG Protocol Corporate Standard).
Scope 3 emissions Other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities (e.g. T&D losses) not covered in Scope 2, outsourced activities, waste disposal, etc. (GHG Protocol Corporate Standard).
Sector A classification of companies with similar business activities, e.g. automotive manufacturers, power producers, retailers, etc.
Strategy A plan of action designed to achieve a long-term or overall aim. In business, this is the means by which a company sets out to achieve its desired objectives; long-term business planning.
Supplier A person or entity that is the source for goods or services (e.g. a company that provides engine components to an automotive manufacturing company).
Sustainable renewable electricity

Facilities operating at life cycle emissions lower than 100gCO2e/kWh, declining to 0 gCO2e/kWh by 2050, are eligible; this is applicable to production of electricity from solar PV, concentrated solar power, wind power, ocean energy, hydropower, geothermal and bioenergy – production of electricity from gas combustion is not included.

Green EU taxonomy alignment

Sustainable electricity equipment

Equipment where the main objective is an increase of the generation or use of renewable electricity generation; equipment to increase the controllability and observability of the electrical power system and enable the development and integration of renewable energy sources, this includes: Sensors and measurement tools, and Communication and control; equipment to carry information to users for remotely acting on consumption; equipment to allow for exchange of renewable electricity between users)

Green EU taxonomy alignment

Sustainable electricity storage equipment

All electricity storage are eligible except storage technology which uses hydrocarbons as a medium of storage is not eligible; for hydrogen storage: Direct CO2 emissions from manufacturing of hydrogen: 0.95 tCO2e/t Hydrogen; electricity use for hydrogen produced by electrolysis is at or lower than 50 MWh/t Hydrogen; average carbon intensity of the electricity produced that is used for hydrogen manufacturing is at or below 100 gCO2e/kWh.

Green EU taxonomy alignment

Sustainable biofuels and sustainable BioGas

If produced from the advanced bioenergy feedstock listed in Annex IX of Directive (EU) 2018/2001.

Only production of advanced biofuels as per Art2(34), and certified low-ILUC fuels, in line with the requirements of RED II, is eligible. If primary forest-related feedstock (item (o) of Annex IX, Part A of Directive (EU) 2018/2001) is used, it must be produced in economic activities fulfilling the Afforestation & Reforestation, and/or Rehabilitation & Existing Forest Management criteria.

If crop feedstock is used, it must be produced in economic activities fulfilling the Growing of Perennial Crops or the Growing of Non-perennial Crops criteria.

Green EU taxonomy alignment

Sustainable hydrogen

Hydrogen which meets the following requirements:

• Direct CO2 emissions from manufacturing of hydrogen: 0.95 tCO2e/t Hydrogen

• Electricity use for hydrogen produced by electrolysis is at or lower than 50 MWh/t Hydrogen

• Average carbon intensity of the electricity produced that is used for hydrogen manufacturing is at or below 100 gCO2e/kWh

Green EU taxonomy alignment

Trade association Trade associations (sometimes also referred to as industry associations) are an association of people or companies in a particular business or trade, organized to promote their common interests. Their relevance in this context is that they present an “industry voice” to governments to influence their policy development. The majority of organizations are members of multiple trade associations, many of which take a position on climate change and actively engage with policymakers on the development of policy and legislation on behalf of their members. It is acknowledged that in many cases companies are passive members of trade associations and therefore do not actively take part in their work on climate change (CDP climate change guidance).
Transport To take or carry (people or goods) from one place to another by means of a vehicle, aircraft, or ship.
Trend A general direction in which something (e.g. GHG emissions) is developing or changing.
Technology The application of scientific knowledge for practical purposes, especially in industry (e.g. low-carbon power generation technologies such as wind and solar power, in the electric power generation sector).
Transition The process or a period of changing from one state or condition to another (e.g. from an economic system and society largely dependent on fossil fuel-based energy, to one that depends only on low-carbon energy).
Verifiable / Verifiability To prove the truth of, as by evidence or testimony; confirm; substantiate. Under the ACT project, the data required for the assessment shall be verified or verifiable.
Weighting The allowance or adjustment made in order to take account of special circumstances or compensate for a distorting factor.

11. Annex

This annex will not be part of the methodology but it is part of the work to draft the methodology.

 

11.1 Sectoral level data

The use of steel is associated with economic growth: when there are more buildings, more transport means, more boats, more industrial equipment... then more steel is used! China has known a quick growth of its steel production after 2000. During some years, that Chinese growth was higher than the yearly European production! This growth is associated with the global growth of China. In the same time, Mittal (from India) and Arcelor (mainly FR) have merged, while Corus (mainly UK) has been integrated by Tata Steel (from India too). As said by Worldsteel (based in Brussels), the “barycenter” of the steel production at world level would be somewhere in Asia, no longer in Brussels!

In fact, steel recycling is done thanks to the use of EAF, and steel scraps are recovered from the growing dismantling of old building and infrastructures, old cars, old machineries and equipment… Nearly all End of Life (EoL) steel can be recycled. Nevertheless, the continuous increase of the steel consumption, associated with the growth at world level (China, India…), together with the relatively long lifespan of the steel products, makes that there is still a significant need for primary steel for the years to come. In parallel, some applications of steel (such as stamping) seems to request BF grade steel (quality issue).

The nature (BF or EAF) of steel production in a given area reflects the needs of steel in this area, associated with its current growth. At European level, some BF routes have been closed since European growth is low.

 

11.1.1 Global statistics

 

Production statistics

When considering statistics regarding steel production, the production amounts are collected for two main products:

Crude steel: the term is internationally used to mean the 1st solid steel product upon solidification of liquid steel (produced from any production route, primary or secondary). In other words, it includes Ingots (in conventional mills) and Semis (in modern mills with continuous casting facility). According to International Iron & Steel Institute (IISI), for statistical purpose, crude steel also includes liquid steel which goes into production of steel castings.

Saleable steel: the term is used to designate various types of solid steel products, which are sold to outside customers for further processing or for direct use/consumption. Therefore, it includes ingots and/or semis and/or finished steel products. (Liquid steel is normally not traded). The amount of saleable steel produced annually is always lower than crude steel, because scraps are produced during forming (e.g. cutting bars to length) and during the fabrication of final products. These scraps are not sold as products to customers, but sent back to an EAF for being melted,

In 2018, 1 808 million tonnes of crude steel were produced in the world, more than half in China alone.

 

Figure 17: Saleable steel production in 2018 (21)

 

 

Figure 17presents the material flows in the different steps of the steel production activities, as calculated in a scientific article by Cullen et al. in 2012. No more recent global data was found on this topic, and the global apparent steel use considered in the scientific article (1,088 million tonnes) does not match the one provided by Worldsteel (1,712 million tonnes). However, this figure can give an idea of the most common production routes in the sector.

 

Figure 18 : Material flow analysis of the global steel production in 2008 (24)

 

 

Evolution of steel production

According to World Steel Association, global steel production has more than doubled in the last 20 years, from 850 million tonnes in 2000 to 1 816 million tonnes in 2018, as can be seen on Figure 19.

 

Figure 19 : Evolution of global steel production from 2000 to 2018 (25)

 

 

This growth is expected to continue in future years. As part of the development of their low carbon scenarios, the IEA makes forecasts of the demand for several commodities, including crude steel. In a presentation (26) of their Technology Roadmap for the Iron and steel sector (to be published in September 2020), IEA presented the preliminary forecasts for the production of crude steel in the world up to 2050 (see figure below). Updated forecast should be available in the upcoming report.

 

Figure 20: Projection of crude steel production (relative to production in 2015) for several regions (26)

 

 

Global steel production is expected to grow by about 30% between 2015 and 2050. The production should grow everywhere except in China. India’s steel production is expected to be more than 5 times higher in 2050 than in 2015.

 

Steel carbon emissions and energy intensity

The World Steel Association (Worldsteel) publishes data about the global carbon and steel intensity, and its evolution from 2003 to 2018 (22). These indicators are calculated using route-specific energy and CO2 intensity for the basic oxygen furnace and electric arc furnace. The indicators are also weighted based on the production share of each route. Greenhouse emissions includes CO2 emissions only as these make up approximately 93% of all steel industry greenhouse gas emissions. They have been calculated using the data collection tool from Worldsteel, presented in §1.1.

Figure 21: Evolution of GLOBAL GHG emissions and energy intensity for the Iron & Steel sector (22)

 

According to these figures, it seems that both greenhouse gas emissions and energy intensity have been increasing in the last 15 years. World Steel does not provide any explanation about these figures. This does not necessarily mean that the carbon performance of the iron and steel sector have been decreasing, other possible explanations could be:

Lack of representativity of the sample data used to calculate these values: World Steel reports that 25 organisations have contributed data in 2003, and 58 in 2017. It could be that intensities in 2003 had been underestimated due to the fact that only the most performant organisation had communicated.

More carbon intensive products which provide more service: alloy steel (see §

1.1) has a higher carbon footprint per ton, but has higher strength, which means that less of it can be used compared to carbon steel in a similar application. If the share of alloy steel in total crude steel production has increased from 2003 to 2018, the GHG emissions per tonne of crude steel could have increased despite an improved iron and steel making carbon performance.

Decrease of the average value of the credit given for producing Blast Furnace gas: World Steel awards a credit for producing Blast Furnace gas (see explanation in §

1.1). This credit depends on the carbon footprint of the network electricity in the plant is operating. If the carbon footprint of electricity has improved between 2003 and 2018, the carbon emissions intensity of a given plant, while keeping the same efficiency, could have increased.

It could be interesting to ask TWG members to comment on this graph to have a better understanding of it.

 

Investment in new processes and products

As part of their Sustainability Indicators report (22), World Steel Association also reports on the investment in new processes and products. This indicator measures the value of investments made on capital expenditure, and research and development expressed as a percentage of revenue. Capital expenditure refers to money used to acquire or improve long-term physical assets such as property, plants, machinery and equipment, industrial buildings and warehouses. Research and development refers to money used with the prospect of gaining new scientific or technical knowledge to develop new products, processes, and services. The result is presented as percentage of annual revenue.

This does not only include investment regarding decarbonisation processes and R&D, but it could be used as a reference for defining a benchmark for the “immaterial investment” indicator.

Figure 22: Evolution of the investment in new processes and products in the iron and steel sector (22)

 

 

11.1.2 Global steel trade

A Physical Input Output Table (PIOT) developed by the FINEPRINT project (27) has been identified. More detailed information of the global trade of steel production can probably be found in this database, if needed, during the methodology development.

 

Structure of the physical IO tables for iron and steel
Figure 23 : Structure of the physical input output table developed by the FINEPRINT project (27)

 

 

In particular, data about international exchanges of products can be obtained using this FINEPRINT database. By analysing the type of data presented in Figure 23 Figure 28, it could be possible to determine if semi-finished products such as slabs, ingots, billets and blooms are traded a lot or not, helping in defining the most appropriate scope for the ACT methodology on the basis of concrete statistical data. The FINEPRINT project is currently on-going, but we could ask for an anticipated access to the data.

Figure 24 presents some of the results of the FINEPRINT database. Some valuable information can be analysed from these graphs:

  • The results show that the density of trade networks tends to increase with the degree of processing.
  • Primary iron, the initial layer/stage of the supply chain, is the least dense network: only 19% of the theoretically possible trade relations between all partners are actually realised. Exports from Australia (AU) to China (CN) are the single largest trade flow.
  • The scrap trade network has a density of 31% and countries such as Turkey (TR), Korea (KR) and Germany (DE) have particularly large imports.
  • The semi-finished steel network has a density of 23%, where the most important actors are Brazil (BR), United States (US) and Russia (RU).
  • Trade networks of finished steel and final products are the densest layers with 72% and 92% respectively. China again is a key actor here, exporting large amounts of finished steel to Korea and steel in final consumer products to the United States.
  • The database can also be used to calculate the number of bilateral trade relations each country maintains, which is the number of import links plus the number of export links i.e. in-degree and out-degree. The size of the red bubbles of the countries reflects this measure. In

Figure 24, it can be seen that Germany (DE) holds a large number of bilateral trade relations across all layers of the supply chain, reflecting Germany’s strong embeddedness in global supply chains and large exports in sectors such as machinery or vehicles.

 

Network graphs showing international trade flows of the 34 countries of the 2014 PIOT for different layers (product groups) of iron and steel supply chains
Figure 24: Network graphs showing international trade flows of the 34 countries of the 2014 PIOT for different layers (product groups) of iron and steel supply chains (27)

 

 

11.1.3 Market structure

Figure 25 presents the main steel producers in the world in 2018, by production volume. The 15 biggest producers represent about 1/3 of the global crude steel production.

 

Figure 25: World's largest crude steel producers in 2018, by production volume (Worldsteel)

 

 

Little information is publicly available about the level of integration of the different actors of the iron and steel sector. In 2013, McKinsey & company analysed the level of vertical integration for companies producing flat steel products (through hot rolling), as presented in Figure 26. This figure is adapted from the slide presented at an OECD workshop in Cape Town in 2014 (28). For information, this market represented about 130 million tonnes of production in 2008 (24). This tends to suggest that most companies (93 % of the hot-rolled coils producers) are producing semi-finished and finished products.

However, slabs are big products which are difficult to transport. For other types of semi-finished products, such as billets, transport is much easier, which might favour the trade of these products, and therefore the fragmentation of companies. No information about vertical integration for other types of products has been found. This might require the purchase of more accurate business data, or to get more information from the Technical Working Group.

 

Figure 26 : Percentage of global Hot-rolled steel coil production in 2013 (Adapted from: McKinsey Flat steel cost curve, company reports : S&P capital IQ)

 

 

11.1.4 Market by type of steel

No detailed statistics about the share of production by type of iron and steel products was found publicly. One source (29) reports that 90% of the market is plain carbon steel, leaving only 10% for low-alloyed and high-alloyed steel (including stainless steel). However, this is not a primary source, and the original source is not cited. Therefore, it is uncertain how trustable is this information. No other information on the market of each type of steel has been found publicly. Some market analysis report claim to contain this information and can be purchased.

 

Focus on stainless steel

As presented in § 1.1, stainless steel has a higher carbon footprint than any other type of steel. Global statistics consider all steel and iron products together without any distinction. As stainless steel has special characteristics, it can be considered as a different material than regular steel, with its specific application in different sectors. Global production statistics specific to this type of steel are presented in this section.

50.7 Million tonnes of stainless steel have been produced globally in 2018, which represents about 5% of the global steel production. The market for stainless steel has been strongly increasing in the last decades, with a compound annual growth rate of 5.4% per year on the period 1980-2018.

 

Figure 27: Evolution of the global stainless steel production (30)

 

 

Stainless steel is mainly used in metal products (appliances, cookware) and in mechanical engineering. Its target markets are therefore very different from un-alloyed and low-alloyed steel.

 

Figure 28 : Stainless steel use per sector in 2018 (30)

 

 

Some information about the global flows of stainless steel for the year 2005, including the amount of stainless steel remelted by the EAF route, can be found in a few scientific articles (31).

No publicly available data was found on the market structure of the stainless-steel global market (concentration, vertical integration, main players, etc.). A simple visit on the members page of the International Stainless-Steel Forum seems to indicate that most companies are dedicated to stainless steel production, while some of them are part of larger steel making corporations. More detailed information might be obtained by purchasing specialised business reports or asking TWG members.

 

Direct reduced iron production and trading

Midrex Technologies, Inc, developer of the leading direct reduction ironmaking technology, is compiling statistics about DRI production and trading (32). Classical iron reduction technologies (Blast furnace, Smelting reduction) produce hot metal, which needs to be loaded in a Basic Oxygen Furnace. These operations must be performed on the same plant, not to leave time for the hot metal to cool. DRI, on the other hand, can be stored and transported (33). Therefore, DRI is not necessarily produced on the same plant, and by the same company as the one producing steel. DRI can be produced by a company specialised in iron ore mining, before being shipped to steel making companies.

DRI is a spongy material, with high porosity, which reacts very easily with water (particularly sea water) and/or oxygen. Since the reaction is exothermic, heat is produced. Owing to its spongy structure, DRI is also an excellent insulator. Therefore, the excess heat produced in a DRI storage pile by, for example, the reoxidation with water does not easily dissipate. This can cause overheating and meltdown of DRI in piles, silos, or (most dangerously) ship holds. The reaction with water also produces Hydrogen which yields explosive mixtures with air.

Hot briquetting of DRI closes internal pores, lowers the accessible surface, increases the apparent density, and improves thermal conductivity, all of which reduce reactivity. Reoxidation and overheating of HBI is very unlikely. This results in considerable improvements of storage and transport characteristics. Additional advantages, such as higher density, improved handling, uniform product shape and size, as well as reduced fines production, are results of the physical characteristics of the HBI.

The evolution of the global DRI production is presented in Figure 28. HDRI refers to hot DRI, which is directly fed into an EAF for steel making. CDRI refers to cold DRI, which is cooled for storage and transportation.

Figure 29: World DRI production (left) and world DRI shipment (right) from 1970 to 2018 (32)

 

11.2   Technical description of iron & steel

 

11.2.1 Classification per type of alloys

Steel and cast iron are iron-based materials, alloyed with carbon. Depending on the share of carbon and other alloying materials, the molecular structure of the material and its technical properties can vary widely.

Several standards organizations have developed steel grades to classify steels by their composition and physical properties:

  • AISI/SAE steel grade standard (USA)
  • EN 10027 standard (European Union)
  • ISO/TS 4949:2016

They are rather different, so there is no single definition of each type of material. A classification of the main iron-based alloys is presented in the following figure. It gives a global view of the main families of products; however, the different types of steel can be defined differently in other classifications. For instance, the term “non-alloy steel” is sometimes used to refer to plain steel, which is classified under low-alloy steel in the figure.

 

Figure 30: Main families of iron-based alloys (34)

 

 

In the following paragraphs, the main types of iron and steel products are presented in more details. Production statistics are generally produced at a high level, merging all types of steel under “crude steel”. Therefore, no production statistics by type of steel could be found publicly.

 

Non-alloy / carbon steel / plain carbon / un-alloyed steel

These steels by definition do not contain any alloying element in specified proportions (i.e. beyond those normally present in commercially produced steel in industry). In practice, limit values are defined. Steel is considered un-alloyed if no alloy element exceeds the limit value presented in the following table.

Table 13. Limit value for steel alloy elements

Element Limit value Element Limit value
Al 0.3% Pb 0.4%
B 0.0008% Se 0.1%
Co 0.3% Si 0.6%
Cr 0.3% Te 0.1%
Cu 0.4% Ti 0.05%
La 0.1% V 0.1%
Mn 1.65% W 0.3%
Nb 0.06% Ze 0.05%
Ni 0.3%    

Non- alloy steel is typically divided into 4 categories namely

  • Low carbon steel or Mild steel (normally containing up to 0.3% carbon)
  • Medium carbon steel (normally containing 0.3 - 0.6% carbon)
  • High carbon steel (normally containing 0.6 - 1% carbon)
  • Ultra-high carbon steel (normally containing 1 – 2% carbon).

Non-alloy steel constitutes approx. 90% of total steel production, of which, mild steel takes the lion's share.

Above 2% of carbon content, the iron-carbon alloy is not called steel anymore.

 

Alloy steel

Strictly speaking, any steel is an alloy of iron and carbon. The term “alloy steel” is commonly used to ferrous alloys with a carbon content below 2% which is produced with intended amount of one or more alloying elements (other than carbon) in specified proportions to impart specific physical, mechanical, metallurgical and electrical properties.

Common alloying elements are manganese, silicon, nickel, lead, copper, chromium, tungsten, molybdenum, niobium, vanadium etc. Some of the common examples of alloy steels are:

STAINLESS STEEL: which essentially contains chromium (normally more than 10.5% with/without nickel or other alloying elements. As the name implies, stainless Steel resist staining/corrosion and maintains strength at high temperatures. Used widely in Utensils, architectures and in Industrial applications viz automotive & food processing products as well as medical & health equipment.

Commonly used grades (according to the SAE classification) of stainless steels (SS) are presented in the following table

Table 14 : Commonly used stainless steel grades according to the SAE classification

Type number Description Most common application
TYPE 304 Chrome - Nickel Austenitic SS more than half of SS produced in the world. 18:8 stainless steel (18% chromium, 8% nickel) used for utensils are the most common example
TYPE 316 Chrome - Nickel (Austenitic) SS containing 2-3% Molybdenum intended for specific industrial use.
TYPE 410 Plain Chromium (Martensitic) SS It is a low cost, heat treatable grade suitable for non-corrosive applications, with exceptional strength
TYPE 430 Plain Chrome (Ferritic) SS, offering general purpose corrosion resistance Often in decorative applications
TYPE 201/202 ETC Low Nickel Austenitic SS containing 2-5% Nickel Used as cheaper substitute of Type 304 grade for production of utensils.

SILICON-ELECTRICAL STEEL: which usually contains 0.6 - 6% silicon and exhibit certain magnetic properties, which make it suitable for use in transformers, power generators, and electric motors. They are normally supplied in 2 categories:

Table 15 : Categories of Silicon-electrical steel

Silicon-electrical steel category Description Most common application
CRGO Cold Rolled Grain Oriented Silicon-electrical steel sheets/strips normally recommended for use in transformers and generators.
CRNO/ CRNGO Cold Rolled Non-Grain Oriented Silicon-electrical steel sheets/strips recommended for use in rotating machines such as electric motors

HIGH SPEED STEEL: Alloy steel containing tungsten, vanadium, chromium, cobalt and other metals. Depending upon composition, they are classified as Cobalt Grade and Non-Cobalt Grade. Used for manufacture of cutting tools.

 

Special steel

Steel, in production of which special care has to be taken so as to attain the special/desired properties, such as, cleanliness, surface qualities and mechanical/ metallurgical properties.

 

Cast iron

Cast iron is a group of iron-carbon alloys with a carbon content greater than 2%. Cast iron is made from pig iron, which is the product of melting iron ore in a blast furnace. Cast iron can be made directly from the molten pig iron or by re-melting pig iron, often along with substantial quantities of iron, steel, limestone, carbon (coke) and taking various steps to remove undesirable contaminants. Phosphorus and sulfur may be burnt out of the molten iron, but this also burns out the carbon, which must be replaced. Depending on the application, carbon and silicon content are adjusted to the desired levels, which may be anywhere from 2–3.5% and 1–3%, respectively. If desired, other elements are then added to the melt before the final form is produced by casting.

Cast iron is sometimes melted in a special type of blast furnace known as a cupola, but in modern applications, it is more often melted in electric induction furnaces or electric arc furnaces. After melting is complete, the molten cast iron is poured into a holding furnace or ladle.

Cast iron is commonly used for engine blocks, machinery, fences, buildings and construction.

 

11.2.2  Iron and steel products shapes

Once liquid steel has been produced, it is casted, either through continuous casting or near net shape casting.

 

Continuous casting

Continuous casting is used to produce slabs, blooms or billets, which can later be formed through various hot rolling and cold rolling processes, into several types of products, as presented in Figure 31.

 

Figure 31: Flow line of hot- and cold-rolled sheet mill products (35)

 

 

Near net shape casting

Products with complex shapes, or made in an alloy which mechanical characteristics are not compatible with hot rolling, are formed using Near net shape casting (NNSC), means casting close to the final form and dimension of the final product so that the deformation (hot rolling) process can be minimized or even omitted. The use of NNSC methods can save a lot of material and energy even compared with the conventional continuous casting method. Intensive work in the field of NNSC is going on in several countries. The NNSC methods can be grouped as thin slab casting, strip casting and NNSC of long products, and rapid solidification processes (RSP).

 

Powder and granular metals

Liquid steel can also be turned into iron powder and granular iron. This represents however a very small share of the global iron and steel production, about 1 million tonnes of consumption in 2000 (36). This can be used for a variety of applications in Powder Metallurgy, welding, chemical, blasting, friction compounds, metallurgy and machining tools (37).

 

11.3 Relevant sector specific standards

 

11.3.1 Standards for sector-specific emissions accounting

 

European Union Emissions Trading system (EU-ETS)

The EU Emissions Trading System (ETS) is applicable to the iron and steel sector. As of February 2020 (38), there are 6 benchmarks values for the iron and steel manufacturing, presented in the table below, presented:

Product in ETS Description Related processes and emissions Benchmark value

Hot metal

(p 79)

Liquid iron saturated with carbon for further processing.“ The liquid iron is considered as product of blast furnaces. With the given system boundaries it also covered indirectly steel produced by the blast furnace route. Similar products such as ferroalloys are not covered by this product benchmark.

Direct emissions only (electricity excluded) for:

Blast furnace, Hot metal treatment units, Blast furnace blowers, Blast furnace hot stoves, Basic oxygen furnace, Secondary metallurgy units, Vacuum ladles, Casting units (including cutting), Slag treatment unit, Burden preparation, Blast furnace gas treatment unit, Dedusting units, Scrap pre-heating, Coal drying for pulverized coal injection (PCI), Vessels preheating stands, Casting ingots preheating stands, Compressed air production, Dust treatment unit (briquetting), Sludge treatment unit (briquetting), Steam injection in blast furnace unit, Steam generation plant, Converter basic oxygen furnace (BOF) gas cooling, Miscellaneous.

1.328 tCO2e /t product

Sintered ore

(p 142)

“Agglomerated iron-bearing product containing iron ore fines, fluxes and iron-containing recycling materials with the chemical and physical properties such as the level of basicity, mechanical strength and permeability required to deliver iron and necessary flux materials into iron ore reduction processes.”

Direct emissions only (electricity excluded) for:

sinter strand, ignition, feedstock preparation units, hot screening unit, sinter cooling unit, cold screening unit steam generation

0.171 tCO2e/t product

Coke

(p 40)

“Coke-oven coke (obtained from the carbonization of coking coal, at high temperature) or gas-works coke (by-product of gas-works plants) expressed as tons of dry coke. Lignite coke is not covered by this benchmark”

Direct emissions only (electricity excluded) for :

coke ovens, H2S/NH3 incineration, coal preheating (defreezing), coke gas extractor, desulphurization unit, distillation unit, steam generation plant, pressure control in batteries, biological water treatment, miscellaneous heating of by-products, hydrogen separator

0.286 tCO2e/t product

EAF carbon steel

(p 51)

Steel containing less than 8% metallic alloying elements and tramp elements to such levels limiting the use to those applications where no high surface quality and processability is required.

Direct and indirect emissions (including electricity) related to EAF production:

electric arc furnace, secondary metallurgy, casting and cutting, post-combustion unit, dedusting unit, vessels heating stands, casting ingots preheating stands, scrap drying, scrap preheating

Processes downstream of casting, e.g. rolling and reheating for hot rolling, are not included

0.283 tCO2 /t product

EAF high alloy steel

(p 55)

Steel containing 8% or more metallic alloying elements or where high surface quality and processability is required.

Same processes

  0.352 tCO2e /t product

Iron casting

(p 81)

Intermediate product used for the production of products in PRODCOM 27.21 and 27.51.

Direct and indirect emissions (including electricity) for cast iron production:

melting shop, casting shop, core shop and finishing

For the determination of indirect emissions, only the electricity consumption of melting processes within the system boundaries shall be considered.

0.325 tCO2e /t product

In our understanding, hot metal produced by smelting reduction is not covered by the EU ETS scheme (as this process is not commonly used in the EU). Moreover, the scope of the iron casting benchmark is unclear. Cast iron can be produced either in an EAF (by melting scraps and iron ingots), or by direct casting of hot metal from the Blast Furnace. EAF cast iron is the most common process in the EU, therefore the ETS benchmark might be applicable only to this process.

The EU Taxomony (39) defines that manufacturing of iron and steel is eligible if the GHG emissions (calculated according to the methodology used for EU-ETS benchmarks) associated to the production processes are lower than the values of the related EU-ETS benchmark. All low-carbon new steel production, or combination of new and recycled steel production, is eligible if the emissions fall below the thresholds presented in the table above.

 

EN 19694-2: 2016 and ISO/AWI TS 19694-2

The EU Taxonomy also refers to the EN 19694-2:2016 standard (Stationary source emissions - Greenhouse Gas (GHG) emissions in energy-intensive industries - Part 2: Iron and steel industry) (12), which provides a harmonized methodology for calculating GHG emissions and GHG performance in the steel industry. The following presentation is given in its abstract:

This European Standard applies to facilities producing any of the multiple products of the steel value chain. [It] deals with the specific aspects for the determination of GHG emissions from steel production and the assessment of emission performance. […] EN 19694-1 and EN 19694-2 provide a harmonized method for: a) measuring, testing and quantifying methods for the determination of greenhouse gas (GHG) emissions; b) assessing the level of GHG emissions performance of production processes over time, at production sites; c) the establishment and provision of reliable and accurate information of proper quality for reporting and verification purposes. In addition, this standard provides a stepwise approach for the determination of CO2 emissions and the assessment of CO2 performance of steel facilities, providing a set of methodologies allowing for a fair and reliable assessment of the CO2 performance of each individual process along the steel production value chain. It can be seen as a toolbox which enables the determination of CO2 emissions and the assessment of CO2 performance of steel production facilities at various levels of disaggregation, establishing a sound system for:

  • the evaluation of the global CO2 performance of a steel production facility taking its production structure into account;
  • setting a reliable basis for evaluation of the CO2 reduction potential in a facility and the contributing processes;
  • setting a basis for accurate evaluation of new technologies.

Next to the determination of the direct and indirect CO2 emissions of a steel facility, this standard has a strong focus on performance assessment which it strives to address through the following aspects:

  • assessment of CO2 impact, including process emissions: this methodology evaluates the total CO2 emission of a steel facility, with the carbon content of the waste gases burdened as CO2 to the processes giving rise to them;
  • assessment of the actual CO2 impact: this methodology evaluates the total CO2 emissions released by a steel facility, but considers waste gases exported or used in a power plant as equal to natural gas in terms of CO2 emissions;
  • carbon input CO2 performance at facility level: this methodology delivers an indicator comparing the facility performance with best practice, on the basis of the carbon input to the system;
  • CO2 performance assessment at process level: this methodology delivers a set of indicators comparing process performance with best practice at unit level.

These indicators are then combined as a consolidated figure for the whole facility. This methodology also provides a theoretical assessment of the CO2 saving potential up to best practice.

A similar standard is also available for the ferroalloy industry : EN 19694-6:2016, Stationary source emissions - Determination of greenhouse gas (GHG) emissions in energy-intensive industries - Part 6: Ferroalloy industry:

This European Standard provides a harmonized methodology for calculating GHG emissions from the ferro-alloys industry based on the mass balance approach . It also provides key performance indicators over time of ferro-alloys plants. It addresses the following direct and indirect sources of GHG:

  • Scope 1 - Direct GHG emissions from sources that are owned or controlled by the company, such as emissions result from the following sources:
    • smelting (reduction) process;
    • decomposition of carbonates inside the furnace;
    • auxiliaries operation related to the smelting operation (i.e. aggregates, drying processes, heating of ladles, etc.).
  • Scope 2 - Indirect GHG emissions from:
    • the generation of purchased electricity consumed in the company’s owned or controlled equipment.

This European Standard is to be used in conjunction with FprEN 19694-1, which contains generic, overall requirements, definitions and rules applicable to the determination of GHG emissions for all energy-intensive sectors, provides common methodological issues and defines the details for applying the rules. The application of this standard to the sector-specific standards ensures accuracy, precision and reproducibility of the results and is for this reason a normative reference standard. The requirements of these standards do not supersede legislative requirements.

Equivalent standards to EN 19694‑2 and EN 19694-6 are currently being worked on at the ISO level (Technical Specifications currently at the Approved Work Item stage) : ISO/AWI TS 19694‑2 (13) and ISO/AWI TS 19694-6 (40).

 

ISO 14404 family

The ISO 14404 family specifies a calculation method of carbon dioxide emission intensity from iron and steel production. It defines the boundary, CO2 emission factors and intermediate products for which upstream emissions are considered for each of the process routes, such as BF-BOF (part 1), Scrap-EAF (part 2) and DRI-EAF (part 3). ISO 14404 part 4 provides the guidance for calculating the CO2 intensity at all types of steel plants, including steel plants with process routes not covered in ISO 14404-1, 2, 3 (steel plants with process routes other than BF - BOF, Scrap - EAF, DRI - EAF) as well as steel plants with multiple process routes, by defining the boundary, CO2 emission factors and the intermediate products for which upstream emissions are considered for each of all types of steel plants. ISO 14404 part 4 also includes Universal Calculation Sheet, which covers all relevant emission sources from ISO 14404-1, 2, 3, to assist the calculation of CO2 emissions.

This family of standards is composed of 4 different standards, 3 being already published:

  • ISO 14404-1:2013 (41): Calculation method of carbon dioxide emission intensity from iron and steel production — Part 1: Steel plant with blast furnace ;
  • ISO 14404-2:2013 (42): Calculation method of carbon dioxide emission intensity from iron and steel production — Part 2: Steel plant with electric arc furnace (EAF) ;
  • ISO 14404-3:2017 (43): Calculation method of carbon dioxide emission intensity from iron and steel production — Part 3: Steel plant with electric arc furnace (EAF) and coal-based or gas-based direct reduction iron (DRI) facility ;
  • ISO/DIS 14404-4 (44): Calculation method of carbon dioxide emission intensity from iron and steel production — Part 4: Guidance for using ISO 14404 family.

Unlike EN 19694-2, the procedure described in the ISO 14404 family does not require to measure actual emissions occurring at the plants. Emissions are estimated from the amount of materials consumed by the plan (e.g. coking coal), and the amount of material produced (e.g. amount of carbon in the steel produced), using constant conversion factors defined in the standard. This concept is shown in Figure 32.

 

fig_1
Figure 32: Conceptual diagram of calculation method in the ISO 14404 family (44)

 

 

In addition, ISO 14404 family provides the guidance to consider the activities in the boundary that are located outside of the site boundary by considering the upstream emissions of the intermediate products produced in such “outsourced steel production activities”. The conceptual diagram of boundary and site boundary is shown in Figure 33.

 

fig_2
Figure 33: Conceptual diagram of boundary and site boundary (44)

 

 

Intermediate products with possibilities of considering upstream emissions include the following:

  • Electricity / steam
  • Substances produced in the basic activities existing in the target process route (eg purchased coke used in the BF - BOF route)
  • Substances that substitute the iron source of the process route even if they do not exist in the target process route (eg purchased DRI used in the BF - BOF route)

Moreover, ISO 14404 part 4 provides additional guidance to the entire ISO 14404 family for the following topics, which have not been covered by ISO 14404-1, 2, 3.

a) Evaluation of exported slags

b) Evaluation of by-product gas

c) Evaluation of stock

d) Selection of calorific values and emission factors for electricity and fuel

Regarding indirect emissions, this standard makes a distinction between categories:

  • “upstream CO2 emissions”, which are CO2 emissions from imported material related to outsourced steel production activities outside the site boundary and from imported electricity and steam into the site boundary3
  • “energy indirect GHG emissions”, which are CO2 emissions from imported electricity and steam.
  • “other indirect GHG emissions”, which are CO2 emissions from imported material (e.g. iron ore mining, coal mining and transportation, etc…).

 

Worldsteel CO2 emissions data collection

The ISO 14404 family of standards is based on the “CO2 Emissions Data Collection User Guide” (20) established by the World Steel Association. Actual data collection among worldsteel members has been conducted yearly based upon this guide since 2007.

The methodology of this tool is described with high level equations, and the document includes an annex with emissions factors for the typical inputs and by-products of an iron and steel plant.

 

11.3.2 Sectoral initiatives for sustainability certification

 

ResponsibleSteel standard

ResponsibleSteel, a global multi-stakeholder standard and certification initiative for steel, has published a standard (45) at the end of 2019. It aims to:

  1. Define the fundamental elements that characterise the responsible sourcing and production of steel, to the satisfaction of downstream customers, users and civil society supporters;
  2. Define levels of performance in the implementation of these fundamental elements that:
    1. Encourage the broad participation of steelmakers in both developed and developing countries in the ResponsibleSteel programme;
    2. Merit the recognition and endorsement of the programme’s civil society supporters;
    3. Maximise steel’s contribution to a sustainable society through the responsible sourcing of its raw materials and management of the impacts of its production.

The ResponsibleSteel standard consists of twelve principles for the responsible sourcing and production of steel, covering many aspects of sustainability. Each of the twelve ResponsibleSteel principles is the basis for a number of criteria and underlying requirements. Conformity with the ResponsibleSteel standard is audited at the level of the requirements specified for each criterion. For a site to achieve and maintain certification there must be no major non-conformities with any requirement. Minor non-conformities do not preclude certification but must be corrected.

Several of these principles are in line with the ACT modules, in particular:

  • Principle 1: Corporate Leadership
  • Principle 2: Social, Environmental and Governance Management Systems
  • Principle 6: Stakeholder Engagement and Communication
  • Principle 8: Climate change and Greenhouse gases Emissions

Principle 8 aims at demonstrating that the corporate owners of ResponsibleSteel certified sites are committed to the global goals of the Paris Agreement, and both certified sites and their corporate owners are taking the actions needed to demonstrate this commitment. It includes criteria, presented in the following table

Table 16: Criteria of the responsiblesteel standard related to GHG emissions reduction

Criterion Description
8.1: Corporate commitment to achieve the goals of the Paris Agreement The site’s corporate owner has defined and is implementing a long- and medium-term strategy to reduce its greenhouse gas (GHG) emissions to levels that are compatible with the achievement of the goals of the Paris Agreement, with an aspiration to achieve net-zero GHG emissions through work with policy makers and others.
8.2: Corporate Climate-Related Financial Disclosure The site’s corporate owner is implementing the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).
8.3: Site-level GHG emissions measurement and intensity calculation The site measures and records key aspects of its GHG emissions in accordance with a recognised international or regional standard
8.4: Site-level GHG reduction targets and planning There is a medium-term GHG emissions target and plan for the site that is aligned with the achievement of the corporate owner’s corporate level GHG emissions target(s).
8.5: Site-level GHG or CO2 emissions reporting and disclosure Key aspects of the site’s GHG or CO2 emissions measurements are publicly reported on an annual basis

For steelmaking sites, ResponsibleSteel requires targets to be defined in terms of the GHG emissions intensity of crude steel production (metric tonnes of CO2 equivalent/ metric tonne crude steel), calculated in accordance with the following international or regional standards:

  • The GHG Protocol and EN 19694 (parts as applicable) for measurement of GHG emissions by steelmaking and other sites.
  • ISO 14404 (parts as applicable) for the measurement of CO2 emissions by steelmaking sites, as applicable.

The final version of the standard (45) requires site-level targets to be below the average trajectory required to achieve the corporate owner’s overall corporate level target, OR, if this is not the case, the corporate owner must demonstrate that in combination its sites are on track to achieve its corporate level target.

A previous draft version of the standard (46) included more demanding criteria, with specific requirements for plants according to the steel production route.

 

12.Low carbon transition

 

12.1 Low carbon Technology landscape

 

GHG emissions in the iron and steel sector are mainly occurring at two main steps:

  • When iron ore is reduced using a carbon-based material (mainly coke, but also natural gas or oil), CO2 is released.
  • Steel production requires high temperatures for the correct chemical reactions to happen, which needs energy. Currently, most of this energy is produced by fossil fuels.

The main approaches for reducing GHG emissions in the iron and steel sector are therefore:

  • Improving the energy efficiency of the existing production processes
  • Developing new low-CO2 steel making technologies, by switching to an iron ore reduction technology which does not rely on fossil carbon
  • Improving the material efficiency along the value chain of steel, which includes reducing the demand for steel (for instance by using other lower carbon materials)
  • Favouring industrial symbiosis, in order to use the exhaust gases and other undesired outputs of steel making as inputs for other industrial sectors.

These 4 main approaches are detailed in the following sections. The presentation from IEA has been used as the main source for this section. Additional information on technologies can also be found on the Industrial Efficiency Technology Database (47), which list many technologies and measures that improve productivity and profits while reducing energy consumption and CO2 emissions in industry. For each process in the value chain, technologies are presented, as well as their energy savings potential, CO2 emission potential, costs and development status.

The database is available at : http://www.iipinetwork.org/wp-content/Ietd/content/iron-and-steel.html

 

12.1.1 Improving energy efficiency

Energy efficiency has been a focus of many industries for a few decades now, as it is key for the economic performance of the sector. The energy efficiency of the main current production routes can still be improved. However, as shown on Figure 34, there is a thermodynamic limit to the energy efficiency of the BF-BOF route, which current plants are approaching.

 

 

Figure 34: improvement of energy intensity for pig iron production since 1800 (26)

Therefore, higher improvements can be obtained by developing the share of the best-available technologies for steel production. Figure 35presents the CO2 intensity of steel production for some existing technologies. In particular, the development of the DRI/EAF route, which enables to produce steel from iron ore with the same technical properties as steel from the BF/BOF route, could provide significant improvements. Very few plants are currently operating with this process, which is significantly more costly to operate.

 

Figure 35 : CO2 intensity of steel production with currently available technologies (48)

 

 

12.1.2  Alternative low-CO2 steel technologies

The improvement of existing production route will not be sufficient to achieve the ambitious targets regarding climate mitigation. Therefore, the iron and steel sector is working on developing alternative low-carbon technologies for producing steel. An overview of the main avenues of research is presented in Figure 36

 

Figure 36: Avenues of research for innovative steel production (26)

 

 

They can be grouped in two types of technologies (26):

  • CO2 management technologies:
    • Upgraded smelting reduction. Maximises the CO2 content of the off gases through pure oxygen operation, facilitating CO2 capture. Pilot trials currently underway. Avoids the need for coke or sinter. [Large pilot demonstration TRL 6-7]
    • Oxy blast furnace and top gas recycle: The CO2 content of the top gas is raised by replacing the air in the blast furnace with oxygen and recycling the top gas. Lowers coke requirements. [Large pilot demonstration TRL 6]
    • Upgraded DRI process (based on natural gas) that reuses off-gases from the shaft as a reducing agent after CO2 capture. [Paper studies]
    • Coke oven gas (COG) reforming: Increasing the hydrogen concentration of COG through reforming tar to reduce net energy consumption. Through integration with oxy blast furnaces, CO2 capture can be added.
    • Hydrogen from renewable electricity for DRI production [Pre-feasibility]
    • Direct use of electricity to reduce iron ore relying on renewable electricity. [Intermediate TRLs]
  • CO2 avoidance:
    • Hydrogen from renewable electricity for DRI production [Pre-feasibility]
    • Direct use of electricity to reduce iron ore relying on renewable electricity. [Intermediate TRLs]

12.1.3  Material efficiency from cradle to grave

Improving the material efficiency is one of the main leads to reduce the GHG emissions in the sector. This would mainly result in the decrease of global demand for steel, through 4 main levers, as presented inFigure 37. This lever would require commitment of all the actors along the value chain : steel producers represent only a part rather than the entirety of the value chain. They have limited influence on this lever, and should develop an alternative business model which does not rely on selling bigger and bigger amounts of products.

 

Figure 37: Main measures to improve material efficiency in the iron and steel sector

 

Improving material efficiency will also require an increase in recycling of steel (even if this should be considered as the lowest priority among the other possible actions). One of the main challenges to overcome regarding steel recycling is contamination by other metals. Nakajima et al. (49) identify copper and tin as the most important contaminants. Concentrations of copper over 0.1 wt % (percentage in mass) cause hot shortness, a phenomenon leading to surface cracking in hot rolling and forming. Tin exacerbates hot shortness, even at concentrations as low as 0.04 wt %.

Copper’s effect on steel has been known for a long time, but the problem has so far been relatively easy to handle, because secondary steel demand has been limited. Looking ahead, four key strategies need to be implemented (48):

  • Improved separation at end of life: The first step is to avoid adding high-copper scrap to otherwise clean flows, as is often done today to dispose of flows such as copper-alloyed steel or some vehicle scrap. Beyond this, it will be necessary to increase the separation of copper and steel in the recycling process. This already happens to some extent, but practices vary widely, and the extent of sorting fluctuates with the copper price, since re­moving copper can be costly, manual work. To avoid the cost of manual labour, more technologies for automated sorting are being developed. More closed-loop recycling would also be necessary to keep some scrap flows very pure and enable the use of scrap in especially copper-sensitive applications.
  • Product design for reduced contamination: The design of products can also improve the sorting process. Design principles for recycling and for disassembly could facilitate the removal of copper components by making them easier to see and to access and remove. Material substitution is sometimes an option, such as replacing copper cables and wires with optic fibre or aluminium equivalents.
  • Metallurgy to increase copper tolerance: Production processes can be designed to be more tolerant to copper by avoiding the temperature interval where copper causes problems. Although not in itself a long-term solution, this mitigates the problem.
  • Separation of copper from steel: There is currently no commercially-viable method for removing copper from steel once it has been added. Some assessments have been pessimistic that this will ever be viable. Nonetheless, some research is ongoing into methods such as sulphide slagging, vacuum distillation and the use of O2/Cl2 gas.38 What will it take for these measures to take root? Arguably, current markets are poorly equipped to really account for the impact of current practices on the long-term quality of the global steel stock. Therefore, it may be necessary to consider regulation as the route to address copper pollution before it becomes a significant problem for future steel recycling.

 

12.1.4 Industrial symbiosis

The final approach consists in favouring industrial symbiosis by valorising the outputs of the steel production process as inputs for other industrial sectors. To some extent, this has been a common practice, as it is currently quite common to use blast furnace slag to produce cement. While solid outputs are currently valorised when possible as they cost money to manage, little has been done regarding gaseous outputs. A few examples of possible industrial symbiosis are presented in Figure 38.

 

Figure 38: Possible industrial symbiosis for the iron and steel sector (26)

 

 

12.2 Low carbon pathways

A literature review has been performed in order to identify low carbon pathways for the iron & steel sector.

Description of the literature review work

34 distinct scenarios and roadmaps have been identified from various sources:

  • Energy Technology Perspectives 2020, from the IEA (26), to be released
  • Energy Technology Perspectives 2017 from the IEA (50), presenting 3 pathways at the world level until 2060
  • Energy Technology Perspectives 2016 from the IEA (51), including the 6DS scenario
  • Industrial innovation : Pathways to deep decarbonization of Industry, built for the European Commission, DG Climate in 2019 (52), presenting 8 scenarios for a low carbon steel in Europe
  • Eurofer Low Carbon Roadmap (53), from November 2019, presenting 6 scenarios for a low carbon steel production in Europe
  • Decarbonisation pathways for key economic sectors, developed as part of the Reinvent project in 2017 (54), including 2 pathways up to 2050 in Europe.
  • Industrial Transformation 2050, from Material economics in 2019 (48), presenting 3 scenarios at the EU-28 level.
  • Business strategy in (and for) a decarbonised world: Case study of the steel industry, from Carbone 4 in 2019 (55), including an alternative scenario to the 2DS scenario from IEA.
  • Prospective scenarios on Energy Efficiency and CO2 Emissions in the EU Iron & Steel industry, developed by the EU Joint Research Center in 2012 (56), presenting 5 possible roadmaps for the EU up to 2030.
  • Industrial decarbonization and energy efficiency roadmaps to 2050, developed for the UK government in 2015 (57), presenting 4 pathways at the UK level.

Those scenarios have been analyzed according to several criteria :

  • Study description:
    • Name of the study and source
    • Developer: Organisation who developed the scenario
    • Year of publication
  • Study main assumption:
    • Geographical coverage
    • Time coverage : starting year, horizon year and steps
    • Model: description of the model used for the scenario development
    • Type of activities covered: which activities in the iron & steel sectors were included in the emission accounting
    • Boundaries: which emissions were included in the accounted (scope 1 only, scope 1 & 2, scope 1 & 2 + hydrogen production, etc…)
    • Scenario coherence: Was the scenario developed independently or consistently with other sectors, including the interactions between those sectors?
  • Scenario description:
    • Scenario name
    • Scenario description
    • Level of ambition: target of emission per kg of crude steel at the horizon year
  • Main scenario assumptions :
    • Steel production: Amount of steel to be produced in the scenario
    • Technologies for iron&steel production: which technologies have been mainly used in the scenario?
    • Recycling and reuse: assumptions regarding the use of iron scrap
    • Material efficiency and substitution: assumptions regarding
  • Main results:
    • Electricity use in 2050: amount of (CO2 free) electricity consumed by the iron & steel sector in 2050 (per year and/or per kg crude steel produced)
    • Hydrogen use in 2050 : amount of hydrogen consumed by the iron & steel sector in 2050 (per year and/or per kg crude steel produced)
    • CO2 stored in 2050 : amount of CO2 captured in the iron & steel sector in 2050, without any downstream reemission (per year and/or per kg crude steel produced)

 

12.2.2 Analysis of pathways

For readability, the table is not included in this report. An Excel file is included as an annex to this report.

 

12.2.3 Main conclusions

After this first review, the following observations can be made:

  • A lot of work has already been performed on the low carbon transition in the iron & steel sector.
  • IEA scenarios are the only ones which have been identified at the world level. Carbone 4 also proposed an adapted scenario which is claimed to be based on assumptions closer to historical trends.
  • IEA has not yet published its Technology roadmap for the iron&steel sector. Therefore, the only information available on the 2DS and B2DS scenarios for this sector is scarce. Only a Powerpoint presentation from March 2019 has been identified. Results are available for building a Benchmark for quantitative indicators in ACT, however, the assumptions used for calculating this pathway are not transparent.
  • Most pathways have been identified at the EU level.
  • Many scenarios imply a very significant increase in electricity consumption by 2050 (up to 5 times the current consumption by the sector in Europe, which is already producing a high share of its steel through EAF). Due to the dependency of the steel sector to the electric sector, two solutions can be considered:
    • Using an indicator on scope 1 emissions, and selecting a scenario which is coherent with the one which has been used for the Electric Utilities sector (i.e. IEA 2DS).
    • Using an indicator on scope 1+2 emissions, and producing a benchmark which includes both types of emissions.
  • Some scenarios rely heavily on Carbon Capture (CCS/CCU), while acknowledging that this technology cannot be developed by the Iron & Steel sector on its own.

 

12.3 IDENTIFICATION OF THE TECHNOLOGIES USED TO DECARBONIZE THE IRON AND STEEL SECTOR and distinction between mature and mon mature technologies

 

The Table 17 is used for IS 3.1 Intangible investment module calculation.

This table has been built with IEA website and IIPI network. This table is not exhaustive and should be update according to the development progress of technologies.

Technology Readiness Level (TRL) from IEA: IEA explaining acronyms  
1. Initial idea: basic principles have been defined Non mature technologies
2. Application formulated: concept and application of solution have been formulated  
3. Concept needs validation: solution needs to be prototyped and applied  
4. Early prototype: prototype proven in test conditions  
5. Large prototype: components proven in conditions to be deployed  
6. Full prototype at scale: prototype proven at scale in conditions to be deployed  
7. Pre-commercial demonstration: solution working in expected conditions  
8. First-of-a-kind commercial: commercial demonstration, full-scale deployment in final form Mature technologies
9. Commercial operation in relevant environment: solution is commercially available, needs evolutionary improvement to stay competitive  
10. Integration at scale: solution is commercial but needs further integration efforts  
11. Proof of stability: predictable growth  
TRL (proposition Solinnen): IIPI network explaining acronyms  
1-3 Research Non mature technologies
4-7 Demonstration  
8-11 Commercial Mature technologies

Table 17: MATURE AND NON-MATURE TECHNOLOGIES FOR IS 3.1 INDICATOR CALCULATION

Activity Technology or Measure TRL (Proposition based on IEA and IIPI network status) Distinction non-mature and mature technologies
Basic Oxygen Furnace Automated Steel Cleanliness Analysis Tool 1-3 Non mature technologies
Basic Oxygen Furnace Aluminum Bronze Alloy to Improve Hood, Roof and Sidewall Life 4-7 Non mature technologies
Basic Oxygen Furnace In-Situ Real-Time Measurement of Melt Constituents 4-7 Non mature technologies
Basic Oxygen Furnace Recycling of BOF steelmaking slag 4-7 Non mature technologies
Basic Oxygen Furnace BOF Heat and Gas Recovery 8-11 Mature technologies
Basic Oxygen Furnace BOF Bottom Stirring 8-11 Mature technologies
Basic Oxygen Furnace Improved Process Monitoring and Control 8-11 Mature technologies
Basic Oxygen Furnace Improved Ladle Preheating 8-11 Mature technologies
Basic Oxygen Furnace Variable Frequency Drives on Ventilation Fans 8-11 Mature technologies
Basic Oxygen Furnace ProVision Lance-Based Camera System for Vacuum Degasser 8-11 Mature technologies
Basic Oxygen Furnace Laser Contouring System 8-11 Mature technologies
Basic Oxygen Furnace MultiGas Analyzer 8-11 Mature technologies
Basic Oxygen Furnace Improving System Life of BOF and EAF Hoods,Roofs and Side Vents 8-11 Mature technologies
Basic Oxygen Furnace Steel Slag Usage in Cement 8-11 Mature technologies
Blast Furnace System Hydrogen enrichment + CO2 removal - use of works arising gases / CCUS 5 Non mature technologies
Blast Furnace System Conversion of steel works arising gases to chemicals 7 Mature technologies
Blast Furnace System Partial electrolytic hydrogen replacement of injected coal 7 Mature technologies
Blast Furnace System Partial torrefied biomass replacement of injected goal 7 Mature technologies
Blast Furnace System CCU / Conversion of steel works arising gases to chemicals 7 Mature technologies
Blast Furnace System Conversion of steel works arising gases to fuel 8 Mature technologies
Blast Furnace System COURSE 50 1-3 Non mature technologies
Blast Furnace System Top Gas Recycling Blast Furnace 1-3 Non mature technologies
Blast Furnace System Slag Heat Recovery 1-3 Non mature technologies
Blast Furnace System Extended Universal Fuel Gas Measuring Device 1-3 Non mature technologies
Blast Furnace System Biomass use in BF 4-7 Non mature technologies
Blast Furnace System Charging Carbon Composite Agglomerates 4-7 Non mature technologies
Blast Furnace System Use of High Quality Ore 8-11 Mature technologies
Blast Furnace System Pulverized Coal Injection 8-11 Mature technologies
Blast Furnace System Top Pressure Recovery Turbines 8-11 Mature technologies
Blast Furnace System Increased Blast Furnace Top Pressure (> 0.5 Bar Gauge) 8-11 Mature technologies
Blast Furnace System Improved Hot Stove Process Control 8-11 Mature technologies
Blast Furnace System Blast Furnace Process Control 8-11 Mature technologies
Blast Furnace System Heat Recuperation from Hot Blast Stoves 8-11 Mature technologies
Blast Furnace System Increased Hot Blast Temperature (>1 000 oC) 8-11 Mature technologies
Blast Furnace System Improved Combustion in Hot Stoves 8-11 Mature technologies
Blast Furnace System Injection of Coke Oven Gas 8-11 Mature technologies
Blast Furnace System Improved Recovery of Blast Furnace Gas 8-11 Mature technologies
Blast Furnace System Bell Less Top Charging System 8-11 Mature technologies
Blast Furnace System Injection of Oil 8-11 Mature technologies
Blast Furnace System Natural Gas Injection 8-11 Mature technologies
Blast Furnace System Dry Dedusting of Blast Furnace Gas 8-11 Mature technologies
Blast Furnace System Plastic Waste Injection 8-11 Mature technologies
Blast Furnace System Oxy-Oil Injection 8-11 Mature technologies
Blast Furnace System Residue Injection 8-11 Mature technologies
Blast Furnace System Improvement of Hearth Drainage Efficiency and Refractory Life 8-11 Mature technologies
Blast Furnace System Charcoal Use 8-11 Mature technologies
Casting In-Situ Real-Time Measurement of Melt Constituents 4-7 Non mature technologies
Casting Continuous Temperature Monitoring and Control 4-7 Non mature technologies
Casting MGGate for Continuous Caster 4-7 Non mature technologies
Casting Elimination or minimization of oscillation marks 4-7 Non mature technologies
Casting Continuous Casting 8-11 Mature technologies
Casting Efficient Ladle Preheating 8-11 Mature technologies
Casting Direct Rolling (Integrated Casting and Rolling) 8-11 Mature technologies
Casting Endless Strip Production (ESP) 8-11 Mature technologies
Casting Thin Slab Casting - Near Net Shape Casting 8-11 Mature technologies
Casting Strip Casting – Castrip® Process 8-11 Mature technologies
Casting Strip Casting 8-11 Mature technologies
Casting Integrated Casting and Rolling 8-11 Mature technologies
Casting Using Unheated Tundish 8-11 Mature technologies
Casting On-line Laser-ultrasonic Measurement system 8-11 Mature technologies
Coke making COURSE 50 1-3 Non mature technologies
Coke making Single Chamber System 4-7 Non mature technologies
Coke making SCOPE 21 - Next Generation Coke Making Technology 4-7 Non mature technologies
Coke making Coke Dry Quenching 8-11 Mature technologies
Coke making Additional Use of Coke Oven Gas 8-11 Mature technologies
Coke making Automation and Process Control System 8-11 Mature technologies
Coke making Coal Stamp Charging Battery 8-11 Mature technologies
Coke making Coal Moisture Control 8-11 Mature technologies
Coke making Non-Recovery Coke Ovens 8-11 Mature technologies
Coke making Variable Speed Drive Coke Oven Gas Compressors 8-11 Mature technologies
Coke making Coke Stabilization Quenching 8-11 Mature technologies
Direct Reduced Iron CCUS / Physical absorption 5 Non mature technologies
Direct Reduced Iron Reduction using solely electrolytic hydrogen 5 Non mature technologies
Direct Reduced Iron Based on natural gas with high levels of electrolytic hydrogen blending 7 Mature technologies
Direct Reduced Iron CCUS / Chemical absorption 9 Mature technologies
Direct Reduced Iron Sustainable Steelmaking using Biomass and Waste Oxides 1-3 Non mature technologies
Direct Reduced Iron Suspended Hydrogen Reduction of Iron Oxide Concentrates 1-3 Non mature technologies
Direct Reduced Iron ULCORED 1-3 Non mature technologies
Direct Reduced Iron MXCOAL™ - Midrex© with Coal Gasification 4-7 Non mature technologies
Direct Reduced Iron Paired Straight Hearth Furnace 4-7 Non mature technologies
Direct Reduced Iron Midrex© Process 8-11 Mature technologies
Direct Reduced Iron HYL III Process 8-11 Mature technologies
Direct Reduced Iron FASTMET© & FASTMELT© 8-11 Mature technologies
Direct Reduced Iron ITmk3® Process 8-11 Mature technologies
Direct Reduced Iron Midrex with CO2 Removal System 8-11 Mature technologies
Direct Reduced Iron Coal-Based HYL Process 8-11 Mature technologies
Direct Reduced Iron Dust Recylcing in Rotary Hearth Furnace 8-11 Mature technologies
Direct Reduced Iron SL/RN Process 8-11 Mature technologies
Direct Reduced Iron Waste Heat Recovery for Rotary Kiln Direct Reduction 8-11 Mature technologies
Direct Reduced Iron Finmet 8-11 Mature technologies
Direct Reduced Iron Iron Carbide Process 8-11 Mature technologies
Direct Reduced Iron Circored 8-11 Mature technologies
Direct Reduced Iron Redsmelt 8-11 Mature technologies
Electric Arc Furnace Waste Heat Recovery for EAF 1-3 Non mature technologies
Electric Arc Furnace Injection of Aluminium instead of Ferrosilicon for Stainless Steel Making in EAF 1-3 Non mature technologies
Electric Arc Furnace Model Based Steel Temperature Measurement 1-3 Non mature technologies
Electric Arc Furnace Hydrogen and Nitrogen Control in Ladle and Casting Operations 1-3 Non mature technologies
Electric Arc Furnace ECOARC 4-7 Non mature technologies
Electric Arc Furnace Used Tires for Insulation in EAF 4-7 Non mature technologies
Electric Arc Furnace New-Scrap Based Steelmaking Process using Primary Energy 4-7 Non mature technologies
Electric Arc Furnace Holistic Quality Driven Production Control 4-7 Non mature technologies
Electric Arc Furnace Development of a process to continuously melt, refine and cast high quality steel 4-7 Non mature technologies
Electric Arc Furnace Improved Process Control (Neural Networks) 8-11 Mature technologies
Electric Arc Furnace EAF Controls 8-11 Mature technologies
Electric Arc Furnace Oxyfuel Burners/Lancing 8-11 Mature technologies
Electric Arc Furnace Flue Gas Monitoring and Control 8-11 Mature technologies
Electric Arc Furnace Post Combustion Optimization in Steelmaking 8-11 Mature technologies
Electric Arc Furnace Hot DRI/HBI Charging to EAF 8-11 Mature technologies
Electric Arc Furnace Foamy Slag Practices 8-11 Mature technologies
Electric Arc Furnace Scrap Preheating 8-11 Mature technologies
Electric Arc Furnace Bottom Stirring/Stirring Gas Injection 8-11 Mature technologies
Electric Arc Furnace Shaft Furnace Scrap Preheating 8-11 Mature technologies
Electric Arc Furnace Tunnel Furnace Preheating – CONSTEEL Process 8-11 Mature technologies
Electric Arc Furnace Direct Current (DC) Arc Furnace 8-11 Mature technologies
Electric Arc Furnace Airtight EAF Process 8-11 Mature technologies
Electric Arc Furnace Adjustable Speed Drives (ASDs) 8-11 Mature technologies
Electric Arc Furnace Comelt 8-11 Mature technologies
Electric Arc Furnace Contiarc Furnace 8-11 Mature technologies
Electric Arc Furnace Twin-Shell DC Arc Furnace 8-11 Mature technologies
Electric Arc Furnace Post Combustion of EAF Flue Gas 8-11 Mature technologies
Electric Arc Furnace Engineered Refractories 8-11 Mature technologies
Electric Arc Furnace Eccentric Bottom Tapping 8-11 Mature technologies
Electric Arc Furnace Ultra High Power (UHP) Transformers 8-11 Mature technologies
Electric Arc Furnace Optimal Charge Calculation in EAF 8-11 Mature technologies
Electric Arc Furnace Dynamic Asymmetrical Control of AC EAF 8-11 Mature technologies
Electric Arc Furnace Modification of Side Wall Water Cooled Panels and Water Header 8-11 Mature technologies
Ore electrolysis Low temperature alkaline electrolysis (110°C) 4 Non mature technologies
Ore electrolysis High temperature molten oxide electrolysis (>1500°C) 4 Non mature technologies
Ore electrolysis Reducing metal forming losses and lightweighting / Additive manufacturing 7 Mature technologies
Rolling Mills Preventing Scale Formation in Rolling 1-3 Non mature technologies
Rolling Mills Extended Universal Fuel Gas Measuring Device 1-3 Non mature technologies
Rolling Mills High Temperature Membrane Module for Oxygen Enrichment of Combustion Air 1-3 Non mature technologies
Rolling Mills Thermochemical Recuperation for High Temperature Furnaces 4-7 Non mature technologies
Rolling Mills Novel Post Combustion Method 4-7 Non mature technologies
Rolling Mills Model Based Closed-Loop Oxygen Control 4-7 Non mature technologies
Rolling Mills Innovative Reheat Furnace Management 4-7 Non mature technologies
Rolling Mills Development of Oxygen-rich Furnace System for reduced CO2 and NOx emissions 4-7 Non mature technologies
Rolling Mills Oscillating Combustion 4-7 Non mature technologies
Rolling Mills Process Control in Hot Strip Mill 8-11 Mature technologies
Rolling Mills Proper Reheating Temperature 8-11 Mature technologies
Rolling Mills Throughput Optimisation in Rolling Mills 8-11 Mature technologies
Rolling Mills Oxgen Level Control and VSDs on Combustion Fans 8-11 Mature technologies
Rolling Mills Pressure Control for Furnace 8-11 Mature technologies
Rolling Mills Avoiding Furnace Overloading 8-11 Mature technologies
Rolling Mills Energy Efficiency Drives for Rolling Mills 8-11 Mature technologies
Rolling Mills Regenerative Burners for Reheating Furnaces 8-11 Mature technologies
Rolling Mills Flameless Burners - Dilute Oxygen Combustion 8-11 Mature technologies
Rolling Mills Walking Beam Furnace 8-11 Mature technologies
Rolling Mills Recuperative Burners 8-11 Mature technologies
Rolling Mills Installing Lubrication Systems 8-11 Mature technologies
Rolling Mills Improved Insulation of Reheating Furnace 8-11 Mature technologies
Rolling Mills Hot Charging 8-11 Mature technologies
Rolling Mills Cold Rolling - Reducing Losses on Annealing Line 8-11 Mature technologies
Rolling Mills Cold Rolling - Automated Monitoring and Targeting System. 8-11 Mature technologies
Rolling Mills Cold Rolling - Reduced Steam Use in the Acid Pickling Line 8-11 Mature technologies
Rolling Mills Cold Rolling - Continuous Annealing Furnace 8-11 Mature technologies
Rolling Mills Heat Recovery to the Product 8-11 Mature technologies
Rolling Mills Heat Recovery from Cooling Water 8-11 Mature technologies
Rolling Mills Thin Slab Casting - Near Net Shape Casting 8-11 Mature technologies
Rolling Mills Endless Strip Production (ESP) 8-11 Mature technologies
Rolling Mills Strip Casting – Castrip® Process 8-11 Mature technologies
Rolling Mills Integrated Casting and Rolling 8-11 Mature technologies
Rolling Mills Thin Slab Casting 8-11 Mature technologies
Rolling Mills Strip Casting 8-11 Mature technologies
Sinter plant Wood Char in Sintermaking 4-7 Non mature technologies
Sinter plant Waste Heat Recovery in Sinter Plant 8-11 Mature technologies
Sinter plant Improved Process Control and Quality Assurance 8-11 Mature technologies
Sinter plant Improved Ignition Oven Efficiency with Multi-Slit Burners 8-11 Mature technologies
Sinter plant Emissions Optimized Sintering 8-11 Mature technologies
Sinter plant Selective Waste Gas Recycling - EPOSINT Process 8-11 Mature technologies
Sinter plant Improved (Segregated) Charging of Materials 8-11 Mature technologies
Sinter plant Low Emissions and Energy Optimised Sintering Process 8-11 Mature technologies
Sinter plant Sectional Gas Recirculation 8-11 Mature technologies
Sinter plant Leakage Reduction in Sinter Plant 8-11 Mature technologies
Sinter plant District Heating Using Waste Heat 8-11 Mature technologies
Sinter plant Curtain Flame Ignition System 8-11 Mature technologies
Sinter plant Utilization of Waste Fuels in Sintering 8-11 Mature technologies
Sinter plant Pelletized Blast Furnace Dust 8-11 Mature technologies
Sinter plant Control Modules 8-11 Mature technologies
Smelting reduction Smelting reduction based on hydrogen plasma 4 Non mature technologies
Smelting reduction Enhanced smelting reduction / CCUS 8 Mature technologies