Environment and Energy

SMA: US steelmakers deserve credit for leading decarbonization charge

Written by Philip Bell

March 1, 2024

When it comes to finding ways to reduce emissions in steel manufacturing, we are in the all-of-the-above camp. Hydrogen, carbon capture and storage, renewable energy, nuclear power, direct-reduced iron (DRI) — all have shown promise. Some, such as on-site solar power, are already a significant part of day-to-day operations at mills operated by members of the Steel Manufacturers Association (SMA). Others are not yet ready for widespread commercial use but could get there soon. In time, breakthrough clean technologies could revolutionize steelmaking.

What we can say for sure is that the American steel industry’s emissions profile is the envy of the world, owing largely to the scrap-based steelmaking that makes up nearly three-fourths of US capacity. On average, an electric-arc furnace (EAF) produces 75% fewer carbon emissions than the extractive, coal-intensive process that integrated steelmakers use. American steel producers are between 75% and 320% more carbon efficient than global producers, depending on the product category, according to the Climate Leadership Council.

Investment in EAF, DRI and other clean steel processes is growing. Between 2021 and 2025, SMA members will have invested $18 billion of their own capital in new or expanded low-emissions operations. Each new project seems to improve on the efficiency of the last one, ensuring that American steelmaking gets cleaner all the time. For instance, one SMA member, SSAB Americas, is already making tens of thousands of tons of SSAB Zero steel plate, which it produces in Iowa, with no carbon emissions per ton.

That’s why we have been surprised in recent days to encounter claims that the United States lags Europe in pursuit of low-carbon-emissions steel manufacturing. Nothing could be further from the truth.

Canada, Germany, the United Kingdom, and other countries are subsidizing a transition to EAF and other low-emissions production at the expense of blast furnaces and basic oxygen furnaces. Altogether, European governments in 2023 committed to invest 8.7 billion euros to make their steel industries look more like ours, according to the GMK Center, a Ukrainian consulting firm.

Why does it matter who is leading the pack? Because current climate and trade rules do not give American steel producers credit for their cleaner operations. And the idea that they trail European companies in pursuit of low emissions makes it harder for them to get fair treatment when it comes to climate and trade.

Integrated steelmakers around the world could make huge cuts to carbon emissions by replacing their blast furnaces and basic oxygen furnaces with EAFs and other low-emission production methods. Instead, many have announced plans to reline their coal-intensive furnaces and use them for decades to come.

To be sure, some are banking on heavily subsidized projects using technologies that are not yet commercially viable. We respect their pursuit of lower emissions, and we wish them success. After all, everyone benefits from emissions reduction.

But make no mistake: American steel producers are leading the charge toward decarbonization. Let’s make sure they get the credit they deserve.

Philip Bell

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