If You Can’t Measure It, You Can’t Fix It.
The results of an historic scientific health check of the planet were unveiled during Climate Week 2024 in New York, indicating that Earth’s systems remain at risk. This was the first in a series of annual updates on the status of each planetary boundary. “By quantifying the boundaries for a healthy planet, we provide policy, economics and business with the tools needed to steer away from unmanageable risks," said Johan Rockström, PIK Director, Pioneer of the Planetary Boundaries Framework and Co-Founder of the Planetary Guardians.
As one of the most resource-intensive sectors, the steel industry sits at the nexus of these boundaries from carbon emissions and freshwater use to air emissions and resource consumption. Notably, iron and steel production accounts for around 8% of global greenhouse gas (GHG) emissions, making decarbonizing this sector a core focus in mitigating climate change. To align with global climate goals and achieve a net-zero energy system, the sector needs to reduce its emissions by at least 90% by 2050.
A Coordinated Approach to Accelerating the Low Carbon Steel Transition
Steel plays a pivotal strategic role across all economies and societies, and is the backbone for other sectors including manufacturing, infrastructure, transportation and the energy sector. It is also a critical input for building low carbon energy infrastructure, thereby serving as a core foundation for broader industrial decarbonization. According to worldsteel, the top ten steel producing companies produce close to 30% of global steel production, while China accounts for more than half of the world’s output.
Achieving net-zero targets by 2050 requires immediate and large-scale action. This is why over 50 organizations including steel companies and industry associations, standards bodies, civil society, and international organizations have united to align measurement methodologies – an essential step towards accelerating the industry’s transition with greater speed and scale.
The Steel Standards Principles were launched at the UN Climate Conference (COP28) in Dubai, UAE, to serve as a global guide for the rapidly expanding community of endorsing companies, organizations and standards bodies. Together they are developing tools for systemic change. Working together not only brings greater supply chain coordination by leveraging collective expertise and resources, but also drives more unified demand and investment to spur market growth and policy alignment.
Annual Meeting 2024: From Launch to Action
One year after its launch, the first Annual Meeting of the Steel Standards Principles took place in Villars, Switzerland, co-hosted by the Villars Institute, World Steel Association, and the World Trade Organization Secretariat.
Leaders from endorsing companies and organizations, as well as other partners, came together for a two-day working meeting to collaborate on actionable pathways across three thematic tracks: Interoperability and Recognition, Data and Emission Factors, SWOT Analysis and Planning for the UN Climate Conference in Baku (COP29).
Interoperability and Recognition: Interoperability refers to the ability of systems to work together seamlessly, while recognition involves accepting different approaches to achieving the same end goal.
- Interoperability: Different initiatives and countries or regions use varied standards for GHG emissions accounting from steel production, at the product, facility and company level. Developing approaches that allow for standardization and conversion of measurement criteria is essential for global consistency.
- Recognition: recognition criteria help ensure that standards are uniformly understood and accepted across different regions and organizations to facilitate cross-border trade and compliance.
- Conversion Tools: Looking ahead, creating tools to convert measurement standards and harmonize reporting practices can help address the challenges posed by varying national regulations and standards.
Data and Emission Factors: A holistic mapping exercise led by the World Steel Association is a global effort to assess the current landscape of the many different GHG-related methodologies and standards for the steel sector and to highlight areas where alignment would be beneficial. Approaches to advancing transparency on data quality and collection (e.g. disclosing the share of emissions calculated from primary data) and aligning on the source and use of emission factors were discussed.
SWOT Analysis and Planning for COP29: Before delving into a SWOT analysis to identify key strengths, weaknesses, opportunities, and threats to the delivery of the Principles, global influences such as the rise of low carbon hydrogen, digitalized and circular plants, along with the growing number of border carbon adjustments (BCAs)- either designed or adopted - were also factored in to the discussions. The community committed to developing a more inclusive narrative around the Steel Standards Principles on the road to COP29 as a critical step in the process of engaging critical stakeholders.
A number of important cross-cutting themes also emerged from the meeting including the importance of transparency and the establishment of robust verification systems as vital for promoting investment in near-zero emission technologies. Clear, consistent standards help build trust and reduce consumer confusion. Another key outcome from the Meeting was a shared commitment to developing a glossary of terms and definitions. This is an essential foundation for building a shared understanding of the indicators and goals, for standardizing practices and benchmarks, facilitating cross-industry collaboration, building trust with consumers and investors, and ensuring more accurate measuring and reporting.
Enabling Systems Change through the Green Steel Transition
Going forward, strengthening collaboration across stakeholders and galvanizing efforts to address the twin climate and biodiversity challenges in an integrated way will be key. This includes aligning the steel industry’s transformation with key events like climate COP29 in Baku, Azerbaijan, and the Biodiversity COP16 in Cali, Colombia. The steel industry’s transition cannot occur in isolation. The Steel Standards Principles community is a true example of why systems leadership is key for the transformation of any hard-to-abate sector. As nations strive to meet the targets for sustainable growth, steel remains at the heart of progress, driving advancements while shaping the future of global industries and society at large.
As an endorsing organization of these ambitious principles, the Villars Institute looks forward to facilitating the community’s continued journey as a critical driver in the transition to a more sustainable, resilient future.
