CN30: it’s time for action

CN30: it’s time for action

Executive Chairman Sanjeev Gupta outlines how our CN30 initiative will become the ‘North Star’ for the Alliance’s work reducing emissions, putting us on track for carbon neutrality by 2030.

It’s impossible to imagine modern life without steel and aluminium.

These two metals play vital roles in helping society to grow and achieve prosperity – and they can be found just about everywhere. Look beneath the footpaths we walk on, and inside our modern buildings, bridges, cars, aircraft and communication devices and you will find aluminium and steel.

As well as making modern life as we know it possible, these metals are also endlessly recyclable, meaning they have essential roles to play in the developing circular economy.

The properties of steel mean it can be continually recycled from one product to the next. Steel recycling also produces only one third of the emissions of primary steelmaking. Aluminium is also entirely recyclable, with recycled aluminium production requiring just five per cent of the power needed to produce virgin aluminium. Of all aluminium ever produced, some 80 per cent is still in use.

Despite this enormous suitability for recycling, steel and aluminium together account for more than 10 per cent 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 per cent of carbon emissions. Aluminium accounts for about 1 per cent of global emissions.

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 legally binding obligations to become carbon neutral by 2050.

Clearly, increasing demand for these metals and moves to achieve carbon neutrality cannot coexist without fundamental change. Environmental and climate change advocates such as Greta Thunberg have put this dilemma 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 and presented a sobering reminder of just how urgent the climate crisis is becoming. It’s not just in our business interests to address this issue – it’s a moral obligation, too. The time for talking is over. The time for action has arrived.

Our opportunity
GFG Alliance 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 available to us in the short, medium and long term.

Through our CN30 (Carbon Neutral by 2030) initiative, we have pledged to lead our industry in this change and to re-tool our own businesses for a carbon-neutral future. I am confident that 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 (EAFs) that are powered, wherever possible, by renewable energy. We will also 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. We will earnestly pursue the exploration of ideas such as hydrogen-reduced iron and research the use of inert anodes in aluminium manufacturing.

As developments and new technologies progress at a rapid pace, there will be other advances 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 rolling out more renewable power projects through our SIMEC Energy division. These will add to the projects that we already have underway, including the Cultana Solar Farm in Australia, the Glenshero Wind Farm in Scotland, and Uskmouth’s waste to energy power station in Wales.

We are now better positioned and better structured at the global level to leverage these developments.

Globally integrated companies with a common goal
In October last year, 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.

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.

The US, French, and German governments have, in my opinion, now recognised the importance of heavy industry and the fact that the global steel and aluminium industries are cyclical, with periods of high demand followed by contraction. There is more work to be done in partnership with governments elsewhere in the developed world to shift their perceptions of the future of heavy industry.

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 drive change of this scale and to address the challenges 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. I look forward to working with you and all members of the GFG family over the coming years to realise this goal.

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