Canada's Steel Industry: A Sustainable Choice PDF

Canada's Steel Industry: A SUSTAINABLE CHOICE www.canadiansteel.ca #WeAreCdnSteel Steel is an essential material in our evolving world. It is in demand for the technologies and applications of modern society. And it will continue to be integral for the future. The Canadian St...

Canada's Steel Industry: A SUSTAINABLE CHOICE www.canadiansteel.ca #WeAreCdnSteel Steel is an essential material in our evolving world. It is in demand for the technologies and applications of modern society. And it will continue to be integral for the future. The Canadian Steel Producers are proud of our contribution to the circular economy and the overall sustainability of our processes. Working with this 100% recyclable material, we know firsthand the benefits of its durability, reduced emissions, and the resulting conservation of raw materials. The industry continues to make significant improvements in its environmental emissions profile and has reduced its greenhouse gas emissions by approximately 25% since 1990. However, we recognize that we must strive to seek ways to do more. Canada is poised to be a global leader in fighting climate change. Members of the CSPA are ready to work on this global challenge and call on our governments and partners to support us. You will find in the following pages our ideas and perspectives on how we can move forward together for a greener, more sustainable future. CATHERINE COBDEN PRESIDENT, CANADIAN STEEL PRODUCERS ASSOCIATION WE ARE CANADIAN STEEL 03 The Canadian Steel Producers Association (CSPA) is the national voice of Canada’s $15 billion steel industry. Our member companies annually produce approximately 13 million tonnes of primary steel as well as over 1 million tonnes of steel pipe and tube products in facilities located across Canada. Domestic steel operations directly employ some 23,000 Canadians while supporting an additional 100,000 indirect jobs. Canadian steel producers are a critical component of Canada’s economy and industrial base, serving the needs of North American customers with high quality, competitive, and innovative products. Key market segments for member companies include: automotive; energy discovery, extraction, and transport; major infrastructure projects; commercial/residential construction; renewable energy creation; and many general manufacturing applications. CSPA is committed to fostering a strong and sustainable future for Canada’s vital steel producers and enabling our members to prosper in both domestic and international markets. Canadian Steel Markets Energy discovery, Commercial extraction, Automotive & residential & transport construction Major Renewable Other general infrastructure energy manufacturing projects creation applications  04 THE CORNERSTONE OF THE CANADIAN ECONOMY Vital Economic Engine The Canadian steel industry has a long, proud history as a cornerstone of the Canadian economy. Steel is inextricably linked with Canada’s economic growth and prosperity. Steel producers are significant employers in Canada and enable economic growth as a critical supplier to other key sectors, such as manufacturing, infrastructure, transportation, and energy. Responsibly Produced Steel is 100% recyclable and the most recycled material in the world. Canadian steel producers are an integral part of the global circular economy by playing a pivotal role in the recycling of steel and other metals. Canadian producers continue to improve their environmental stewardship by adopting innovative technologies and by ensuring best practices across their operations. Essential for Everyday Life Steel is everywhere in our lives and essential to modern society. Canadian producers provide steel for automobiles, buildings, and infrastructure such as rail, roads, and bridges. Canadian steel is also essential in the energy industry: from drilling and extraction to processing and distributing to renewable energy production.  05 CANADA’S STEEL PRODUCERS HAVE THE AMBITION TO ACHIEVE NET-ZERO CO22 EMISSIONS BY 2050. This is our aspirational goal. We believe it can be achieved if we work with our governments and other stakeholders. We believe that together we can secure the significant capital investments and partnerships needed to implement transformational change and leverage breakthrough technologies over the next 30 years. Our climate approach is based upon achieving five key conditions for success: Creating unique partnerships & research collaborations Developing & adopting breakthrough clean technologies & innovative products Driving operational excellence through state of the art manufacturing Levelling the playing field & supporting carbon advantages of domestic use of Canadian steel Ensuring global leaderership in sustainability, energy management, & environmental best practices  06 IMPLEMENTING THE PLAN: IMMEDIATE ACTIONS The magnitude of the challenge facing the steel sector in implementing this strategy is immense. We must work with all governments, stakeholders, customers, and the supply chain to achieve our vision of a low-carbon steel sector. A robust approach of policies, tools, and programs are critical to enabling the deployment of low- emissions steelmaking. To support the realization of this strategy, CSPA members are seeking tools that include: Establish a Canadian steel climate Deepen existing innovation council with key government programming and secure additional departments to monitor and report funding to drive research, clean on the progress of the sector’s technology development, climate strategy, to share practices, demonstration, and adoption of low to engage with other stakeholders, carbon technologies in the steel sector and to evolve the plan as new and our supply chain, and ensure information and insights emerge; coordination across departments and governments; Recycle all carbon pricing revenues from the steel sector back into the Develop procurement policies and industry to support the development enabling tools both federally and of low-emission technologies; provincially that recognize the inherent carbon benefits of Canadian Expand access to abundant low/zero steel in domestic infrastructure carbon energy supplies for domestic projects; and steelmaking operations; Maximize compliance mechanisms Ensure that steel entering Canada (such as carbon offsets) to manage from countries with higher carbon emissions and associated regulatory emissions are held to equivalent burden linked to the path to low standards and costs. The use of carbon transformation; border measures should be explored.  07 CANADA'S STEEL PRODUCERS' VISION FOR A MORE SUSTAINABLE FUTURE THE DETAILS STEEL SECTOR'S CLIMATE CHANGE 08 CALL TO ACTION Canada’s steel producers have the aspirational goal to achieve net-zero CO 2 emissions by 2050. This means that we must significantly reduce net CO 2 emissions including through removal or offsets. In order to achieve this aspirational goal, we need to work with stakeholders, including suppliers, customers, and government, to implement transformational changes and breakthrough technologies. This includes significant capital investments, public-private partnerships, and policies that support the industry during the transition. Given the scope of the effort and investment needed, the steel sector cannot do it alone. This call to action is to seek support and invite others to join us to develop and implement new partnerships and solutions that will address climate emissions locally and globally. Steel making is carbon intensive and there are no proven, commercially viable, low carbon alternatives to many aspects of our production processes in the near term. To make the changes necessary to drastically reduce our greenhouse gas emissions, we must develop and adopt new breakthrough technologies.  09 We are seeking support to create an innovation ecosystem dedicated to supporting the steel sector’s transition to the low carbon economy. From deeper engagement of Canada’s academic brain trust to improved access to demonstration capital to risk sharing mechanisms for first commercialization and adoption, we envision an innovation pipeline that can accelerate our transformation. We are also calling for the immediate recognition of the domestic steel industry’s unique carbon advantage in Canadian projects. CSPA’s members have a greenhouse gas emission profile that is significantly less than foreign steel being shipped to Canada from China and other far-off places. We believe that Canada’s This is an important opportunity to global leadership to ensure that inherent carbon benefits of address climate change, Canadian steel in domestic projects are coupled with the recognized in procurement projects commitment for action across the country. by the domestic steel industry, is a recipe for We also know that our existing electricity grid and more renewable and long-term success. non-emitting energy sources on this grid will play a critically important role to further differentiating our products going forward. Canada can play a vital role in finding solutions for the global steel industry while still ensuring the ongoing competitiveness of our domestic sector. CREATING UNIQUE PARTNERSHIPS 10 & RESEARCH COLLABORATIONS The size and pace of investment needed to develop and adopt the needed new technological breakthroughs dictate that the steel sector cannot do it alone. There is a need for strong and unique partnerships (government, industry, educational institutions, etc.) to overcome the significant technological, economic, and business risks associated with this transformation. We need a strong innovation system to drive ideation and creativity. The steel sector hopes to inspire more Canadian academics to this immense challenge. We hope to spawn new research areas driving toward our emission reduction goals. We hope to work with Canada’s academic research councils including the National Sciences and Engineering Council of Canada (NSERC) to identify ways the steel sector can attract academics to this challenge. The steel sector will support partnerships focused on developing solutions. Supporting capital renewal is required so that Canada can move quickly on funding research, pilots, and commercialization. We cannot rest on our laurels. There is an urgent need to build on the early success of Canada’s steel sector’s collaborative efforts. Canada’s steel sector has demonstrated its ability to embrace collaboration. A key example includes its decarbonization collaboration efforts through the Canadian Carbonization Research Association (CCRA). The CCRA is undertaking early research into a handful of promising technologies and is comprised of Canada’s integrated steel producers, its existing metallurgical coal suppliers, and the Canadian Centre for Mineral and Energy Technology (CANMET), the federal government’s research lab. It is clear the industry has made significant moves in environmental stewardship. Yet we cannot rest on our laurels when there is more that can be done. There is an urgent need to build on the early success of Canada’s steel sector’s collaborative efforts. DEVELOPING & ADOPTING 11 BREAKTHROUGH TECHNOLOGIES AND NOVEL PRODUCTS In order to drastically reduce the overall greenhouse gas emissions from the production of steel, the development of breakthrough technologies is crucial. According to worldsteel, promising new technologies are being explored around the world. Some projects are in the early research stage while others are in pilot or demonstration phase and none are currently commercially viable. Hydrogen as a reducing agent for iron ore and a fuel to replace fossil based carbon. Carbon capture and storage, as The Canadian well as carbon capture and steel industry utilization. believes that a range of Electrification of fossil fuel technologies processes such as reheat furnaces, is needed to stoves, ladle preheat furnaces, boilers, and building heat. reduce greenhouse gas emissions. Biomass and other wood residues as reducing agents to replace coal. Iron ore reduction by electrolysis.  12 It will be very important to have low carbon production of electricity, hydrogen, and oxygen inputs to these new processes to ensure a net reduction in global carbon emissions. Furthermore, in many applications, steel has a very long service life and as a result the contribution of modern steels in improving the energy efficiency of buildings, plants, machinery and transportation is very important. Additionally, while steel already has a long service life, innovation in high strength and novel so-called modern steels improves the energy efficiency of buildings, plants, machinery, and transportation. These modern steels also yield a significant reduction in weight, energy use, and overall greenhouse gas emissions. According to worldsteel* avoided greenhouse gas emissions from the use of high-grade applications are on average six times higher than the greenhouse gas emissions from the production of these advanced steels. A key contribution of the steel industry is to continue to work closely with its customers to optimize the design and use of steel as Canada transitions into a low- carbon economy. These are some examples of steel advantages that should be recognized and applied to the aspirational goal. * worldsteel represents steel producers, national and regional steel industry associations, and steel research institutes. Members represent around 85% of global steel production. DRIVING OPERATIONAL EXCELLENCE 13 The steel industry has made significant reductions in greenhouse gas emissions in the past decades by improving energy efficiency, and deploying operational technologies and practices resulting in benefits to the environment and economy. We have also adopted process control technology and other innovative technologies, such as robotics, to improve our process reliability, production yields, and overall production efficiencies to reduce losses and the amount of energy used to produce each tonne of steel. However, there is limited room for further improvement based on existing technology. The adoption of new technologies to further advance and optimize steel manufacturing software control systems will continue to drive improvements in our sector. Continued improvements in the steel supply chain, particularly through continued evolution of manufacturing technologies, will drive continued yield improvement from steel production to final steel in products, equipment, buildings, and infrastructure. LEVEL THE PLAYING FIELD & SUPPORT 14 CANADIAN STEEL'S CARBON ADVANTAGE Global steel markets continue to evolve at a rapid pace and the competition for steel is exacerbated by a global overcapacity of roughly 440M tonnes according to the OECD. The need has never been greater for the sector to ensure a strong domestic marketplace, to evolve sustainably through innovation, and to ensure competitive advantages are built and protected in the face of these changing dynamics. We are unlikely to see a level playing field To this end, the Canadian steel producers on carbon reduction requirements across believe that procurement policies and the world in the near term. trade measures such as carbon border adjustments must be reviewed to ensure As a global climate leader, Canada has an that carbon leakage is prevented. opportunity and, indeed, an obligation to ensure climate considerations are Simply placing carbon burden on embedded in a wide array of policies and Canada’s domestic steel industry without programs that reward climate movers recognizing the lack of carbon burden on and support the low carbon transition of our competition would place us at a its domestic industry and economy. significant competitive disadvantage. Given Canada’s climate leadership, the country must be at the forefront of the development and implementation of enabling policies and programs that ensure both our low carbon transformation and the maintenance of our competitive position. ENSURING GLOBAL LEADERSHIP IN 15 SUSTAINABILITY, ENERGY MANAGEMENT AND ENVIRONMENTAL BEST PRACTICES Energy management and efficiency practices are a fundamental aspect of ongoing improvements to the sector’s greenhouse gas emission profile. We have placed significant effort on improving operational and energy efficiency, resulting in a dramatic improvement over the years. Moreover, ongoing efforts with the federal government continue to provide updated tools in support of the adoption of energy best practices and the implementation of technologies that maximize the benefits of Canada’s ever-greening electricity grid. As part of our climate strategy, it is critical that we have access to energy for our operations across Canada at a cost that allows us to compete. Access to renewable energy serves as a dual opportunity for our sector with anticipated greenhouse gas reductions given our high energy demand, as well as our unique role as a key supplier to the renewable energy market. Renewable and non-fossil energy solutions, such as nuclear and hydro-electric, require steel for foundations, buildings, mounting racks, and, importantly, the transmission grid to connect it all. With the low CO2 footprint of domestic steel, policies that consider the lifecycle costs of all components will be a win-win for the environment and the economy. STEEL AND THE CIRCULAR ECONOMY 16 As a permanent material that can be recycled over and over again without losing its properties, steel is fundamental to the circular economy. The industry has continued to expand its offer of advanced, high-strength steels, which reduce the weight of applications and encourage circular economy practices. For society, the benefits include reduced emissions, durable products that simply last a long time, and the conservation of raw materials for future generations. Steel is essential to our evolving world. It is essential to the technologies and solutions that meet society’s needs today – and will continue to do so into the future. "Steel is essential to our evolving world." * Source: worldsteel The Canadian steel sector is a key contributor to the circular economy through our significant capacity to infinitely recycle steel into new products. Today, material efficiency is an integral part of the modern steelmaking process. Our goal is to use all raw materials to their full capacity, ensuring minimal waste and guaranteeing that almost every co-product formed during steelmaking is used in new products. In addition, many of our co-products are utilized for other applications in commerce and industries. This approach minimizes the amount of waste sent to landfill, reduces emissions, and preserves raw materials.  17 100% 97% 2.7% Almost 100% of all the steel industry's of the steel industry's raw materials were the amount of raw steel material co-products can be converted into steel or that became reused co-products (2018) waste (2018) * Source: worldsteel In a truly circular economy, products that Over the past 50 years, the steel stop working are restored to “as new” industry has invested in research and conditions in a process known as technology to create grades of advanced remanufacturing. Steel is 100% steels. For example, by reducing the recyclable, easily recoverable from waste weight, the amount of raw materials and streams, and can be repurposed energy used to create the product is infinitely. This, in combination with a long decreased, reducing pressure on raw history of significant efforts to increase materials. Lighter weight applications recycling rates, has resulted in steel’s which take advantage of high-strength place as a leader in the circular economy steels, such as vehicles, also produce as well as leading the country’s and the fewer emissions during the “use” phase world’s recycling statistics. of their life. In Canada today, an important Whether it is a wind turbine, proportion of our production is based on construction panel, vehicle, or steel can, recycled scrap feedstock. The use of steel the application of high-strength steels scrap reduces carbon emissions from the means that less steel is required to steel life cycle and should serve as an provide the same strength and offset. Only truly recycled materials, functionality. Steel’s durability also which are never downgraded but are enables many products to be reused at used again and again with no loss of the end of their life. As well as extending properties, can enable a sustainable the product’s life cycle, reuse avoids the future. The non-renewable resources need to transport and re-melt the steel used to make steel, like minerals and and to create new products. This has fossil fuels, are not wasted because the significant advantages for the steel will be used forever. It is also a environment and maximizes the use of material that will be essential in the resources. strategies for climate change adaptation and resilience.  18 We are excited about the monumental benefits our climate aspiration has the potential to deliver, and we look forward to taking this challenge forward, in collaboration with all of our partners, including government.  Contact Us Canadian Steel Producers Assocation canadiansteel.ca @CSPA_ACPA