The Global Steel Climate Council (GSCC) released The Steel Climate Standard to measure and report steel carbon emissions on Aug 3, 2023. However, a coalition of civil society organizations is opposed to the new standard.
On Aug 22, the coalition published an open letter calling on policymakers, steelmakers, and buyers to disregard the GSCC standard, claiming it was created to influence the US-EU trade agreements and favours only a few steelmakers in prosperous nations rather than “creating mechanisms to decarbonize global steelmaking meaningfully.”
The release, supported by E3G, SteelWatch and other organizations, noted: “This standard fails to incorporate a multi-stakeholder process, is not globally relevant, and ignores the full environmental & social impacts of steelmaking.”
However, Phillip Bell, President Steel Manufacturers Association (SMA), said, “The GSCC standard is key at two levels. First, it is process agnostic and can apply globally, and second, it allows for other steelmaking technologies that will come down the road. The standard focuses on the absolute value of carbon emissions.”
Bell added, “The press release and comments are very concerning because many are false.” He noted that the GSCC standard fully aligns with the International Energy Agency (IEA) pathway and is in line with the International Agency Climate budget. Bell informed that the GSCC is built on sound science-based principles and is straightforward to understand while it ensures that anyone who uses the standard will meet the 1.5pc degree reduction objective. Moreover, the standard was established only after following public comment and extended comments period before proceeding.
“If we are worried about emissions, we must focus on the climate, a global issue, and the impact on it from steel mills. The level of emissions is fully measurable alongside the absolute value of emissions reductions,” continued Bell.
The critical organizations are concerned that the GSCC “fails to meaningfully incentivize countries like China and India to decarbonize their steel industries.” Bell refuted that while ESG is essential, it is difficult for an environmental standard to have enforcement mechanisms, and the focus should be on emission reduction, which directly correlates to the climate. Bell redirected to other mechanisms for human rights and worker concerns, which have local dynamics, and offered the GSCC as a good trade standard since it will motivate better practices and clear metrics overall.
“We are focused on getting carbon out of the air. Other ESG issues have more local rules,” Bell said. He elaborated that the idea of the GSCC only focusing on electric arc furnaces (EAF) or US producers is incorrect. “There are more European steel members in the GSCC than US members, and members have various operations in over 80 countries,” he stated.
Bell is concerned that the wrong perspective could lead to more investments in blast furnaces, including significant relining investments, which extend their use for 20-25 years of higher emitting production.
The EU and other regions are shifting to EAFs through government-provided subsidies and incentives. However, steelmaking using primary raw materials is anticipated to continue due to insufficient recycled materials for complete transfer to meet global steel needs. Electric arc furnaces consume 70-100pc recycled materials and low-emission metallics materials, while the blast furnace (BF) route uses up to 30pc. Still, the latter is actively working to improve the inclusion of recycled materials, metallics consumption, and energy sources.
“The GSCC is fully aligned and supports most aspects of the Science Based Target Initiative (SBTI) coming in September 2023, except the dual standard sliding scale,” said Bell. Many concepts and methodologies for the GSCC were taken from the SBTI and IEA standards.
Davis Index will further dive into the discussion on pursuing a global steel standard in parts three and four of a series, including interviews with several concerned civil organizations. Click here to read parts one and two of this series.