FAQs & GLOSSARY
Get answers to the most frequently asked questions about green steel and sustainability, as well as brief explanations of the most important terms.
Right now, there is no universal definition of green steel. It is often used as an umbrella term to describe any steel with reduced carbon emissions during production. We think only steel with the lowest possible carbon emissions should be called “green.” meaning steel produced using direct reduced iron + green hydrogen or an electric arc furnace + 100% scrap and renewable electricity to eliminate emissions as far as possible. Other steel with lower emissions is “carbon reduced.”
Green steel from scrap and other carbon-reduced steel products are available today – especially for long steel. Green steel from green hydrogen is at the pilot stage. Commercial uptake is expected in 2024/25. Scaling up volumes will take time, as this requires a) established steel producers to change their production processes or b) new entrants using new technologies (such as H2 Green Steel) to reach industrial production size.
Green steel from scrap and other carbon-reduced steel products can be purchased at industrial volumes from Kloeckner today. Thanks to key partnerships, we will be the first to sell >250,000 tons of green steel from hydrogen per year starting in 2025.
Studies and early pilot projects indicate that there will be a significant premium due to higher production costs and initial scarcity.
Right now, there is no single label or certification that allows a customer to claim that they are purchasing green steel. Some steel producers are starting to have their products certified as green, but these certifications differ and are hard to compare. We want to make this easier for customers, so we have developed a universal standard and label.
We are looking to help customers in three ways: 1. We help them gain a better understanding of the changing steel landscape and what this means for their organization. 2. We will enhance transparency for them by tracking emissions for our steel products including the entire supply chain. 3. Thanks to our long-term partnerships, we secure reliable volumes of hard-to-source green steel and other carbon-reduced steel products for them even in times of scarcity.
How much green steel will save in terms of emissions depends on the starting point. Presuming an average ton of flat steel from a blast furnace as the starting point, green steel can reduce Scope 1 and 2 emissions by up to ~95%. Carbon-reduced steel from an electric arc furnace achieves a 45% reduction, while scrap-based EAF steel reduces emissions by ~75%.
We do not require a minimum purchase. But the overall market volume and the amount we can procure will be less than the demand for green steel and other carbon-reduced steel products. The earlier you contact us, the better your chances of early access and larger quantities.
In the future, green steel and other carbon-reduced steel products are likely to be attainable on spot markets. For the former, this will take years as production is scaling up and planned volumes are being pre-purchased today. For both varieties, it will be tricky in the beginning to ensure that you are actually getting what you want.
We are working with our suppliers to provide transparency on the emission intensity of our carbon reduced steel products. We will validate this information and pass it on to our customers. We will disclose all emissions data from cradle to gate.
Avoiding and reducing emissions is a top priority for us. We have set ambitious SBTi*-certified reduction targets and are actually carbon neutral ourselves today. We use high-quality, certified compensation options to achieve this. Because as far as our planet is concerned, offsetting is not the same as actual emission reductions.
*Science Based Targets initiative, the leading certification of corporate decarbonization targets. It collaborates closely with the Carbon Disclosure Project and the GHG Protocol.
|1.5° path||Emission reduction path that leads to global warming of 1.5° Celsius compared to pre-industrial levels; the target of the Paris Agreement. |
|Abatement||Combination of avoidance, reduction and removal. The term is used only in “abatement curve.”|
|Blast furnace||The blast furnace is one of the two predominant production pathways for steel, especially in Europe and Asia. The emissions of a blast furnace are more than twice those of an electric arc furnace.|
|Breakthrough technologies||Technologies that produce low-carbon steel in a radically different way from the conventional blast furnace, DRI or EAF technology.|
|Climate-neutral/net-zero||State when a company’s activities have no net effect on the climate. This includes the removal from the atmosphere of residual GHG emissions that cannot be eliminated. Climate-neutral and net-zero are typically used interchangeably. Climate-neutral also takes into account regional or local bio-geophysical effects on the climate, although these do not exist for most companies.|
|Climate-positive||State when a company’s activities remove more GHGs from the atmosphere than they emit.|
|Corporate carbon footprint (CCF)||Carbon emissions of a company in a given year along the entire value chain.|
|Procurement of offsetting certificates for emission abatement elsewhere and the use of these certificates to reduce a company’s own carbon footprint. Offsetting cannot be deducted from the corporate carbon footprint but needs to be reported separately. It does not count towards the physical carbon reduction needed to comply with science-based targets.|
|Corporate social responsibility (CSR)||Integration of social and environmental concerns into the business operations of a company and its interactions with stakeholders.|
|Direct reduced iron||Direct reduced iron is produced from iron ore via direct reduction. A gas or an elemental carbon usually serves as a reductant. In the past, this has typically been natural gas or coal. In the future, it may be hydrogen.|
|Electric arc furnace||An electric arc furnace is one of the two predominant production pathways for steel. In the US, it is even more common than the blast furnace, which the chief pathway in Europe and Asia. The emissions of an electric arc furnace are around 45% less than those of a blast furnace.|
|Emissions||Short for “greenhouse gas emissions.”|
|Environmental/social/governance (ESG)||Non-financial factors in a company’s strategy and reporting, an increasing focus of investors when evaluating company performance.|
|Greenhouse gases (GHGs)||Greenhouse gases include CO2, CH4, N2O, HCFs, PFCs, SF6, NF3. All GHGs are converted into CO2 equivalents.|
|Greenhouse Gas Protocol||The GHG Protocol is the leading carbon accounting body and headed by the World Resources Institute. It closely collaborates with the Carbon Disclosure Project and the Science Based Targets initiative.|
|Greenwashing||The act of making false or misleading claims about the environmental benefits of a product, service, technology, etc.|
|Hydrogen||Through the use of new technologies, hydrogen is a key vector that will allow GHG emissions from the iron and steel sector to be significantly reduced.|
|Life-cycle assessment||Assessment of the environmental impact of a product during its entire life cycle.|
|Paris Accord||Legally binding international treaty signed in 2015 to limit global warming to well below 2, and preferably to 1.5° Celsius compared to pre-industrial levels. To achieve this, countries aim to make the world climate-neutral by mid-century.|
|Product carbon footprint||Carbon emissions of a product during its life cycle.|
|Reduction||The process of cutting emissions that are released into the atmosphere, i.e. through a process or activity that physically emits fewer or no greenhouse gases.|
|Removal||The process of physically removing or sequestering GHGs from the atmosphere as a result of a specific intervention, e.g. carbon capture and storage, or by growing forests.|
|SBTi||The Science Based Targets initiative. The leading certification of corporate decarbonization targets. It collaborates closely with the Carbon Disclosure Project and the GHG Protocol.|
|Scope 1||Direct emissions from a company’s own facilities and from company vehicles.|
|Scope 2||Indirect emissions from purchased electricity, steam, heating and cooling for a company’s own use.|
|Scope 3 Upstream||Indirect emissions caused in the supply chain (purchased goods and services, transportation and distribution, business travel, etc.).|
|Scope 3 Downstream||Indirect emissions resulting from the use of the products (incl. distribution, end-of-life, etc.).|
|Well below 2 degrees (WB2D/1.5°C) path||Emission reduction path that aims to limit global warming to well below 2 degrees Celsius compared to pre-industrial levels, as targeted in the Paris Agreement.|
|Zero-carbon steel||Steel produced without any carbon emissions at all. This is a very high bar, and it is difficult to conceive of a production technology that could achieve this in the short term.|
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