The Net-Zero Steel Pathway Methodology Project (NZSPMP)

The final report and recommendations for the Net Zero Steel Pathway Methodology Project (NZSPMP) were published on 26th July. The full report can be downloaded here and the full press release can be seen here.

The project was set up in response to the view of many steelmakers that while they were supportive of the value of ‘science based targets’ (SBTs) for decarbonisation in line with the achievement of the goals of the Paris Agreement, they were concerned that key aspects of the specific methodology for defining a science-based target as developed by the Science Based Targets Initiative (SBTi) needed to be refined to recognise the characteristics of the steel sector.

The project has been led by a steering group consisting of 4 steelmakers (ArcelorMittal, Tata Steel, BlueScope Steel and GFG Alliance) together with ResponsibleSteel and worldsteel. Another 11 steel companies, and the German steel association have taken part as members of the project’s technical working group. Civil society organisations were briefed on progress through the project’s stakeholder reference group. ResponsibleSteel has been responsible for the project’s management, on behalf of the steering group as a whole.

The final report makes a number of recommendations which will be considered by the SBTi as an input for the development of SBTi steel sector guidance, due to start later in 2021.

The project’s recommendations do not represent a ResponsibleSteel position. The ResponsibleSteel Secretariat did not have a mandate to agree a position on its members’ behalf, and the process was not designed with this in mind. We agree with Adair Turner, Chair of the Energy Transitions Commission, that the report is a significant step, not a final product. Work is now needed by all stakeholders to review the report’s recommendations, and to consider what it means for their own work in relation to reductions of the steel sector’s greenhouse gas (GHG) emissions.

For ResponsibleSteel the report is important for a number of reasons. Firstly, the current ResponsibleSteel Standard (v1-1) requires that the corporate owner of any ResponsibleSteel certified site must have, “defined and made public both a long-term emissions reduction pathway, and a medium-term, quantitative, science-based GHG emisions reduction target or set of targets for the corporation as a whole”. The standard requires that steelmakers make their projections in relation to the use of primary as well as recycled steel explicit, together with their assumptions about public policy. The NZSPMP’s recommendations are well aligned with this approach. The ResponsibleSteel standard already recognises SBTi validated targets as meeting some specific requirements. We hope that the report’s recommendations will help more steelmakers develop SBTi validated targets in future, and so facilitate their ResponsibleSteel certification.

Secondly, the report considers a number of the same issues that are also currently under discussion in the ongoing development of the ResponsibleSteel requirements for ‘steel certification’. The NZSPMP report is focussed on company level target setting, but the need for consistent scope boundaries, a consistent and transparent approach to upstream and downstream Scope 3 emissions, and to the allocation of emissions to co-products – these are all issues that will need to be addressed at site level through the ResponsibleSteel requirements for steel certification. Different stakeholders will have their own views on the specific recommendations for the NZSPMP report – you may agree with some and disagree with others. But whether you agree or disagree with the recommendations themselves, we hope you will agree that they are worthy of consideration and discussion.

“ResponsibleSteel welcomes the publication of this important work” says Anne-Claire Howard, CEO ResponsibleSteel. “Steel is critical to human development and the world economy – but the industry has to reduce its net GHG emissions to zero within the next 30 years. Every steel company needs to plan its own pathway to achieve this, and to do so urgently. We look forward to seeing the recommendations in this report leading to the rapid development of credible, practical, comparable net zero GHG emission company targets and pathways by steel makers. There is no time to waste.”