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Formed in November 2022, the GSCC consists of steel manufacturers, associations and other organizations in the steel supply chain. Its founding members are the Steel Manufacturers Association, Nucor Corporation, CELSA Group, Steel Dynamics, Inc., Commercial Metals Company and the Institute of Scrap Recycling Industries.
The emissions reporting standard released by the GSCC, the Steel Climate Standard, offers a single protocol that would apply to all steel producers equally and would let steel buyers compare carbon emissions, the GSCC announced on Wednesday April 26.
The new standard differentiates itself from the “sliding scale” approach adopted by some steelmakers, which features one standard for steel made from traditional production processes that rely on mined and processed coal, iron ore and limestone, and another for steel made from circular processes such as using electric-arc furnaces (EAFs), according to the GSCC.
“The sliding scale is greenwashing because it allows for a higher threshold on steel products, depending on the production route. In other words, an integrated or blast furnace steel producer can produce the exact same steel product as an EAF producer but that still would have nine times higher carbon content,” Phil Bell, president of the Steel Manufacturers Association, told Fastmarkets in an interview.
The GSCC asserts that the “ferrous scrap usage sliding scale” used in other standards allows high-emission steel products to be erroneously labeled as “green.”
Under a sliding scale, two steel products could be classified as equally ‘green,’ even though one was produced by creating multiple times more carbon emissions than the other
“Under a sliding scale, two steel products could be classified as equally ‘green,’ even though one was produced by creating multiple times more carbon emissions than the other,” the GSCC said.
“Creating a dual standard would allow high-carbon emissions steel to be prioritized over lower-carbon steel. This is a form of greenwashing and serves to discourage innovation and allows high-carbon steelmakers to postpone making changes in their production process,” Bell said.
“The problem we have with [the sliding scale method] is that it discriminates against steel producers that use the EAF method and recycled ferrous scrap as their primary raw material,” he continued. “It essentially says that coal-based steel production is just as clean as electric steel production that uses recycled material…What we need is one standard, regardless of the steel making route, that is easy to understand and that is fair.”
The “sliding scale” is one component of ResponsibleSteel’s — a third-party global provider of sustainability standards and certifications — International Standard.
ResponsibleSteel did not respond to Fastmarkets’ request for comment.
The GSCC’s new standard comes amid an ongoing effort to align various methodologies of calculating and reporting greenhouse gas (GHG) emissions in the steelmaking process, which has become a challenge, sources previously told Fastmarkets.
“We need to continue the debate and the discussion about what is the right standard for the global steel industry,” Bell said.
“We need to coalesce around one [standard] to be able to communicate to stakeholders, particularly governments — the US government and the EU — about how to approach carbon reduction in the sector, and if they see all of these different standards floating around it’s really tough for them to have something to refer to,” he added.
“The GSCC single standard will encourage all producers to reduce their carbon emissions and create a level playing field for all manufacturers. The US-EU negotiations should not create a double standard and a slippery slope toward a dirtier environment,” Bell said.
The goal of the Steel Climate Standard is in accordance with the International Energy Agency’s (IEA) carbon budget for the iron and steel sector to limit global warming to 1.5°C by 2050, the GSCC said.