Press Release: Four leading steel companies in OECD at risk of locking in almost half a billion tons of CO2
Seoul/London/Washington DC – In the context of rising urgency behind global efforts to combat climate change, the steel industry, a notorious contributor to carbon emissions, is finally coming under scrutiny for its ongoing investments in coal-based steel production. New analysis today reveals that prominent steel companies in advanced economies, including Cleveland Cliffs, POSCO, Tata, and BlueScope, have made plans to invest in the relining of coal-based blast furnaces, potentially resulting in almost half a billion tonnes of additional CO2 emissions.
Re-investing in coal-based steel production is fundamentally incompatible with achieving the 1.5-degree climate target. The relining projects breach the red line set forth by SteelWatch, as articulated in their June launch report, which unequivocally calls for no relining of existing coal-based steel production by companies operating in or headquartered in OECD countries.
SteelWatch: “We are calling out the real time decisions that these steel companies are making to bring the planet that much closer to total climate catastrophe,” said Caroline Ashley, Director of SteelWatch. “Companies and countries can’t have it both ways, you can’t claim to lead on climate action and invest in coal-based steelmaking. As we show, the maths just doesn’t work like that. Half a billion tonnes of extra CO2 is a risk to us all.”
Company websites and proclamations show they are aware of new opportunities to transform to green steel. And yet their practice, revealed by civil society, shows they continue to rely on polluting outdated practices.
Notably, some of the largest furnaces are situated in South Korea, where POSCO, a global steel industry leader, is presently in the process of relining one of their Pohang furnaces and planning to undertake a similar project at the Gwangyang steelworks, while meeting vocal criticism from 24 civil society organizations from around the world who just delivered a letter urging the company to change plans.
In the Netherlands, Tata Steel faces public protests to close coking coal plants, galvanised by research on appalling health impacts. In Australia, BlueScope’s board has gone ahead with approving the relining of Blast Furnace No. 6 in Port Kembla. In the United States, Cleveland Cliffs is postponing one relining project while adding another to their agenda. Cliffs is also attempting to market and charge premium prices for ‘green’ products without demonstrating a measurable reduction in emissions.
These decisions raise serious questions about the commitment of three of these companies (POSCO, Tata, and BlueScope) to align with the Paris Climate Accord’s trajectory as part of their Responsible Steel membership. Moreover, they cast doubt on the sincerity and feasibility of climate commitments made by their respective home countries, including the United States, South Korea, the Netherlands, and Australia.
“Every dollar/euro/won invested into coal based steel makes future climate mitigation and community remediation that much more expensive” said Julia Hovenier with BankTrack. “It’s time for steelmakers in OECD countries to cut ties with coal and go all in on fossil free steelmaking, or risk financial credibility.”
The ripple effect of these decisions extends beyond individual companies. Data from Agora Energiewende reveals that 78% of coal-based steel capacity in OECD countries faces a crucial reline-or-transition decision before 2030. Collaborative efforts among OECD countries have the potential to pave the way for a coal-free steel production landscape. OECD countries and their affiliated companies bear a unique responsibility to phase out coal from steel production, given their historical reliance on coal-based steel production as a driver of industrialization. These decisions must undergo rigorous climate scrutiny to ensure that the transition to cleaner technologies also benefits workers and the communities affected.
The call to action extends to trade and automobile companies, as they wield considerable influence over steelmakers. Major automakers such as General Motors and Ford are under increasing pressure to leverage their purchasing power to advocate for environmentally friendly primary steel production. This pressure must also extend to OECD producers in Asia, where robust supplier relationships exist.
“As trade policies begin aligning with the 1.5C trajectory, how fast a company decarbonises its supply chain will determine its global competitiveness. Top automakers like Hyundai Motors must prioritise phasing out coal from their steel if they want to maintain market leadership,” said Joojin Kim, climate leader and managing director of Solutions for Our Climate (SFOC) in South Korea.
The time for a decisive shift away from coal-based steel production is now. The persistence of these relining projects not only jeopardises competitiveness in a rapidly evolving market but also poses a grave threat to the stability of our planet. The clean steel industry of the future must be constructed today, not deferred to 2040.
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