Steel production CO2 emissions currently account for 9% of total global emissions.
As has been seen with other high emitting sectors, e.g. oil and gas, activist investors are now pushing companies to adopt strategies to reduce emissions. One such group is the Institutional Investors Group on Climate Change (IIGCC) which has US$55trn of AUM. As part of the Climate Action 100+ initiative it is calling for steelmakers to take urgent action on CO2 emissions in order to meet Paris Agreement thresholds.
Steel GHG emissions need to fall 29% by 2030 and 91% by 2050 to meet net zero targets.
The IIGCC believes the target to be feasible and argues that the steel industry is being too slow to act. The group has called on steelmakers to set short, mid and long-term strategies, aligned with investment plans, to reach net zero. They are also being called up to explore and report on emerging CCS (carbon capture and storage) technologies and hydrogen-based processes. Nine steel companies, accounting for c.20% of global steel production have so far set firm net zero goals. AcelorMittal, the global steelmaking leader, and Salzgitter have announced hydrogen-based projects. Japan’s third largest steel producer, Kobe, has said it plans to cut emissions by 30-40% by 2030 (vs 2013 levels).
