Climate Opportunities for the Metallurgical Industry

The Climate Challenge: Risks and Opportunities for the Metallurgical Industry

With the growth of the global population and increased steel consumption, demand for metal products is expected to grow by at least one and a half times by the middle of the century. Steel is the foundation of the circular economy, as it can be recycled an unlimited number of times. However, steel production is traditionally associated with high greenhouse gas emissions. In this webinar, the speaker discusses how the climate challenge is transforming from a threat into a driver of industry development, opening up new opportunities for metallurgical companies.

The presentation details the physical and financial risks facing the industry. Physical risks include permafrost melting, accelerated wear and tear of buildings and structures, and increased electricity consumption due to abnormal heat. Financial risks are associated with the uncertainty of greenhouse gas emissions regulation in Russia, the introduction of the Carbon Border Adjustment Mechanism (CBAM) in the European Union, and stricter requirements from banks and insurers regarding companies' ESG strategies.

Greenhouse Gas Management Strategy: From Measurement to Reduction

Accurate emissions accounting is the foundation of effective climate risk management. Using their company as an example, the speaker demonstrates how a carbon footprint measurement system is built across three scopes (Scope 1, 2, and 3). Special attention is paid to assessing indirect non-energy emissions (Scope 3), which requires painstaking work throughout the entire value chain.

External verification of reporting is conducted to ensure data reliability. This is critically important for investors and other stakeholders. The company has set emission reduction targets across three horizons: short-term (a 3% reduction in intensity by 2023), medium-term (a 10% reduction by 2030 and entering the top 15% of enterprises with the lowest intensity), and long-term (achieving carbon neutrality by 2050).

Technological Pathways for Decarbonization: Innovations and Collaborations

Metallurgy is a carbon-intensive industry where carbon acts as an iron reducing agent in the technological process. The average emission intensity in the industry is about 2 tons of CO2 per ton of product. A shift in the technological paradigm is necessary to significantly reduce this figure.

The speaker highlights two main development paths: maintaining the current configuration (blast furnace-converter) with the implementation of carbon capture, utilization, and storage (CCUS) technologies, or transitioning to electrometallurgy using scrap metal and hydrogen (hydrogen-based DRI). Accelerating decarbonization requires active cooperation with the government, research centers, and society, as well as participation in industry and international initiatives (e.g., Worldsteel, Climate Action Steel Zero).

What you will learn from this webinar:

• Which physical and financial climate risks are most relevant to the metallurgical industry?
• How to organize the accounting and verification of greenhouse gas emissions across all three scopes (Scope 1, 2, 3)?
• What technological solutions (CCUS, DRI, hydrogen use) are considered promising for the decarbonization of metallurgy?
• How will the Carbon Border Adjustment Mechanism (CBAM) affect metal product exports?
• Why is product life cycle assessment becoming an important requirement from clients?