The concept of “carbon neutrality” is a crucial element of today’s environmentalism.
A clear direction of what Hyundai Steel should follow for carbon neutrality can be gained by understanding exactly what carbon neutrality is and by learning from the policies implemented by the world’s major countries.
Voluntary Carbon Neutrality
Carbon neutrality refers to achieving net-zero carbon dioxide emissions by balancing carbon dioxide emissions with the removal of carbon dioxide from the atmosphere. Commitment worldwide to combating climate change continues to solidify, accelerating the shift toward carbon neutrality on a global scale. Along with the world’s key countries, a number of the largest companies in the world are embracing the trend of carbon neutrality.
Actioning Carbon Neutrality
In 2018, the steel industry was responsible for 105 million tons of carbon dioxide emissions, the highest level among all industries. This is a clear indication that something must be done.
There are two ways carbon neutrality can be actioned. The first is to build forests that would supply enough oxygen to offset carbon dioxide emissions, or to invest in renewable energy that can replace fossil fuels. The second is to purchase enough Certified Emission Reductions (CERs)1 for carbon dioxide emissions.
1) CERs are a unit of the right to emit carbon dioxide. CERs can be traded in a marketplace with their prices being set by converting carbon dioxide emissions to a monetary value. Proceeds from the sale of CERs go toward increasing carbon dioxide removal by means such as the planting of forests.
Carbon Neutrality Aspirations
Central governments, consumers, and investors around the world are pushing for carbon neutrality. To date, 110 countries have taken on the “Net Zero” objective, and 32 of those are implementing relevant policies. Consumers who equate environmentalism with survival are pressuring businesses, and investors are setting ESG (Environmental, Social, and Governance) as a guiding principle in investment, demanding that carbon-powered industries make a fundamental change in business model and energy use. The trend of carbon neutrality we’re seeing today is a monumental one that we can all be proud of.
Using electric furnaces as the primary means of product on can make a significant contribution to carbon neutrality. Businesses that use traditional furnaces powered by iron ores and cokes are responsible for 90% of carbon dioxide emissions. Manufacturing steel with an electric furnace reduces carbon dioxide emissions per ton by more than four times compared with a traditional furnace. World Steel Dynamics (WSD) expects the share of electric furnace-based production to increase from 30% in 2019 to 54% in 2050. This means that a large number of products made using the traditional furnace, including sheet metal, can and should be made with the electrical furnace instead.
Achieving carbon neutrality requires a large-scale change of facilities, and this no doubt presents a tremendous challenge to steel manufacturers, who have been dependent on the traditional furnace in production. To survive the restrictions placed on the steel industry by carbon neutrality, optimum technology and stable supply of materials are essential. With the traditional furnace, coal is used to generate carbon monoxide which reacts with iron ores to generate steel and carbon dioxide. Hydrogen-based steel-making, on the other hand, uses hydrogen to cause a reaction with iron ores which generates steel and just water, so it’s a given that pursuing hydrogen-based steel-making technology will provide a competitive edge in the race for carbon neutrality. Electric furnace technology that can match the scale and quality of production of the traditional furnace should also be pursued.
Carbon Neutrality Efforts of Japan, US, and Europe
Hyundai Steel’s Vision of Carbon Neutrality
Hyundai Steel has made the decision to join the global movement to save our beloved planet. A roadmap detailing long-term strategies that will see us carbon neutral by 2050 will be created in the second half of 2021, and shared with all of you when it is complete.