Steel Decarbonisation Roadmap: Route to Net Zero

In our latest #industryinsight, Sara Halliday, Sustainability Manager, discusses decarbonisation in the steel sector, Severfield’s ambition for net-zero and our decarbonisation journey so far.

Steel: the backbone of the modern economy

Steel is widely known for being an essential building material in construction, but it also plays a vital role in many aspects of modern society - enabling a broad range of manufacturing activities and innovative solutions in other sectors, from automotive to military and domestic appliances.

Driven by population growth and rising economic needs, the International Energy Association (IEA) specifies that steel will be an integral ingredient for the renewable energy transition, with global demand projected to rise by over a third until 2050:[2].

“Carbon plays a fundamental role in the end-to-end production of steel: as a fuel, as a reducing agent, and as an alloying agent."

However, transforming iron ore into steel is an energy-intensive process. It involves using coal to provide an estimated 75%[3] of the energy and heat required to make the chemical reactions which, produce steel.

Given the breadth of applications combined with rapid growth in demand, steel production is now one of the top three global contributors to CO2 emissions[3]. Decarbonisation in the steel sector is therefore a crucial step towards halting climate change, as outlined in the COP26 outputs[4]

BCSA Roadmap Explained: 6 levers

In achieving the Paris Agreement’s goal of net-zero by 2050, there are a number of emerging technologies and decarbonisation strategies that signal progress, six of which are prioritised in the BCSA roadmap[1]; these are summarised below:

1. Design efficiency

2. Circular economy

3. Direct steelmaking emission reductions

4. Decarbonisation of the electricity grid

5. Carbon capture, use and storage (CCUS)

6. Steel transport, fabrication and erection

Each one of the six ‘levers’ is intended to cover the whole UK structural steelwork sector, providing multiple pathways to decarbonise - many of which are already in motion.

Levers 1 and 2 cover ‘demand-side measures’, offering the easiest near-term decarbonisation benefits through smarter, more efficient designs using less steel (Lever 1), and extending the whole life of steel through reuse and recycling (Lever 2). As designers, fabricators and erectors, lever 1 and 2 are key for Severfield.

Lever 3 is expected to deliver carbon reductions over the next ten years, using emission- reduction technologies such as waste heat recovery, increased scrap steel use, and biomass/biowaste to produce the energy required for steelmaking.

A stable supply of affordable renewable energy is fundamental to Lever 4’s contribution to decarbonised steelmaking. The UK’s electricity grid is expected to be decarbonised to target levels by 2050, and this will better facilitate the use of scrap in steel production as electricity becomes the primary energy source.

Lever 5 will see most carbon reductions achieved after 2035, and a predicted overall carbon reduction of 25% by 2050. This is due to the suite of new technologies required to capture, store, and recycle CO2 at source, such as power plants and industrial facilities using fossil fuels.

As a steel fabricator and erector, our focus is also on the sixth lever. By 2050, it is expected that Lever 6 will contribute an 8% carbon reduction.

Severfield’s commitment to decarbonisation

We have been measuring and managing our carbon footprint for many years as part of our ambitious sustainibility strategy [7]. Below are a few of the steps we’ve taken so far on our journey to net-zero:

1 - Carbon Neutral Accreditation

In August 2021, we were accredited as carbon neutral by the Carbon Trust, in accordance with PAS 2060, the international standard for carbon neutrality. We will continue to maintain this going forward.

Furthermore, we have increased sustainability awareness across the organisation; we are encouraging colleagues to become more engaged by launching our “Smarter, Safer, more Sustainable” business strategy.

2 - Scope 1, 2 and 3 carbon emissions

These are the greenhouse gas emissions that are produced as a direct result of our operations, such as powering the production facilities, offices, and transporting goods. We’ve taken significant action to minimise carbon emissions by 60% since 2015, through various initiatives including shifting to more energy-efficient technologies, lean manufacturing techniques, and switching to renewable electricity.

Scope 3 is where the most impact can be achieved. It covers all of the associated emissions that a company is indirectly responsible for throughout their supply chain, such as the procurement/processing of raw materials, business travel, transport and distribution, employee commuting, and waste. According to the GHG Protocol, Scope 3 emissions equate to approximately 70% of an organisation's carbon footprint[6]. For Severfield, this can be as high as 98% due to the embodied carbon in the steel we purchase.

Embodied carbon is the total amount of CO2 emitted from producing materials; from the energy used to extract and transport raw materials to the emissions from their manufacturing processes.

Although scope 3 reporting is not mandatory, if an organisation’s scope 3 is more than 40% of emissions, then there exists an economical and ethical responsibility to report it and set targets to reduce it:

“If companies don’t consider the whole life of their carbon footprint, and actively manage Scope 1, 2 and 3 together, they are missing out on significant opportunities to not only improve their carbon emissions and meet targets – but to make a real, tangible difference to climate change.”

When considering the “whole life” of an organisation’s carbon footprint, embodied carbon should not be overlooked, because the emissions produced between now and 2050 will determine whether the goals of the Paris Agreement are met, to prevent the worst effects of climate change.

3 - SteelZero initiative

With 98% of our total carbon emissions being in scope 3, attributed to our steel supply chain, it is integral that we continue to support steel producers to meet the UK’s net-zero carbon target by 2050.

A key part of this support was Severfield joining SteelZero[5] in 2021. This set a precedent and a call-to-action to drive major change in the sourcing and production of steel globally, whilst simultaneously facilitating a forum for buyers and suppliers to come together, collaborate, and commit to net-zero steel.

A first of its kind, SteelZero sends a powerful message about responsible steel sourcing and production globally, particularly by targeting net-zero steel from the demand side of the supply chain. It could have a significant impact on investment, policy, manufacturing, and production in the construction sector.

“Our role in SteelZero means we are targeting our entire supply chain, to transition to procuring, specifying, or stocking 100 per cent net zero steel by 2050, with certain interim targets to be achieved by 2030.”

Final thoughts

The roadmap to decarbonisation is a journey with various milestones, all of which make significant impacts on the possibility of creating and maintaining a truly sustainable steel industry. In line with our sustainability strategy, we will continue to manage and monitor our emissions, with the aim of reaching Net Zero by 2040 for Scope 1 and 2, and Net Zero by 2050 for Scope 3.

Works Cited:

1. https://steelconstruction.org/wp-content/uploads/2022/01/BCSA-2050-Decarbonisation-Roadmap.pdf
2. https://www.iea.org/reports/iron-and-steel-technology-roadmap
3. https://www.iea.org/reports/iron-and-steel-technology-roadmap
4. https://www.climatecatalyst.org/our-analysis/steel-at-cop26
5. https://www.theclimategroup.org/steelzero-members
6. https://ghgprotocol.org/sites/default/files/standards/Scope3_Calculation_Guidance_0.pdf
7. https://www.severfield.com/news/severfield-share-cop26-ambitions