New Science-Based Targets for steel will speed up decarbonisation, but more is needed
By The steel sector is the most carbon-intensive in the world, responsible for 7% of energy-related greenhouse gas (GHG) emissions. To decarbonise, individual companies need to commit to climate targets – and these need to be ambitious enough. The Science-Based Targets initiative (SBTi) recently updated its guidelines and targets for the steel sector, which now has a much stronger foundation for lowering emissions – but improvements must not stop there.
Measuring the good against the bad
The Science-Based Targets initiative (SBTi) offers a voluntary framework for companies to set mid- and long-term climate targets. It develops sector-specific carbon emission trajectories with the goal of reaching climate neutrality by 2050. Updating these targets for the steel sector is a crucial step towards decarbonisation.
Most importantly, the new guidance now aligns with the Paris Agreement, which calls for global warming to be limited to no more than 1.5°C above pre-industrial levels. Previously, this was set at 2°C, which was not stringent enough. Greenhouse gas (GHG) emissions associated with the production of hydrogen are now also included in the scope – a positive step.
As well as this, the updated guidance finally makes a distinction between two steelmaking routes: one starting from iron ore (very carbon-intensive), the other starting from scrap (less carbon-intensive). Previous guidance only considered one decarbonisation pathway for the steel sector – failing to account for the vast differences between these two categories. Secondary steelmakers can no longer hide behind the lower-carbon intensity of their processes – they, too, need to invest in decarbonisation.
These are all big steps forward, and as a member of the Expert Advisory Group involved in drafting this new guidance, ECOS helped to raise its climate ambitions. However, the SBTi for steel could be further improved in a variety of ways, including by:
- Reducing the (substantial) carbon budget allocated to the steel industry – a steeper decline is needed.
- Including upstream methane emissions in the scope.
- Excluding home scrap – an efficiency-limiting byproduct of the rolling and finishing of steel products – from the broader definition of ‘scrap’.
The new guidance in practice
Now that there is new SBTi guidance for the steel sector, companies that choose to can use it to set their individual climate targets – safe in the knowledge that these targets will now be in line with the Paris Agreement. Those who committed to targets according to the previous guidelines will have to review them.
We urge companies that were involved in the process of updating this guidance to drive the uptake of these (voluntary) targets throughout the steel industry. Encouraging companies to integrate these targets into their work is crucial to reduce the sector’s emissions as quickly as possible.
On a broader, political, scale, the European Commission should take inspiration from the SBTi’s new guidance for the steel industry. Companies using the framework are obliged to set emission reduction targets – this must be the first step of every effort towards net zero (as opposed to achieving ‘climate neutrality’ using the deceptive tool of carbon offsetting).
If the new SBTi guidelines for the steel sector are adhered to quickly, this highly polluting industry will move much faster towards net zero. Now that the SBTi has provided the industry with a strong tool, there is no time to waste.
