ArcelorMittal accused of net-zero greenwashing over carbon capture plans

Image: ArcelorMittal

The Institute for Energy Economics and Financial Analysis (IEEFA) has this week published a report rapping ArcelorMittal for its plans to deploy carbon capture, usage and storage (CCUS) technologies at new and existing blast furnaces in the global south – and to open new fossil-fuelled facilities with no CCUS.

Under a joint venture with Nippon Steel, ArcelorMittal is developing two new blast furnaces in Hazija, Gujarat, India, with co-located CCUS. It is also planning new integrated steel plants at other locations in India, without CCUS.

While proponents of CCUS note that carbon removals will be necessary to avert the worst physical impacts of climate change – and that hard-to-abate industrial sectors are likely to grow through to 2050 rather than shrink – IEEFA expresses concerns about the maturity of CCUS technologies in its report.

“There are no full-scale CCUS facilities for blast furnace-based steelmaking operational anywhere in the world and only a few, small pilot projects underway or planned.” IEEFA steel analyst Soroush Basirat said. “In addition to a very limited track record in steel, CCUS has had a problematic and disappointing history in other sectors like power generation and gas production.”

Globally, the collective capacity of all operational CCS and CCU plants is estimated to be 38.5 million metric tonnes. These arrays are addressing less than one-thousandth of global emissions annually, which now exceed 50 billion tonnes.

Some major projects are not operating at their stated capacity. The Century Plant project in the US, one of the worl’ds largest, had aimed for an 8.4-million-tonne capacity but, in reality, is operating closer to five million tonnes. In other words, it is delivering around 60% of the capture promised.

As such, there is a risk that plans for steelmaking facilities with CCUS could pump more greenhouse gases into the atmosphere than initially stated, if the technologies do not deliver.

The report also throws up questions relating to climate justice and the just energy transition on a global scale. It questions why ArcelorMittal is betting so heavily on CCUS in the global south while directly preparing to reduce its fossil fuel use in the global north in the first instance.

Last autumn, ArcelorMittal announced a new $1.3bn programme to scale up hydrogen-ready, direct reduced iron (DRI) technology in Canada. It also set out similar plans for markets including Spain, Germany, France and Belgium. IEEFA believes this is a safer bet for significant emissions reductions.

Company’s response

Responding to IEEFA’s criticism of its “two-speed decarbonisation” plans, an ArcelorMittal spokesperson told edie: “We have been very clear about the fact that the journey to net zero for the steel industry will require more than one technology route.

“That is why we are progressing two technology routes – one utilising green hydrogen and the other CCUS – and developing a third, direct electrolysis.  Steel is now widely recognized as a hard-to-abate industry and those who have taken the time to analyse the industry closely generally support the view that more than one technology will be required to take the industry to net zero.

“The International Energy Agency, for example, forecasts that over 50% of steelmaking will be CCU/CCUS based by 2050.”

Regarding the collaboration between Nippon Steel and ArcelorMittal in India, the spokesperson added that both firms are “acutely aware of the need to support the country’s growth and also the responsibility to start a journey to net-zero”.  They confirmed that a 2030 emissions target is in the works for the joint venture, but this will be on an intensity basis. In other words, absolute emissions could increase, so long as the level of emissions per tonne of product decrease.

The spokesperson elaborated, noting that there would be an option to shift to DRI technologies in India in the future: £The new blast furnaces will be best available technology with the potential to add on carbon capture and storage in the future.  There is also the potential to use hydrogen in the blast furnace, which also results in a reasonable decrease in emissions.

“Furthermore, ArcelorMittal/Nippon Steel India also has DRI-based capacity, which it can convert to green hydrogen as and when it becomes economically available.   Five million tonnes out of 14 million tonnes will have the potential of working on a very high hydrogen percentage.   ArcelorMittal has also taken steps to support ArcelorMittal/Nippon  India with its decarbonization efforts, having announced a US$0/6 billion investment in a 975MW renewable energy project that will supply 20% of the electricity the Indian joint venture operations consume.”

Climate credibility questions for corporates

Earlier this week, a new analysis of the climate commitments of 24 corporates regarded as climate leaders concluded that near-term efforts to decarbonise are “wholly insufficient” to enable firms to reach net-zero in the long run, with a reliance on carbon offsetting outlined as a major concern.

The analysis was from the New Climate Institute and Carbon Market Watch. It found that the plans of the companies, collectively, would result in less than half of the emissions reductions through to 2030 required in a 1.5C scenario.

Scrutiny of corproates’ net-zero pledges is becoming more intense as frameworks against which they can be assessed become more mature. Building on the launch of the Science-Based Targets Initiaitve’s Net-Zero Standard in 2021, and the subsequent launch of Carbon Trust’s Route to Net-Zero Standard, the UN moved late last year to publish new guidance for net-zero strategies without greenwashing.

The guidance covers issues such as investment in expanded fossil fuel supply; deforestation; carbon offsetting and setting intensity-based emissions goals which allow absolute emissions to grow. It also urges organisations to stop lobbying – directly or indirectly – against stronger climate policies.

The We Mean Business Coalition’s chief executive Maria Mendiluce has this week taken to LinkedIn to caution against too much criticism of corporate climate targets.

“Broadly speaking, I would rather see a million companies worldwide roll up their sleeves and getting on with delivery of imperfect climate plans today, rather than lose another decade arguing with the few thousand companies already underway to get their plans to be faultless,” she wrote.

“We can’t afford to let perfection be the enemy of companies taking climate action.”