Despite being one of the most sustainably oriented countries in Europe (if not in the world), Finland is still looking at many years of work when it comes to limiting the country´s emissions, 7-9% of which originate from the steel sector. Even though many of the steel industry sustainability frontrunners are active in Finland, there is still a lot of space for improvement, Ms. Vuorinen says.
This brings us to a perfect explanation of why WWF Finland, part of the extensive international WWF network, chose to create a campaign specifically around the steel industry.
“It is common knowledge that our purpose is to help nature survive. At the present moment, we can see that climate change is the key reason why various ecosystems are suffering. Therefore, we have started looking at what is behind this,” Ms. Vuorinen explains. “The general perspective makes it difficult for people to see environmental NGOs like us working with certain industries, however, if we want to get to the bottom of the problem, we must seek the largest polluters, so for example, we must find where the emissions are coming from. This led us to the steel sector which is one of the most energy-intensive sectors and main drivers of climate change.”
To provide a more detailed background, in July 2023, the Science Based Targets initiative (SBTi)[1] published its new guidance for steel sector target setting. The new guidance is based on the science-based carbon budget of the 1.5°C threshold, in alignment with the ambitions of the Paris Agreement. WWF, one of the founders and partners of SBTi, is now trying to persuade the key stakeholders of the steel industry to commit to SBTi and provide guidance in line with the latest climate science.
“WWF Finland´s Ready for Green Steel campaign sent a signal to the market and the investors that swift changes are needed. High-quality guidance is out there, now we simply need to utilize it to reach the final goal, which is the actual emission reduction,” Ms. Vuorinen elucidated.
Companies are ready for green steel
Shortly after our interview, Ms. Vuorinen called to inform me of not one, but two new companies joining the campaign. The first to join were Cargotec, Enersense and YIT, quickly followed by the Purmo Group and Fingrid.
Looking at the list of participants, we can see that a wide range of industries has been covered, such as machinery, energy and construction. As shared by Ms. Vuorinen, the companies were eager to come forward and take part in the campaign.
“Not only were all the participants highly interested in decarbonisation of the steel industry from the start, but they were also intent on making the change now which is of utmost importance,” Ms. Vuorinen emphasized. She went on to add, “For some businesses, the cost of steel in the end product does not play that much of a role as for others. That is something we have noted when discussing the general goals with companies we are trying to engage.”
Key targets
As their website states, WWF´s campaign is about sending a strong message to steel producers worldwide. Ms. Vuorinen offered a more detailed explanation of what that entails. “There are two main stakeholder groups that we are engaging. One is the steel buyers and companies that mainly use steel as feedstock. The predictions are that the global steel demand will grow in the future; therefore, we are trying to persuade them to commit to increasing the share of low-emission green steel. The second group consists of financial institutions and investors. We hope that in the future these stakeholders will be willing to restrict their investments and financial services to steel companies that are aligned with SBTi guidance.”
She added that, for example, steel companies that are already using a lot of scrap need to prepare themselves to use more DRI because scrap is a limited resource. The operating environment, conditions and the current infrastructure in developing countries are such that these countries will need support from the more developed ones when it comes to renewables, scrap availability, etc.
There are some other crucial points that Ms. Vuorinen highlighted: “Nowadays, there is a lot of ´hype´ about hydrogen. Yes, we want to see hydrogen being used but not just any kind of hydrogen. Hopefully, accelerating investments will encourage the production and use of renewable hydrogen (see WWF´s Global Energy Policy Framework[2]). The same can be said for EAFs (electric arc furnaces). These are not magical solutions, but we need to ensure that the electricity that is used comes from sustainable resources.”
Circumstances call for swift transition
According to the recent report “A Matter of Ambition: Examining the Steel Industry’s Commitment to Net Zero by 2050”[3] published by the Global Energy Monitor (GEM) and the Leadership Group for Industry Transition (LeadIT) examining the top 50 steel producers that announced 2030 and 2050 climate targets, there is 2 ½ times as much new capacity built for blast furnaces compared to facilities intended for green steel production. Based on this, Ms. Vuorinen is certain that we are not on the right track. “The figures should be reversed. Unfortunately, the transition is very slow, therefore, accelerating the change by putting a stop to unsustainable financing is of utmost importance. Seventy percent of all blast furnace capacity has been estimated to reach its end during this decade. So, by 2030 we should have many investments made. We hope that the right decisions will be made,” she pointed out.
Transparency is yet another factor that she highlights as key. “I am slightly surprised at how slowly change is taking place and how little we know about the steel sector investment plans in some major steel-producing countries,” she stated.
While many think that the situation is not that severe, leaving us plenty of time to act, the reality points to a different conclusion. When asked about the situation in Finland, Ms. Vuorinen explained that while the impact of climate change on the livelihood of Finns is less severe than in many other countries, Finnish nature is already suffering from the rapid climate change in the Arctic regions.
Tackling crisis in a coherent way
The general feedback on the Ready for Green Steel campaign is positive. Many stakeholders are listening to the voice of reason and are willing to make the change while others are perhaps hoping to get a “free ride” as Ms. Vuorinen jokingly calls it. Nevertheless, the final verdict is such: decarbonisation is a process that needs to take place globally in a coherent way, meaning that everyone needs to do their part.
“Everyone can make a change. I often hear people claiming that as consumers they are not connected to the steel industry in any way. But when we think about our daily activities, we realize that steel is all around us. For instance, you cannot make a call to a friend without a cell tower made of steel. When preparing a meal, you use a pan made of steel. The same goes for the car you drive and many other everyday examples. There are different ways in which every one of us can make a small contribution so that together we can be the change,” Ms. Vuorinen stated, concluding our conversation.
[1] https://sciencebasedtargets.org/sectors/steel
[2] https://wwfint.awsassets.panda.org/downloads/wwf-global-energy-policy-framework_1.pdf
[3] https://globalenergymonitor.org/wp-content/uploads/2023/10/GEM-LeadIT_Top50-steel-producers-commitment-to-netzero.pdf
Main photo: naturepl.com / Paul Williams / WWF
