BIR warns against sliding scale steel green standards

The Bureau of International Recycling (BIR) has released a new position paper calling for “a fair and science-based approach” to green steel policymaking; namely, how green steel is to be methodologically defined as the steel industry embarks on its industrial transition.

In the paper, the industry association warns against defining green steel against a “sliding scale” approach, which gives diminished accreditation for carbon emissions reductions the greater the constituent share of secondary (scrap) steel in the steel’s production.

This methodology, preferred by leading decarbonisation standards bodies in the steel sector such as ResponsibleSteel and the Low Emissions Steel Standard (LESS), is premised on a “realistic and practical” approach to decarbonisation, attempting to recognise inherent limitations in scrap availability to meet steel and green steel demand out as far as 2050 – an institutional carbon-neutrality deadline worldwide.

BIR supports methodologies on an absolute emissions approach such as the Global Steel Climate Council’s Steel Climate Standard (GSCC SCC), which BIR states “applies to all steel producers equally, focusing on actual emissions intensity across time rather than production method.” While this is not wholly inaccurate, the SCC does distinguish between flat and long steel products, setting different emissions targets for each at comparatively high thresholds as demonstrated in appendix one.

Supporters of definitions incorporating a sliding scale argue that these limitations in scrap availability risk merely redistributing embedded emissions across steelmaker product lines, and negates potential for higher-carbon blast furnace (BF) route producers to enact real emissions reductions on economic non-viabilities.

The European Commission is currently formulating low-emissions steel labels under the upcoming Industrial Decarbonisation Accelerator Act, as per the European Steel and Metals Action Plan (ESMAP), to be presented at the end of the year. McCloskey’s industry sources indicate that LESS is a forerunner in these consultations between policymakers and European steel market participants.

Under ESMAP, EU authorities recognise that the steel industrial transition is not workable without demand for green steel products such to fund decarbonisation-focused renovations among steel producers; aiming to create lead markets for green steel through official green steel definitions and their incorporation into public procurements. With public procurement representing around 15% of steel demand on the continent, steel producers – regardless of production route – will be looking to secure their piece of this pie as European climate targets approach their deadlines.

BIR does acknowledge scrap’s finite supply, but equates it to other raw materials, stating “much like iron ore, [scrap] is not scarce,” denying that this warrants special treatment for BF producers over electric-arc furnace (EAF) producers – who largely dominate scrap consumption as their primary steelmaking input.

The association adopts the same studies as the standards they criticise for their arguments, citing the possibility to reach 45% recycled steel input in global manufacturing by 2050 to counter what they term the “shortage narrative” – but BIR does not give much attention to the decarbonisation of the other 55%, or the fact that 2050 represents the carbon-neutrality deadline, not the starting line for a scrap-based transition.

BIR’s arguments are understandable in the sense that EAF producers should not be isolated from any green steel markets created and stimulated by emerging regulatory definitions – but the European Commission’s strategy focuses on incentivizing the decarbonisation of its existing industries, to which BIR has not provided an alternative solution.

Indeed, the scrap-independent decarbonisation routes available to integrated blast furnace producers – most prevalently, looking to direct-reduced iron (DRI) processes as an alternative to carbon-intensive blast furnace iron reduction – are also available to EAF producers, allowing them to reduce the scrap share in their productions on an already-competitive production route, as well as support the development of the DRI markets and the wider industrial transition via additional demand.

BIR states that the sliding scale model “contradicts the fundamental principle that green standards should reward actual emissions reductions” – yet if Europe’s existing integrated production is going to achieve actual emissions reductions, its operators will certainly require supportive demand to do so before 2050, as afforded by the incorporation of a sliding scale approach into regulatory definitions.

Appendix One: Green Steel, Standards and Thresholds

Benjamin Steven Journalist, Steel

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