"In a world increasingly divided by protectionism and populism, it was no accident the United Nations chose the following theme for its annual general assembly in 2018: global leadership and shared responsibilities for peaceful, equitable and sustainable societies. The theme reflected the increasing importance of the UN’s Sustainable Development Goals (SDGs), which are the blueprint to achieving a better and more sustainable future for all by 2030. They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice. To achieve these goals, the world will need to create an economy that works for everyone – and for the environment too – because as Ban Ki-moon, United Nations Secretary-General when the SDGs were adopted in 2015, observed: “We don’t have plan B because there is no planet B!”

This is where a philosophy called the circular economy comes in. It advocates business models that are economically and environmentally sustainable and focuses on designing products and systems to extend product life and increase recycling. Steel is endlessly recyclable and as such, recycling it yields important energy savings. Steel will be the backbone of the future circular economy. For this reason, we at ArcelorMittal believe steel is one of the most, if not the most, sustainable materials used on the planet. To be clear, when I talk about sustainability, I mean more than the environmental impact of steel, but its economic and social contributions too.

In terms of economics, steel is inexpensive because iron ore is abundantly available. It is also a pivotal material for the infrastructure on which developed economies are built. For instance, without steel, none of us would have reached our offices today. Steel aids social development too because it’s easy to use to make all sorts of products, from paperclips to smartphones, which improve our standard of living. In fact, finding a product with which uses no steel at all is quite a challenge!

Steel is also infinitely and easily recyclable using electricity, which makes it a very environmentally friendly product too. It is also a greenhouse gas friendly material on a lifecycle basis – despite the attention our CO₂ emissions get. In fact, according to WorldAutoSteel primary steel manufacture emits 7 to 20 times less emissions per kilogram of material than equivalent automotive parts made of aluminium, magnesium and carbon fibre. This is not, of course, to trivialise the scale of our industry or its carbon challenge. I am the first to admit reducing steelmaking’s CO₂ emissions is a very big, very important task. In 2017, 1.7 billion tonnes of steel were produced globally. This contributed 7% to global CO₂ emissions that year.

So, steel certainly has a role to play if the world is to limit global warming to the 2 degrees Celsius above pre-industrial levels, as set out in the Paris Agreement. As the world’s largest steel manufacturer, ArcelorMittal wants to ensure it takes the correct steps to safeguard the future and is committed to leading the way in ensuring the steel industry finds solutions to address its carbon challenge. Given my earlier point about steel’s recyclability, the obvious answer to reducing steelmaking’s CO₂ emissions – from roughly two tonnes of CO₂ per tonne of primary steel, to around half a tonne per tonne of steel made from recycled scrap – would be to cease primary steel production in favour of recycling it from now on. This ingeniously simple concept holds huge promise, but it also assumes enough steel exists to meet the needs of the growing global population.

If we’re serious about social development, our ultimate objective must be to ensure that everyone alive can enjoy the kind of lifestyle we have in the West. The question then is, in developed economies, how much steel is in our houses, our transportation methods, our factories? The answer is, rather a lot. In fact, when we consider an entire country’s infrastructure, in the developed world it averages out at about 10 tonnes of steel per capita. Meanwhile, the world average is about four and a half tonnes per person. Why so low? Because much of the world’s population lives in the developing world, where the kind of infrastructure we might take for granted is rare. Developing nations have, on average, about two tonnes of steel in use per person. So, to hit the target of 10 tonnes of steel per capita needed to support high-quality lifestyles for all, we calculate it will take until well into the next century before we have enough steel in use at any one time, a global inventory of sorts, which is large enough to harvest to meet demand for new steel products in perpetuity. Until we do, we will not be able to make a definitive switch from primary steelmaking to recycling.

We should also remember two other important factors that impact on the total steel inventory needed. The first of these is that the world’s population continues to grow. The second is the fact that steel is only ready to be recycled once a product has reached the end of its intended use.

In Europe, the average lifetime of steel-containing products is 40 years, at which point 90% of that steel comes back for recycling. There is always more to be done, but steel’s recycling rates are by far the highest of all materials. Incidentally, scrap already accounts for 40% of total steel production in the region. Europe also exports scrap to developing countries. Some argue that Europe should keep all its scrap and replace some blast furnaces with electric arc furnaces to reduce CO₂ emissions in the region. Although this looks attractive from a local point of view, from a global perspective, it is illogical. Any scrap not exported to developing countries will need to be compensated by more primary steel production in those regions. Environmental regulations there may well be less stringent than those in Europe, potentially increasing global CO₂ emissions rather than curbing them. Steel demand growth forecasts expect global steel production to increase from 1.4 billion tonnes a year in 2010 to 2.5 – 2.7 billion tonnes in 2070. Those forecasts also expect it will take until the last quarter of the century before steel made from scrap tips the balance in its favour, by volume.

Given all this, although steel is a perfect material for the circular economy, we are a long way from having enough of it in the bank to live off. This means we will need to invest in building up a large enough deposit of primary steel to enable a recycling/reuse strategy longer term. In the meantime, our focus needs to be on reducing the carbon footprint of primary steelmaking.

Before I describe how we’re going about this, I should explain the steelmaking process.

Our objective in steelmaking is to turn iron ore (FeO: iron + oxygen) into iron (Fe). That is, to remove the oxygen (O). We do this by adding carbon, traditionally in the form of coal. This combination at high temperature causes a chemical reaction that is a bit like cutting in on a couple at a dance. The carbon gets between the oxygen molecules and the iron ore, pairing itself up with oxygen molecules to form CO and CO₂, leaving the iron on its own. In the same moment, the chemical reaction also produces several by-products. These are: heat (used to melt the added steel scrap), gases which we predominantly capture and transfer to power plants for energy generation, and slag, consisting mostly of limestone (CaO) and silica (SiO2), which makes an ideal CO₂-free cement substitute.

By adopting a circular economy approach and reusing these by-products ourselves or selling them, we are helping to decarbonise other sectors. For example, for every 100 million tonnes of steel we produce, we also produce enough slag to make 30 million tonnes of cement, eradicating the CO₂ that would otherwise have been emitted had the cement been produced using conventional production methods. In effect, this means that 15% of CO₂ emissions accounted for in primary steelmaking are actually helping to avoid emissions in the cement industry, by producing CO₂-free cement. It is very important to note – we are not burning any carbon, only using it for a chemical reaction and even then, our processes are so finely balanced that we are within 5% of the theoretical minimum for that reaction to take place. Instead, the greenhouse gas emissions are created when the oxygen molecules leave the iron ore for the carbon. 

Theoretically, there are other ways to make this reaction happen without using carbon, such as using electricity or hydrogen and we are exploring how we might make such steelmaking methods viable on a commercial scale. The challenge we face with these routes is that they are less energy efficient and would require vast amounts of renewable electricity. These alternative processes are also more difficult to scale up, which further compromises their economics. Unless the world can find a way to produce renewable energy in a great enough abundance to make carbon-free steelmaking a viable business model, our ambition to make carbon-free steel could remain out of reach. In the meantime, we are working hard to reduce steelmaking’s carbon footprint by using carbon in a smarter way."

In part two of this series, Carl de Maré will explain the smart carbon strategy ArcelorMittal is developing to reduce our carbon footprint, while also creating value for our economy, our society, and our planet.