Partnership to reduce steel industry CO2 emissions

Rio Tinto

MINING giant Rio Tinto has signed a memorandum of understanding (MoU) with China’s largest steel producer Baowu, and Tsinghua University, China to work together to reduce carbon emissions and improve environmental performance across the entire steel value chain.

According to the World Steel Association, an average of 1.83t of CO₂ was emitted per ton of steel produced in 2017. Additionally, it says the steel industry generates 7–9% of direct emissions from the global use of fossil fuels.

The MoU will enable Rio Tinto, China Baowu Steel Group, and Tsinghua to form a joint working group which will identify a pathway to support the goal of reducing carbon emissions from the steel value chain.

The working group is to establish an action plan on how best to use the partners’ complementary strengths in “research and development, technologies, process, equipment, logistics, industry collaboration, and policy advisory capabilities” to achieve their goals.

Chen Derong, Chairman of China Baowu Steel Group, said: “China Baowu is committed to ecological and sustainable development. We will promote sustainable production through intelligent manufacturing. We want to make a difference to the iron and steel ecosystem by developing greener factories and enterprises to deliver a cleaner, more sustainable steel industry. China Baowu looks forward to exploring low-carbon metallurgical innovation with Rio Tinto and Tsinghua University, and building a low-carbon industrial value chain. We hope to jointly address climate challenges with our partners and create a model of harmonious coexistence between cities and steel mills.”

According to the Financial Times, the world’s largest companies are under pressure to reduce emissions from their products to help decarbonise industrial supply chains.

The signing of the MoU comes after Rio Tinto rejected a proposal by climate activists to set targets for “scope 3” emissions claiming it was unworkable, the Financial Times reported in March. Scope 3 emissions are all indirect emissions that occur in a company’s value chain, including upstream and downstream emissions. Reportedly, Rio Tinto Chairman Simon Thomas said the company’s scope 3 emissions were primarily produced by its customers, “mainly steelmakers in China, over which we have very limited control”.

You Zheng, VP of Tsinghua University, said: “Tsinghua is committed to providing solutions to climate change challenges and contributing wisdom to sustainable development […] The signing will enable us to work closely with the upstream and downstream of the steel industry value chain to jointly find the solution to the industry’s low-carbon transformation.”

Jean-Sébastien Jacques, Chief Executive of Rio Tinto, said: “This pioneering partnership across the steel value chain will bring together solutions to help address the steel industry's carbon footprint and improve its environmental performance.

“The materials we produce have an important role to play in the transition to a low carbon future and we are committed to partnering with our customers and others to find the most sustainable ways to produce, process and market them. We are already doing this in aluminium and now, through this partnership, we will be doing it in the steel industry.”

In 2018, Rio Tinto announced a pioneering new technology partnership with Alcoa, supported by Apple and the Governments of Canada and Quebec, to further develop industry-first carbon-free aluminium smelting technology.

Earlier this year, mining rival BHP announced a US$400m investment to reduce emissions from BHP’s own operations, as well as from the use of its resources.