ArcelorMittal expanding steel sales in 2022 with carbon certificates

Steelmakers in Europe are driving sales of steel offered with carbon reduction certificates and voluntary carbon offsets in combination with decarbonization investments ahead of bigger emissions reductions on the horizon from hydrogen, electrolysis, scrap and metallics.

Steel group ArcelorMittal in 2021 sold 100,000 mt of steel with carbon reduction certificates, driven by the group’s own decarbonization investments, and it said it expects steel sales with the offsets to reach 600,000 mt/year by the end of 2022.

The Luxembourg-based steelmaker has launched several low emissions products under its XCarb brand, including certified emissions credits bundled steel and a range of renewable steel products. ArcelorMittal is looking to invest in renewable power capacity, offering large baseload electricity purchasing commitments as part of a larger drive to expand further into direct reduction iron at multiple sites in Europe and Canada, with the potential to use green hydrogen and electrolysis, CEO Aditya Mittal told analysts late last week.

“Demand across all segments shows customer appetite for green solutions,” the company said in an investor presentation.

The XCarb green steel certificates are independently verified and offered with ArcelorMittal’s blast furnace-based steel, directly related to CO2 savings from group investments in decarbonization technologies implemented across a number of European sites. The certificates are based on an average 2.1 mt of carbon emissions representing Scope 1 and 2 emissions for flat steel products, according to the company.

The company’s environmental product declaration for hot-rolled coil in Europe states 2.23 mt of carbon emissions to produce 1 mt of finished steel, from manufacturing, transport and raw material supply, as published by Institut Bauen und Umwelt.

Swedish steelmaker Ovako has moved its electric arc furnace-based operations to be carbon neutral, and starting this year is using carbon offsets to counterbalance the full Scope 1 and 2 carbon emissions from steel production, according to the Greenhouse Gas Protocol and ISO 14064:2018 and audited yearly, the company said on its website.

Ovako has chosen to procure credits from projects verified by either The Gold Standard or VCS, while planning to gradually reduce the use of offsets with further investments in new technology and decarbonization. In 2020, Ovako’s operations had a carbon footprint of 180,254 mt on a Scope 1 and 2 basis, according to a KPMG report.

Arcelormittal’s products allow buyers to record zero emissions under the Greenhouse Gas Protocol, Mittal said.

“Clearly, we need to grow that product range, and we’re doing that through the investments that we have,” Mittal told analysts on a Feb. 10 call.

“I think when I look at the totality of our European operations and the totality of what we’re trying to achieve, I feel very comfortable that we’re on the right track, and we’re doing the right things.”

The steelmaker is adapting existing steel processes to increase use of scrap metal and enable gas injection to save on other fuels, such as carbon-based products.

It targets completion of two smart carbon initiatives at its Gent, Belgium, site by the end of the year, under the Carbalyst and Torero projects, which capture CO2 from the blast furnace and produces bioethanol. The company has plans for a 100,000 mt/year DRI pilot plant in Hamburg using hydrogen exclusively.

ArcelorMittal has also made climate-related investments under the XCarb Innovation Fund in five technology partnerships

— Hector Forster