Green Steel Gives Strength to Net Zero Supply Chain Strategies
Steel has functioned as a building block for thousands of years. From roads, to buildings, gas pipelines, cars, and even the knives we use during dinner, steel touches every aspect of our modern lives.
Its fundamental societal role goes back to the Iron Age, when some of the world’s first tools and weapons were manufactured using steel. In the 19th century, it underwent a makeover thanks to inventor Henry Bessemer, who revolutionized the industry with a technique enabling production of large amounts of high quality steel for the first time. Now, 200 years of massive scale has brought its own set of problems. Steel is one of the largest single sources of global carbon emissions in the world – in fact, the industry is responsible for a whopping 8 to 10 percent of emissions.
Despite this troubling statistic, steel is critical to the infrastructure of the modern world. It is here to stay. In 2021, close to 2 billion metric tons of steel was produced globally, a 3.6% increase from 2020 according to the World Steel Association.
In the U.S., infrastructure including roads and bridges are in dire need of repair, an issue Congress recently recognized by passing the Bipartisan Infrastructure Law to fund construction.
At the same time, the steel industry faces mounting pressure to take on a prodigious task: reduce its carbon footprint significantly. Developing and implementing workable and realistic pathways to net zero is a complex and pressing issue. But the steel industry cannot solve the crisis alone. It needs long term partners and collaborators to achieve this lofty goal.
For companies and organizations whose large scale operations require significant amounts of steel, confronting the climate crisis means implementing change across deeper, entrenched systems that go beyond solutions like energy efficiency.
These organizations must consider every aspect of their supply chain as an opportunity to go green.
Multinational corporations feel pressure from both investors and customers to take on long term sustainability goals. Commitments to create sustainable supply chains with green steel infrastructure can have an enormous impact. This is especially true as the number of warehouses continues to grow, having consistently increased every year since 2010.
This is partly thanks to a rise in demand for e-commerce, where growth has resulted in the need for an additional 330 million square feet of distribution space.
It is exactly in these vast spaces where emissions insidiously hide. According to the World Business Council for Sustainable Development, half of all emissions are embodied in buildings, meaning that they are caused by the manufacturing of materials and the construction process.
Target recently built a 2 million square foot warehouse, considered one of the largest buildings in the world, and just one Amazon fulfillment center in Kent, Washington took more steel to build than the 81-story Eiffel Tower for example. To handle large shipments of imports from overseas, the company’s carbon emissions climbed 19% last year. Now, they’re rethinking the consequences of infrastructure on environmental sustainability. In their recently released Sustainability Report, the company says it is reducing embodied carbon in the primary structural materials used in their data centers, concrete and steel – a move which they predict will cut carbon in their structures by at least 20 percent. And tech giant Google is not far off, envisioning its latest campus as the “embodiment of a grander ambition to run its operations entirely free of carbon.”
These changing business practices will create new jobs and open new business opportunities for the steel industry. As steel plays a vital role in supplying parts for renewable energy infrastructure such as solar installations and wind turbines, and companies are increasingly making public commitments to reducing CO2 emissions, high-quality and innovative steel solutions are going to be in high demand. Perhaps most crucial in the race to decarbonize is the ability to scale.
The paths to achieving net zero in the steel industry exist or are steadily on their way to being realized. They include recycling, carbon capture, hydrogen reduction, and electrification. Electrification involves a method called Molten Oxide Electrolysis or MOE. This process does not emit CO2 or other harmful byproducts. Instead, fossil fuels are replaced with renewable electricity to generate currents that convert iron ore into liquid metal.
The commercialization outlook for technologies like MOE is increasingly positive. Innovative and driven startups are working to bring a promising matrix of solutions to market in the race to green the steel industry in the coming years. As more companies take on the challenge of developing tech that can help reduce one of the largest single sources of carbon emissions in the world, they’re going to need partners who are committed to decarbonization goals which prioritize infrastructure.
The severe impact of climate change and global warming as a result of carbon emissions can no longer be ignored. We all share the responsibility of combating the greatest challenges of our time, each step of the way, and for each link in the supply chain.