Cleveland-Cliffs reports lower carbon intensity for 2021 [updated]

Cleveland-Cliffs reported it has made progress toward reducing its carbon emissions per short ton of steel produced, according to a 2021 sustainability report the company released in May

“Our increased consumption of scrap and our successful use of hot-briquetted iron (HBI) in our furnaces to reduce coke rate, enhance productivity and quality, and stretch hot metal production, led to an overall reduction in carbon intensity per ton for 2021,” the report stated.

While the company’s total greenhouse gas (GHG) emissions rose slightly in 2021 over 2020, when production levels were much lower, total carbon emissions per ton of steel produced declined in 2021 over 2020 and prior years, the report noted.

Total steel sales at Cleveland-Cliffs rose to 15.89 million tons in 2021 from 3.78 million tons in 2020, according to the company.

In January 2021, Cleveland-Cliffs set a goal of reducing its total GHG emissions by 25% from 2017 levels by 2030.

Scope 1 GHG measures direct emissions from sources owned or controlled by a company and Scope 2 measures emissions from purchased electricity, steam, heat and cooling.

In 2017 Cleveland-Cliffs’ combined Scope 1 and 2 GHG emissions stood at 44.1 million tonnes of carbon dioxide equivalent, falling to 39.8 million tonnes by 2019. In 2020, GHG emissions fell to 32.2 million tonnes, then rose to 34.5 million tonnes in 2021.

HBI plant

The company’s decision to build the Toledo HBI plant is a cornerstone of its carbon reduction efforts, according to the report.

HBI is used in the company’s electric-arc furnaces and blast furnaces to enhance productivity and the quality of the finished product and is seen as a scrap alternative.

From 2017 to 2021, the company invested $1 billion in the HBI plant, and during 2021 it was able to ramp up operations to achieve full production rates.

In 2021, Cleveland-Cliffs consumed 1.1 million tonnes of HBI in its operations. The HBI plant was designed with a capacity of 1.6 million tonnes a year.

Other investments

Last year the company also made a $775 million acquisition of Ferrous Processing and Trading Co and its 22 scrap processing facilities.

In total, the company has invested $2 billion in efforts that “further sustainable low-carbon intensity steelmaking,” a spokesperson told Fastmarkets on Thursday June 2.

“Another way we are taking action now is ceasing the use of pulverized coal injection (PCI) at Dearborn Works. Instead of PCI we are injecting natural gas — which has lower CO2 emissions than coal — directly into the furnace to reduce coke rates,” the spokesperson said.

The company has also completed installation and commenced operation of two new walking beam furnaces at its Burns Harbor facility. “The furnaces will improve quality and cost competitiveness and reduce fuel consumption and associated GHG emissions,” the spokesperson said.

Imported pig iron

During the company’s first quarter earnings call on April 22, Lourenco Goncalves, chairman, president and chief executive officer of Cleveland-Cliffs, said Russia’s invasion of Crimea in 2014 revealed America’s vulnerability to imported pig iron.

The potential loss of Russian and Ukrainian pig iron for US steelmakers led Cleveland-Cliffs in 2017 to decide “to build a massive source of virgin metallics with our Toledo direct-reduction HBI plants [and] attempt to provide the US electric-arc furnace market with a more reliable and carbon-friendly source of metallics,” Goncalves said during the call.

“In the seven years following the invasion of Crimea, we were the only company to act on this potential to restore our basic metallic supply back to the United States,” the CEO said.

After Cleveland-Cliffs acquired ArcelorMittal USA and AK Steel in 2020 and became the largest flat-rolled steel producer in North America, its decision to build the Toledo plant has delivered the benefits of HBI to its own steelmaking activities, the CEO explained.

Having a reliable source of HBI has allowed Cleveland-Cliffs to reduce its blast furnace footprint from eight to seven units, while maintaining a similar level of steel production.

The company’s use of HBI, combined with its reliance on natural gas, reduced the cost of HBI for Cleveland-Cliffs to just over $200 a ton compared with a $1,000 per ton price tag for imported pig iron.

Cleveland-Cliffs’ lower metallics cost gives it a competitive advantage over steelmakers who continue to rely on imported pig iron to produce steel, Goncalves said.

Editor’s note: This report was updated on Friday June 3 to correct the company’s 2021 steel sales figures as well as its greenhouse gas emissions goal for 2030.

What to read next
Tata Steel intends to continue with plans to close its blast furnaces at the Port Talbot Steelworks in Wales, and called for both of the UK’s major political parties to adhere to the terms of its plan to develop a lower-emissions electric-arc furnace-based steelmaking plant on the site, the firm said on Tuesday June 11
A “special action plan for carbon reduction” unveiled by China's National Development & Reform Commission (NDRC) will reduce the need for coking coal and iron ore by focusing on upgrading existing equipment and the switch to electric-arc furnaces, sources told Fastmarkets this week
China’s exports of finished steel rose year on year in May, according to data published by the General Administration of Customs on Friday June 7
European scrap consuming electric arc furnace output is rising, with demand for higher grade scraps to produce flat steel expected to grow. Fastmarkets has launched prime grade scrap forecasts to capture this
After assessing market feedback, Fastmarkets is extending the consultation period for its proposal to amend specifications of its MB-STE-0782 steel billet export, fob ports Iran and MB-STS-0019 steel slab export, fob ports Iran assessments.
Here are the four key takeaways from the US scrap market participants of our June survey