(2)Lack of Consensus on Low-carbon Emission Steel and Aluminum Makes it Difficult to Confirm the Green Product Attributes
Currently, there is no consensus among parties on the definitions of 'low-carbon emission steel/green steel' and 'low-carbon emission aluminum/green aluminum'. This results in a vague definition of green product attributes, a lack of uniform standards for the emission limits of low-carbon or zero-carbon products, and an insufficient transparency in certification processes. These increase the difficulty for automotive companies in selecting low-carbon materials and bring higher uncertainty to the planning of supply chain emission reduction pathways.
IPE’s analysis of mainstream green labels, certifications, and initiatives in the steel and aluminum industries (Table1 and Table 2) shows that in the steel industry, the Responsible Steel™, recognized by many automotive companies, defines 'Near Zero Steel' as having a carbon footprint of 0.05-0.4 tons CO2e per ton of steel (from cradle to gate), but does not make requirements on metallurgical processes, scrap usage, or the proportion of renewable energy. The SteelZero Initiative proposes that 50% of steel used by 2030 should be low-emission, but does not define what constitutes low-emission steel. The Climate Bonds Initiative issued its criteria for Steel Industry, focusing primarily on the carbon emission intensity per ton of steel for facilities or companies using different processes, rather than the lifecycle carbon footprint. Meanwhile, some steel companies like Baosteel Co., Ltd., ArcelorMittal, have released their own definitions of low-carbon emission steel products.
Table 1 Definitions, Initiatives, and Labels of Mainstream 'Zero Carbon' and 'Low Carbon Emissions' Steel
| Initiatives, standards, and definitions related to low-carbon emission steel in the steel industry |
|---|
| Initiative/Standard Name |
Main Content or Requirements |
Initiator |
| Responsible Steel |
Basic/Level 1: 0.35-2.8 (tCO2 per ton of steel) (100% - 0% scrap)
Level 2: 0.25-2.0 (100%-0% scrap)
Level 3: 0.15-1.2 (100%-0% scrap)
Level 4 (Near Zero): 0.05-0.4 (100%-0% scrap)
|
The ResponsibleSteel™ International Standard |
| First Movers Coalition-Steel commitment |
Crude steel from breakthrough technology production facilities. Per IEA guidance, the steel should emit <0.4 (0% scrap inputs) to <0.05 t (100% scrap inputs) of CO2e per tonne of crude steel produced
At least 10% (by volume) of all our steel purchased per year will be near-zero emissions (as per FMC definition) by 2030” |
Weforum & First Movers Coalition |
| SteelZero Initiative |
Organisations that join SteelZero make a public commitment to buy and use 50% low emission steel by 2030, setting a clear pathway to using 100% net zero steel by 2050. |
The Climate Group |
| NET-ZERO STEEL INITIATIVE |
The Net-Zero Steel Initiative (NZSI) aims to put the global steel sector on a path to reach net-zero emissions by 2050 by:
Partnering with an international group of steel industry leaders
Bringing zero-carbon primary steel production technologies to market by 2030
Accelerating the growth of scrap-based production
Focusing on supply dimensions
Demonstrating how steel can be a key part of a net-zero economy
|
Mission Possible Partner |
| Climate Bonds Initiative’s Criteria for Climate Bonds for the Steel Industry |
Facility standards:
Taking 2022 as the boundary, the emission reduction paths and evaluation standards for facilities commissioned before and after 2022 are different.
For example, if an electric arc furnace (EAF) primarily using scrap steel for steelmaking is commissioned after 2022, the scrap steel used by the facility must account for 70% of the total annual raw material. Alternatively, the combined usage of scrap steel and (100%) hydrogen direct reduced iron should account for at least 70% of the total annual raw material smelted by the electric arc furnace.
For DRI production lines commissioned before 2022, if the plant primarily uses coal: a series of decarbonization measures have been or will be implemented on the facility, and the emission intensity of the facility (ton CO2/ton steel) has been or will be reduced by 40% during the period from 2022 to 2030.
Corporate Standard:
Corporate emission reductions must at least meet the IEA emission reduction pathway thresholds: Primary Steel (Primary Steel) in 2020 is 2.38, and by 2050 it is 0.12 tons of steel carbon dioxide equivalent; Secondary Steel (Secondary Steel) from 0.75 in 2020 to 0.12 tons of steel carbon dioxide equivalent by 2050
|
Climate Bonds Initiative |
| Industrial Deep Decarbonization Initiative (IDDI) |
IDDI is advocating for governments to set procurement targets for the purchasing of decarbonized steel and cement and creating the tools to do so |
UNIDO |
| STEEL STANDARDS PRINCIPLES |
Common emissions measurement methodologies to accelerate the transition to near zero; consistent with the IEA “Net Zero Principles” |
World Trade Organization |
| Science-Based Targets for the Steel Industry |
Absolute emission reduction targets, reducing 4.2% of the baseline annually |
Science-Based Targets Initiative |
| Net Zero Carbon Steel/Carbon Neutral Steel |
The greenhouse gases emitted into the atmosphere during steel production can be balanced with the emissions collected from the atmosphere using carbon sink facilities |
World Steel Association |
| Corporate Low Carbon Product Labeling and Definition |
|---|
| Label Name |
Main Content |
Initiating Company |
BeyondECO™
Low-carbon emission steel |
BeyondECOTM is a low-carbon product brand officially launched by Baosteel in 2022, including low-carbon and zero-carbon steel products. For example, 'BeyondECO-30%' refers to steel that has a 30% reduced carbon footprint compared to Baosteel's equivalent product in 2020.
Baosteel Co., Ltd. explores low-carbon process paths for automotive steel and has completed trial production of low-carbon cold-rolled and hot-dip galvanized automotive products; The product carbon footprint has been verified by a third party, and the product reduces carbon by more than 60% compared to conventional processes.
|
Baosteel Co., Ltd. |
| XCarb™ |
XCarb™ green steel certificates are specifically designed for ArcelorMittal’s flat steel products made from iron ore in a blast furnace.
These initiatives range from our flagship Smart Carbon projects, such as Torero and Carbalyst, to capturing hydrogen-rich waste gases from the steelmaking process and injecting them into the blast furnace to reduce our use of coal.EPDs are available for six products which are manufactured via the Blast Furnace route and are eligible for XCarb® green steel certificates.
Three EPDs for Flat Products are available with XCarb® recycled and renewably produced |
ArcelorMittal |
| ECONIQ STEEL |
Econiq™ NZ is the world’s first net-zero carbon steel at scale, certified for Scopes 1 and 2, with the option of Scope 3.
Econiq™ RE certifies that your steel or steel products were made with 100% emission-free and/or renewable electricity.
Econiq steel will extend that leadership even further, utilizing 100% renewable electricity and high-quality carbon offsets to negate any remaining Scope 1 and 2 emissions. |
Nucor |
| GREENSTEEL |
GREENSTEEL aims to recycle and upcycle the growing amount of scrap steel, using electric arc furnaces powered by renewable energy. |
LIBERTY Steel UK |
| Fossil-free steel |
Fossil-free steel will be made by a completely new technology using fossil-free electricity and hydrogen |
Volvo Cars |
| Green steel |
Green steel: Low-CO2 blast furnace steel with sianificantly reduced C02 emissions in the blast furnace process |
Nissan |
In the aluminum industry, there is a significant difference in the emission reduction targets among different initiatives. The Aluminum Stewardship Initiative (ASI) imposes limits on the average emissions per ton of aluminum from mine to metal ingot, such as requiring entities that started production in or before 2020 to have average emissions per ton of aluminum below 11tCO2e, or to demonstrate at least a 10% reduction in the past three years, and to set targets of below 13tCO2e by the end of 2025 and below 11tCO2e by the end of 2030. The Pioneer Alliance - Aluminum Initiative calls for companies to have cradle-to-gate carbon dioxide emissions per ton of aluminum less than 3 tons by 2030.
Table 2 Mainstream 'Zero Carbon', 'Low Carbon Emission ' Aluminum Definitions, Initiatives, and Labels
| Initiatives, Standards, and Definitions Related to Low-carbon Emission Aluminum in the Aluminum Industry |
|---|
| Initiative/Standard Name |
Main Content |
Initiator |
| Aluminum Stewardship Initiative (ASI) Certificate |
It is recommended to conduct greenhouse gas-related disclosures according to GRI; the disclosed data must be verified; Clearly state the need to disclose emissions data (including Scope 3) and energy usage;
There are emission reduction requirements for greenhouse gas emission intensity: for entities starting production after the year 2020, the average ton of aluminum emissions from mine to metal aluminum ingot should be less than 11tCO2e/t Al ; Entities that began production before 2020 (including 2020) have an average aluminum emission from mine to metal ingot of less than 11 tCO2e /t Al, or have demonstrated at least a 10% emission reduction over the past three years, and have set targets to be below 13 tCO2e /t Al by the end of 2025, and below 11 tCO2e /t Al by the end of 2030.
|
Aluminum Stewardship Initiative |
| Low Carbon Products |
Refers to products whose carbon emissions data meet the low carbon evaluation criteria compared to similar products or products with the same function.
Carbon emission indicators can be confirmed based on the advanced carbon emission intensity values of the industry or can be determined by referring to the advanced level of the industry. |
Specification for the Evaluation of Green Low-Carbon Products: Electrolytic Aluminum Products (Aluminum Ingot) |
| Green Electricity Aluminum |
Electrolytic aluminum products produced using green electricity, including primary aluminum liquid and aluminum ingots for remelting. |
China Nonferrous Metals Industry Association Group Standard: Guidelines for the Evaluation and Trading of Green Electricity Aluminum |
| First Movers Coalition-Aluminum |
At least 10% (by volume) of all our primary aluminium procured per year will be low-carbon (as per FMC definition) by 2030 Emitting <3 t of CO2 per tonne of aluminium produced, including all emissions from cradle to gate In addition to our primary aluminium commitment, we commit to ensuring that at least 50% of all aluminium we procure per year is sourced from secondary aluminium by 2030 |
World Economic Forum and First Movers Coalition |
| Science-Based Targets - Aluminum Industry |
Absolute emission reduction targets, reducing by 4.2% annually |
Science-Based Targets Initiative |
| Corporate low-carbon product labels and definitions |
|---|
| Label Name |
Main Content |
Initiating Company |
| Revolution-Al™ |
Revolution-Al™’s main improvement is that it is 15-20% stronger than the traditional - and less colourfully named - wheel alloy, A356.2. This translates to a 7% weight reduction and better fuel efficiency or battery range. The lighter, stronger wheels also mean better performance and handling and reduced tire wear——are easy to recycle. |
Rio Tinto |
| ELYSISTM |
The ELYSIS technology effectively puts an end to the use of carbon anode in the aluminium smelting process. It features the newly developed breakthrough proprietary materials that are stable and do not react during the process. Thus, it eliminates all direct greenhouse gas (GHG) emissions from the aluminium smelting process and is the first technology ever that emits oxygen as its by-product |
ELYSIS |
| Hydro REDUXA |
Hydro REDUXA is our brand of low-carbon aluminium. Using renewable energy from water (hydro power), wind and solar, we can produce cleaner aluminium, reducing the carbon footprint per kg of aluminium to 4.0 which is less than a quarter of the global average. |
Hydro |
| Hydro CIRCAL |
Hydro CIRCAL is our brand of premium, low-carbon and recycled aluminium containing at least 75% post-consumer scrap. Through the use of such a high share of post-consumer scrap, Hydro CIRCAL has a market-leading average carbon footprint of 2 kilo CO2-equivalents (CO2e) per kilo aluminium. The production process is fully traceable from scrap to the recycled metal per batch, and the product is verified by DNV, an independent third party. |
Hydro |
| Near-zero carbon aluminum |
The ambition is to deliver first commercial volumes of aluminium with 0.5-1 kg CO2/kg aluminium, through the value chain, already next year |
Hydro |
| Recycled aluminum |
We aim to use 40 per cent recycled aluminium in our new models, from 2025, and have a carbon footprint target of 4 kg CO2 per kg on ingot level for our consumption of primary aluminium. |
Volvo Cars |
| Green aluminum |
Green aluminum: Aluminum that is electrolytically smelted using only electricity generated by solar power |
Nissan |
Apart from the unclear definition of low-carbon emission steel and aluminum, most steel and aluminum companies have not disclosed product carbon footprint information. Even in disclosed product carbon footprints, there is no explanation of the use of green electricity in the steel and aluminum smelting process, nor the proportion of recycled materials. This not only hinders automotive companies from understanding the implicit carbon levels in raw materials and choosing steel and aluminum products with lower carbon emissions, but also prevents all parties from reaching consensus on the standards for 'low-carbon emission steel' and 'low-carbon emission aluminum,' thereby assisting automotive companies in planning the optimal path for supply chain emission reduction.