قالب وردپرس درنا توس
Home / Business / Steel sector to suffer losses rising climate prices climate regulation

Steel sector to suffer losses rising climate prices climate regulation



A man using an angle grinder on a piece of steel at a metal manufacturing company on August 7, 2018 in Orange County, New York.

Waring Abbott | Getty Images

The world's largest steel company does not reduce emissions at the rate needed to keep global warming below 2 degrees Celsius, a failure that puts an average of 14% of companies' potential value at risk, according to a new analysis of the company's earnings profiles .

The 20 companies, which together represent 30% of global steel production, are currently expected to reduce emissions by less than 50% by 2050, falling behind the 65% reduction standard set by the International Energy Agency. [1

9659002] "Steel represents the most emissions-intensive industry – it's a huge footprint," said Luke Fletcher, senior analyst at CDP, the international nonprofit that wrote the new report and works with companies to reveal bottom-line climate change risks.

The report illustrates that polluting companies failed to follow climate regulations and the financial losses they may suffer as carbon prices rise and the planet warms.

For decades, the steel sector has produced essential metal for construction, automobiles and food boxes. However, it is also responsible for 7% to 9% of all direct fossil fuel emissions, according to the World Steel Association, and is currently the largest industrial source of climate pollution.

Pollutants face rising carbon prices

Under a 2 degree Celsius scenario where global carbon prices rise to $ 100 per tonne by 2040, companies have an average of 14% hit risk, from 2.5% to 30% for individual companies, shows the report.

Leaders at the World Bank and the International Monetary Fund have pushed governments to implement higher carbon prices to force polluting fossil fuels to pay for carbon dioxide they release into the atmosphere. Cutting emissions alone, they say, is not enough to effectively combat climate change.

For example, the EU's carbon price has more than tripled since 2018 and is expected to rise in the coming years. ArcelorMittal, a multinational steel company headquartered in Luxembourg, cited higher carbon prices in its decision to cut production in May.

Steel companies are not on track to reduce emissions or avoid economic losses from higher carbon prices. According to the report, while 60% of companies have set emission reduction targets, only two of them are in line with a 2 degree centigrade or below emission targets.

These companies are SSAB, a Nordic and US-based steel company aiming to reach carbon neutrality by 2045, and South Korea-based Hyundai Steel, aiming for an 80% reduction in emissions by 2050.

"The rate at which the steel industry is reducing emissions is too slow for the transition to a low-carbon economy," Fletcher said, "and it must distribute and commercialize radical technologies if it is to avoid ongoing carbon costs and remain competitive."

There is also a geographical gap between higher and lower results. The report showed that Chinese, Russian and US companies are lagging behind European and East Asian companies when developing low carbon technologies.

"Many of these regions do not have strict carbon pricing rules," Fletcher said.

"We found across the board that the companies that did well set ambitions and goals to reduce emissions, look long term and embrace innovation."

Cleaner technology means higher costs

Some steelworks are working with steel production technology that would reduce carbon dioxide emissions and energy consumption, such as hydrogen steel production and electrolysis using clean electricity.

SSAB, for example, develops green steel technologies for hydrogen production. ArcelorMittal works with technology that uses electricity to reduce iron oxides, as well as technology that separates carbon dioxide from waste gases.

However, innovative technology could not be commercially implemented until the 2030s and would increase the cost of steel production by 20% to 30%. Higher production costs can be an incentive for companies to embrace new technologies, Fletcher said.

More technologies are emerging to reduce carbon emissions, and the sector has also become a leader in recycling, as steel is now the world's most recycled material.

"Businesses are aware of the risks that these carbon costs represent, and they can reduce those risks by including cleaner technology and looking at their earnings profiles," Fletcher said.


Source link