“Sustainable objectives have been high on Outokumpu’s agenda much earlier than the official movement kicked off. Owing to the fact that sustainability was always resonating with our values and was ever-present in our company’s vision, we are now reaping the rewards of our hard work,” Dr. Max Menzel stated and set the tone for the rest of the conversation.
Outokumpu’s track record confirms his statement: Outokumpu Circle Green®, their towards-zero stainless steel line has seen tremendous development since its launch in the summer of 2022 in terms of demand and customer interest.
What makes Circle Green special, as Dr. Menzel kindly shared, is the fact that it is produced in the same facilities that have been used from the beginning – the same cold rolling mills, furnaces and melt shop.
“What we put ‘into’ the process is the only part that has changed. We have a special raw material selection specifically for this product. In addition, reinventing our process, for instance, switching to biogas and biofuel enabled us to reduce the CO2 footprint of certain products by a minimum of 50% compared to our regular products which is a staggering 93% lower than the industry average in stainless steel,” Dr. Menzel explained.
Data availability
It is worth noting that Outokumpu’s methodology extends beyond offering mere numbers. “At the end of the day, sustainability is a data game because the material we are producing does not offer any unique properties such as higher strength or higher corrosion resistance. What has changed is the data we provide to the market. However, the most crucial factors for this are transparency and verification by independent sources,” he emphasized. “Here I would like to highlight that Outokumpu is the only stainless steel producer that provides the specific CO2 footprint on the delivery certificates for nearly all of its products in Europe. Our data is updated monthly, and we are witnessing a downward trend meaning that we are doing our homework on decarbonisation,” he pointed out.
He stated that even though unclarity may seem to rule the world of low-carbon steel, Outokumpu decided to take a different standpoint and make public scopes 1, 2 and 3, thus providing the necessary information for customers to make informed decisions. “From our perspective, green steel is already conquering the market. But we need to be extremely sharp on how to justify the
value of those products. This can only be successful if we provide credibility through accurate verified data which makes decarbonisation tangible and provides more than a nice marketing story. By putting transparency first, we continue to demonstrate our commitment to reducing emissions. Moreover, we do not employ mass balancing techniques which in general are very difficult to justify for credible decarbonised products,” he stressed.
“The latest milestone for Outokumpu was the validation by TÜV Süd according to DIN EN ISO 14067 that we received in November 2023. Being certified by such a well-known authority, especially in the European market, confirmed that we have achieved what was our primary mission from the start. And that is, giving as much credibility as possible to the CO2 figures of our products, which, of course, then enables us to have even higher ambitions and better green value propositions for the products that we have been putting on the market for some time now,” Dr. Menzel elucidated and continued, “Winning the Microsoft Intelligent Manufacturing Award for the product carbon footprint algorithm last year further confirmed that Outokumpu is truly setting a new standard for steel production.”
Partnership is power
In the beginning, Outokumpu received a lot of feedback from stakeholders who claimed that there is still some time to get involved with CO2-reduced materials. Nevertheless, their team remained undeterred in trying to find partners who believed the company was on the right track. Across various industries and countries, they have found partners who claimed they wanted to be part of the journey now, and not when the train has left the station, as Dr. Menzel phrased it.
“Cultivating strong partnerships with a diverse range of customers enabled our plans to come to fruition rather sooner than expected, something we are extremely pleased with. For instance, our recent partnership with Fissler supports our mutual mission to build things that last and to show the direction of reducing emissions from the appliance industry. The same can be said for our partnership with ZWILLING and Stahl Krebs, aimed at reducing the carbon footprint of knives. By collaborating with Siemens to decarbonise the production of medium-voltage
switchgear, we are supporting the green energy transition,” Dr. Menzel observed. So far, Outokumpu’s partnerships cover a wide range of industries: the automotive, heating and energy industries, steel processors and steel distributors, to name a few.
Inner Circle: creating value with circularity
Dr. Menzel described Outokumpu’s current achievement as very satisfying but targets stay ambitious. The goal is to grow the production and reach a yearly capacity of 100,000 tonnes rather soon. Among other raw materials, scrap or recirculated raw materials play a crucial role in the decarbonisation.
The Inner Circle is the latest commercial sustainability initiative launched by Outokumpu with the aim to foster circularity with both suppliers and customers. “As an electric arc furnace-based producer, we predominantly use scrap as raw material. With an industry-leading 94% recycled material content, Outokumpu is already at the centre of the circular economy. With the Inner Circle, our suppliers and customers are invited to actively participate in this circle. We do have six supplier partners that are now officially part of our Inner Circle network which enables our customers to actively provide their material waste to one of the Inner Circle members, which will find its way back into the European circular economy. Thus, closing the loop and making circularity tangible,” Dr. Menzel explained.
A team effort
Green transition is always a lengthy process. We have asked Dr. Menzel what the company owes its success to. At Outokumpu, they believe that sustainability and stainless steel go hand in hand, making this industry a unique ground to work on. “A stainless steel pot that was produced yesterday will most likely still be there in 100 years with the same properties it has today,” he commented.
That being said, he highlighted that Outokumpu’s team has been indispensable for the successful
implementation of the company’s goals and the market introduction of Circle Green.
“Of course, the beginning was not easy. Simply knowing that you have a good product is not enough, but it is of utmost importance to have the capability to transfer the message of what we are offering to our customers. Therefore, we focused on raising market awareness and educating our teams to be able to engage with various players along the value chain,” Dr. Menzel underlined.
Proud of the team and their journey so far, he went on to add: “One of Outokumpu’s key strengths lies in our team’s commitment and the undisputed belief that we are doing the right thing. With that, we were able to identify the right partners and prepare the market. I am convinced this is the main reason for our early success. Therefore, I would like to congratulate all my colleagues along the value chain. From procurement, through operations, supply chain, and marketing to sales and our partners on the customer side. It was a true team effort and we can only avoid climate change together.”
Such complex endeavours are as challenging as much as they are rewarding. Among other vital aspects, the general ESG (Environmental, Social and Governance) conformity must be closely supervised. At Outokumpu, ESG-relevant topics are integrated into the day-today activities. “Putting together crossfunctional teams that are able to assess the whole supply chain allowed us to execute and implement such complex initiatives. We ensure that our partners and suppliers also conform with our ESG criteria which can be even more important than the ultimate CO2 footprint,” Dr. Menzel stressed.
Acknowledging the value of a clean product
We are witnessing discussions about green steel premiums, which are required to cover the additional cost of pollutionfree production and respective investments. As Dr. Menzel explained, nothing comes just by itself, and to be able to decarbonise steel production, large investments are inevitable. As an EAF-based producer, Outokumpu avoided certain investment costs, such as the transition from blast furnaces to new technology. However, other challenges and investment needs are certain to go forward in decarbonisation. “Besides additional costs in production of CO2-reduced products, further decarbonisation of our regular production will not come by itself. Naturally, we are striving to decrease the footprint of our regular stainless steel offering. These reasons alone show why the green steel premium is inevitable,” he pointed out.
A true testament to success
As for any company embarking on its sustainable journey, being validated by the Science Based Targets initiative (SBTi) signified a crucial milestone for Outokumpu. With an approved 1.5 °C SBTi target in place since December 2021, the company’s trend of third-party verification did not end there.
Aside from the aforementioned TÜV Süd verification, Outokumpu has also received a Platinum level recognition from the sustainability rating platform EcoVadis in December 2023. The Platinum level rating indicates that Outokumpu is among the top 1% of the companies in the iron and steel manufacturing industry evaluated by EcoVadis.
