07 Oct 2021

British Steel unveils Low-Carbon Roadmap with net-zero pledge

British Steel today unveiled its Low-Carbon Roadmap, outlining its commitment to achieving net-zero status through the biggest transformation in its history.

The company has pledged to invest in a range of technologies to deliver net-zero steel by 2050, and significantly reduce its CO2 intensity by 2030 and 2035.

Its roadmap, which is in line with UK commitments to the Paris Agreement, will see the business adopt a science-based target in order to validate its reductions.

British Steel Chairman and Jingye CEO Huiming Li said: “We firmly believe our products can play a central role in transitioning to a low-carbon, circular economy and we have ambitious plans to reduce the carbon intensity of our operations, with solutions that are globally recognised and accepted.

“Embracing new technology and ways of working will help our drive towards a phased reduction of CO2 emissions by 2030, 2035 and 2050. And while there is no doubt decarbonisation is a major challenge for our business – the biggest we have faced in 130 years of steelmaking – we’re committed to creating a clean, green and sustainable future for British Steel.”

British Steel’s efforts to decarbonise the business are already underway, with a variety of projects being implemented to improve environmental performance. For example, it has recently increased the amount of scrap used in the integrated steelmaking route and plans to further increase this by 2023, and it is progressing the use of Hot Briquetted Iron (HBI) and scrap in the iron making process. These will have an immediate and significant CO2 reduction.

To help achieve its net-zero targets, British Steel will use a range of techniques and innovations including:

  • Assessing and adopting several technology options such as Carbon Capture and Storage, hydrogen, increasing scrap utilisation and Electric Arc Furnace steelmaking
  • Steel product innovation to promote the material benefits to end users, for example through light weighting and life extension
  • Supporting recycling and reuse, for instance using increased levels of scrap in its steelmaking process and encouraging re-use of steel products at the end of life, where appropriate
  • Deploying circular economy and material efficiency methodologies

Mr Li said: “When we bought British Steel 18 months ago we promised to transform the company into a sustainable business and decarbonisation is fundamental to this. We have implemented a number of significant projects to enhance operations and, fuelled by the drive of our employees, we have introduced many positive changes.

“A great deal of hard work lies ahead but achieving aggressive emissions reductions is possible within the ambitious timescales of the UK government. However, successful implementation of our Low-Carbon Roadmap requires appropriate backing from the UK government through supporting policies and frameworks.

“The UK government has already been supportive of the measures we have in place to significantly improve our manufacturing operations, energy efficiency and environmental performance in agreed timescales. Now we require its site-specific support for a rapid transition, which will partially involve technologies not yet available on an industrial scale. We will work closely with them to achieve current and new targets and deliver on our net-zero promise.”

British Steel, which is a member of the Zero Carbon Humber (ZCH) partnership, said it is also committed to working with its customers, suppliers and community stakeholders on the road to decarbonisation.

Mr Li said: “Steel is the world’s most recycled material and vital to modern economies. Over the coming decades, global demand is expected to grow to meet rising social and economic need, so we’ll keep working together with our customers and suppliers to ensure we deliver the net-zero steel society needs.”

Find out more about Sustainability at British Steel >


Why has British Steel adopted a climate change target?

Through the 2015 Paris Agreement, world governments committed to limiting global temperature rise to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. In 2018, the Intergovernmental Panel on Climate Change (IPCC) warned that global warming must not exceed 1.5°C above pre-industrial temperatures to avoid the catastrophic impacts of climate change. To achieve this, greenhouse gas (GHG) emissions must halve by 2030 – and reduce to net zero by 2050.

Many of our customers require us to have climate change targets and be working to reduce our CO2 intensity. The SteelZero initiative is a scheme that customers can sign up to in order for them to demonstrate their commitment to carbon reductions. SteelZero is an initiative by the Climate Action group who are an international non-profit group founded in 2003.

A SteelZero commitment by a steel user requires them to buy 50% of steel by 2030 that is low carbon as defined by SteelZero initiative.

SteelZero has minimum requirements as follows:

  • Long-term commitment: commitment to [procuring / specifying / stocking] 100% of steel requirement by 2050 being net-zero steel
  • Interim commitment: commitment to [procuring / specifying / stocking] a total of 50% of steel requirement by 2030 meeting one or a combination of the following conditions:
    • ResponsibleSteel™ Certified Steel
    • A science-based target approved by the SBTi (Science Based Targets initiative)
    • Low-embodied carbon steel as defined by SteelZero

Internal analysis shows that the best path for British Steel to meet one of these requirements is by adopting a science-based target.

It’s important to understand how CO2 emissions are characterised. Typically, we use the terms Scope 1, Scope 2 and Scope 3 emissions, these are explained below.

  • Scope 1: these are direct emissions that occur from sources owned or controlled by the company, for example, emissions from combustion in owned or controlled boilers, furnaces etc; emissions from chemical production in owned or controlled process equipment.
  • Scope 2 accounts for emissions from the generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organisational boundary of the company. Scope 2 emissions physically occur at the facility where electricity is generated. Scope 2 emissions could also be associated with steam generation if the production of steam is by a third-party company.
  • Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. Scope 3 emissions are a consequence of the activities of the company but occur from sources not owned or controlled by the company. Some examples of Scope 3 activities are extraction and production of purchased materials; transportation of purchased fuels; and use of sold products and services.

The distribution of CO2 emissions for British Steel is approximately as follows:

  • Scope 1 – 89%
  • Scope 2 – 3%
  • Scope 3 – 8%

It is essential that British Steel is focused on reducing its Scope 1 and 2 emissions that are under our direct control.

Why adopt a science-based target?

A wide range of emissions reporting scopes exist but there is, as yet, no harmonised and globally recognised definition of net-zero steel nor green steel. A number of organisations, including but not limited to World Economic Forum, Energy Transitions Commission, ResponsibleSteel™, Science Based Target initiative and the ACT (Assessing low-Carbon Transition®) Initiative, are currently working on the development of such a definition.

Based on the adoption and growth of SteelZero, it’s deemed to be the best approach to adopt a science-based target and review the target and scope framework as this area develops.

I understand that CO2 emissions are commonly separated in to 3 groups called ‘Scopes’. For our Low-Carbon Roadmap, which CO2 emissions will be included?

We’ve proposed and modelled CO2 reductions based on Scope 1 and Scope 2 emissions. This is for several reasons. Firstly, we must focus on the largest proportion of emissions so Scope 1 must be included. Secondly, we’d expect Scope 2 emissions to be a much greater percentage of the total with potential electrified steel making. Therefore, it is correct to include these now, and the model includes increases in Scope 2 emissions in the overall reduction plan. Thirdly, we expect the UK electricity grid to continue to decarbonise over the next 10-15 years therefore we need to be prepared to claim this benefit in later years. Lastly Scope 3 emissions are excluded as they are relatively small and the ability of British Steel to fully influence emissions reduction in this category is deemed to be low, and Scope 3 is seen as a lower priority for emissions reduction.

We expect the assessment of steelmaking CO2 emissions globally to continue to be developed and in the medium term we might have a need to reassess using emerging methodologies to include Scope 3 emissions.

What is low-embedded carbon steel, net-zero steel and how do we measure CO2 emissions?

Low-embedded carbon steel is a term British Steel will use to describe steel produced by British Steel that has significantly lower carbon intensity associated with its production than our steel has today. There is not a quantifiable figure that British Steel recognises nor is there an international standard for low-embedded carbon or green steel.

A number of organisations, including but not limited to World Economic Forum, Energy Transitions Commission, ResponsibleSteel™, Science Based Targets initiative and the ACT Initiative, are currently working on the development of such a definition.

Net zero is a term used nationally and internationally to describe a position in 2050 where the net CO2 emissions are such to prevent temperature rises that drive the dangerous effects of climate change. At present, we’ve adopted the term net-zero steel as our adoption of a science-based target, which demonstrates a reduction pathway to support the steel sector’s contribution to a sustainable position by 2050.

British Steel reports its direct CO2 emissions for the Scunthorpe Works, Teesside Beam Mill and Skinningrove Special Profiles mills to the UK Regulator the Environment Agency and this data is independently verified by BSI Assurance UK Ltd. This data is based on the Greenhouse Gas Regulations and UK Emissions Trading Scheme scope (UK ETS).

In 2013 worldsteel developed a common methodology to measure CO2 emissions in steel plants – ISO 14404:2013 ‘Calculation method of carbon dioxide emission intensity from iron and steel production’. The scope of reporting includes the upstream manufacture of electricity, raw materials and fuels.

Externally we may in the future continue to use the worldsteel methodology for reporting CO2 emissions. The Low-Carbon Roadmap uses UK ETS Scope 1 data combined with Scope 2 data based on UK government annually published CO2 emission factors for electricity generation. We use data from the worldsteel methodology for Scope 3 emissions.

Why adopt targets for 2030, 2035 and 2050?

Through the adoption of the 2015 Paris Agreement, the UK government has set a target of net-zero carbon emissions by 2050 for the UK; note this is for the country and not specific sectors. The UK government has set in law an additional climate change target, cutting emissions by 78% by 2035 compared to 1990 levels to meet the overall target of Net Zero by 2050.

Globally 2030 is widely seen as a suitable interim target ahead of a net-zero target in 2050 and is used by SteelZero as the interim target deadline.

The Low-Carbon Roadmap is designed to deliver CO2 reduction by 2030, 2035 and 2050 to align to UK national, international and customer-driven reduction targets.

What is a science-based target?

The Science Based Targets initiative (SBTi) drives ambitious climate action in the private sector by enabling companies to set science-based emissions reduction targets.

The SBTi is a partnership between CDP (https://www.cdp.net/), the United Nations Global Compact (www.unglobalcompact.org), World Resources Institute (WRI) (www.wri.org) and the World Wide Fund for Nature (WWF) (panda.org/climatebusiness).

Science-based targets provide a clearly defined pathway for companies to reduce carbon emissions, helping prevent the worst impacts of climate change and future-proof business growth.

Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.