Factsheet – Trade low-carbon steel, not credits
Read on to learn about why and how trade measures supporting climate action must ensure credible and accurate Environmental Attribute Certificates to achieve real steel decarbonisation.
Trade must support systemic decarbonisation
23% of global emissions come from embodied carbon of traded commodities, meaning how a product was made before being traded. Trade agreements and measures, such as carbon border levies, are increasingly seen as tools to facilitate trade of low-carbon products – which are essential for countries and companies to decarbonise. However, market instruments used to calculate embodied impacts of products, such as Environmental Attribute Certificates (EACs), could undermine trade of low-carbon products. This factsheet puts steel into the spotlight.
Ensuring trade of truly low-carbon steel
Steel is among the most traded commodities and is also responsible for 7% of greenhouse gas emissions globally. Decarbonising its production must be a global priority. This can be done by increasing and improving the use of scrap steel as feedstock and electrifying production through renewable electricity—either directly or using renewable hydrogen as a reducing agent. Unfortunately, conventional and cleaner methods are sometimes mixed together in production, making it impossible to distinguish between low-carbon and conventional steel. This is a Chain of Custody model known as mass balance.
Different mass balance methods, different results
There are two mass balance methods: credit and rolling average. Both will lead to different results when calculating the climate impacts of products. While the former is currently not recognised, and in some cases explicitly not permitted, it continues to be strongly promoted by certain actors. Our factsheet puts these methods into context.
Read on to learn more.
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