At a glance
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- Steel and aluminium are the building blocks of our everyday lives, and demand is expected to double for both in the next 30 years.
- The production of both metals contributes about 10% of global carbon emissions.
- Many countries are legislating to become carbon neutral by 2050 – meaning it’s time for action.
Our Executive Chairman, Sanjeev Gupta, outlines how our CN30 initiative will drive our group to carbon neutrality by 2030.
It’s impossible to imagine modern life without steel and aluminium.
It is essential to our society’s growth and prosperity. It is all around us – from the materials it is made of under the ground we walk on, all the way to the buildings, bridges, cars, planes and all the other everyday items that we take for granted and enable us.
Steel and aluminium are the building blocks of our everyday lives, making modern living possible and improving it in countless ways. They are also vital materials in the circular economy, being among the world’s endlessly recyclable materials.
The properties of steel allow it to be recycled continually from one product to another. Steel recycling has only a third of the emissions compared with primary steelmaking.
Of all aluminium every produced, 80% is still in use. Like steel, it is entirely recyclable and can be recycled with 5% of the power used to produce virgin aluminium.
Yet steel and aluminium together account for more than 10% of global carbon emissions. Globally, most steel is manufactured using blast furnaces, releasing on average 1.89 tonnes of carbon dioxide for every tonne of steel made and accounting for 7-9% of carbon emissions. Aluminium accounts for about 1% of global emissions. And as developing countries continue to industrialise, demand for both steel and aluminium is expected to double over the next 30 years.
At the same time many nations are making it legally binding to become carbon neutral by 2050. Clearly these two cannot coexist without fundamental change. Environmental and climate change advocates, like Greta Thunberg, have put this firmly on the social and political agendas. Even Bill Gates has identified this as a top global priority – when asked in any conversation about climate change, his key question is: what’s your plan for steel?
Over the last year, bushfires in Australia and floods in the UK have affected our own operations – a sobering reminder of just how urgent the climate crisis is becoming. It’s not only in our business interests to address this – it’s a moral obligation too.
The time for talking is over. The time for action has arrived.
GFG has always been a disrupter, indeed ‘change’ is our very first value. It is clear we need to address this challenge urgently and collaboratively, by exploring all options, over the short, medium and long-term, that are available to us.
Through our CN30 (Carbon Neutral by 2030) initiative, we have pledged we will lead our industry in this change, re-tooling our businesses for a carbon-neutral future.
I am confident we can become the world’s first carbon neutral steel and aluminium group by 2030, but we can’t do that without working collaboratively with industry partners, and policymakers.
Our approach will be to continue our focus on recycling scrap steel in electric arc furnaces, powered wherever possible, by renewable energy, and to build an aluminium business of global scale – similarly fuelled by carbon-neutral means. We have strong foundations through our established GREENSTEEL and GREENALUMINIUM manufacturing approaches that we can build on.
That will take us most of the way to our carbon-neutral target but to reach it entirely and more importantly to lead our industry out of carbon forever, new technology will be essential, including exploration of ideas such as hydrogen-reduced iron, and research the use of inert anodes in aluminium manufacturing, which we will pursue in earnest.
As developments and new technologies progress at rapid pace, there will be other advancements in manufacturing and sustainable power generation that we can harness to optimise our production and operational efficiency.
Over the next five years, we will transition our blast furnaces to EAFs in a managed transition, while at the same time, roll out more renewable power projects through our SIMEC Energy division, like those we already have underway such as the Cultana Solar Farm in Australia, the Glenshero Wind Farm in Scotland, and Uskmouth’s waste to energy power station in Wales.
We are also now better positioned and structured globally to leverage these developments.
Globally integrated companies with a common goal
In October 2019, I announced the global consolidation of our steel business through the establishment of LIBERTY Steel Group. The group brings together all our steel businesses around the world, with the explicit target of becoming the world’s first carbon neutral steel company.
This pledge has now been extended to cover our new global aluminium brand, ALVANCE, which will be headquartered in Paris and groups together all our aluminium businesses. I announced this during my time at the World Economic Forum in Davos, in January 2020.
Achieving such radical change won’t be easy. But we have an opportunity to work with Governments, industry partners, customers and the financial community to be at the forefront of what I think will be a global green revolution to revive industries in developed countries.
From an economic viewpoint alone, we know steel and aluminium jobs are valuable and indirectly support 6 to 7 jobs in the wider economy.
Strategic approach with a destination in mind
We have set ourselves an ambitious challenge and target – to become carbon neutral by 2030. But bold targets and decisive actions are required to really drive change of this scale and address the challenge presented by climate change.
As a responsible business, the legacy we pass on to future generations is every bit as important to us as our bottom line, and if we’re successful, there will be a huge economic and social dividend, as well as a game-changing environmental outcome.
This will deliver true sustainability; economically, for local communities and society at large; and for our planet.
Future generations are demanding change, our survival as a sector demands it.
We have started our journey but have a long way to go.