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
| Green Steel Standards (scrap share) | Green Steel Thresholds 2025 (t CO2e/t) |
| LESS (100%) “Near zero” | 0.12 |
| LESS (100%) A | 0.24 |
| LESS (100% ) B | 0.36 |
| LESS (20%) “Near-zero” | 0.40 |
| LESS (0%) “Near-zero” | 0.47 |
| LESS (100%) C | 0.48 |
Benjamin Steven Journalist, Steel
Green lead markets require standardisation
Green lead markets should have the same standardisation in every European country, according to Luciana Filizzola, GMH Gruppe’s director sustainability and communications.
“If every country in Europe has the same standardisation, it would be wonderful to promote the green lead market,” she said at the Kallanish Europe Steel Markets 2024 conference in Milan last week. GMH recommends prioritising low-CO2 products in tenders, both directly and indirectly, and a uniform classification system for green steel products, such as Germany’s Low Emission Steel Standard (LESS) labelling system.
Vulcan Green Steel vice president Arnaud Guerendel added: “There is no international standard and that is a pity!”
Guerendel noted international standardisation is currently facing a problem. He gave the example of one organisation, which is lobbying for and working under the definition of below 0.4 tonnes of CO2 emissions per tonne of steel production for Scope 3 emissions. But there is another range that has the general consensus of being considered “green” steel, which is at under 0.6t of CO2 emissions per tonne.
He opined one cannot make all grades of steel under the same carbon intensity. For example, producers can make a basic grade if they use scrap and green electricity, as it will have a very low product carbon footprint (PCF). However, very sophisticated grades cannot be made from scrap, and it will a completely different footprint.
Hydrogen-based direct reduced iron will therefore need to be used to achieve net-zero production of these highly sophisticated grades.
“There’s no international standard, between the EU, USA, and rest of the world,” Guerendel said. This is especially the case since China manufactures over 55% of global steel and India is soon expected to cross 200 million tonnes/year. He emphasised the need to set dialogue with those regions and standardise.
Suhita Poddar India
Germany introduces new green steel certification standard
The LESS certification was introduced on Monday April 22 at an industry event in the Hannover Messe and announced more widely in a WV Stahl press release.
It was said to be the first standard for the steel industry that allows for tracking and comparing emissions from two key steelmaking routes: the conventional blast furnace route in the transition to low-emitting hydrogen-based production processes, and the electric-arc furnace route. The system therefore enables comparisons of the decarbonization efforts of both steelmaking methods.
LESS was developed by WV Stahl and its member companies and is supported by the BMWK.
The core part of the LESS standard is the labelling system, which allows for classification of low-CO2 steel by carbon intensity, using a graduated scale.
According to the LESS standard, low-emission steel can be grouped into five categories – A,B,C,D,E – depending on carbon and scrap content.
Steelmaking companies that would like to get LESS certificates would have to report their scrap content and Product Carbon Footprint (PCF) in the finished steel product, in accordance with an Environmental Product Declaration (EPD).
This EPD would be provided by independent certification bodies TÜV Nord and DNV.
“The definition of green steel has long been the subject of intense debate worldwide,” WV Stahl president Bernhard Osburg said. “I am delighted that, by joining forces, we have succeeded in developing a widely agreed solution based on international standards which we are now putting into practise. This will provide steel clients with all the information they need to achieve their CO2 reduction targets with the help of low-emissions steel.”
He also emphasized that the LESS standard will help steel-using companies to obtain initial funding for transformation projects.
The introduction of LESS was supported by stainless steel producer Swiss Steel Group.
“LESS creates transparency through a uniform labelling system and a step-by-step classification of low-CO2 steel, and enables steel users to achieve their climate targets with the help of sustainably produced steel,” Swiss Steel Group said on April 24.
The LESS standard was created for international cooperation, so industry sources hoped that it would help to achieve a more unified approach to pricing low-carbon steel and that this would help to promote its uptake across supply chains.
Industry sources estimated that the volume of green steel traded in Europe in 2023 was no higher than 50,000 tonnes, with very few suppliers able to offer “physically produced green steel, with emissions proven by Environmental Product Declarations [EDPs],” according to one distributor.
Fastmarkets’ most recent weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €150-250 ($160-267) per tonne on April 18, unchanged since mid-December.
