On April 21, 2021, U.S. Steel (X) made a bold commitment.
The company, which was at one time the largest steel producer in the world, set a goal to be carbon neutral by 2050.
'A Global Crisis'
In making the announcement, David Burritt, company president and CEO, described climate change as “the challenge of this generation.”
“Climate change is a global crisis that requires a global response,” he said in a statement. “With our 120-year history of innovating to solve any challenge, U. S. Steel intends to be a part of the climate solution.”
U.S. Steel’s history goes back to a time when there was no talk of climate change or sustainability.
The company was formed in 1901 by business legends J.P. Morgan, Andrew Carnegie, Elbert H. Gary, and William Henry "Judge" Moore. Carnegie Steel executive Charles M. Schwab was the company’s first president.
In its first full year of operation, U.S. Steel, the world's first billion-dollar corporation, made 67% of all the steel produced in the United States.
A Changing World
The company supplied steel for such iconic structures as the United Nations building, the New Orleans Superdome, the Verrazano Narrows Bridge, the Willis Tower and Hancock Tower in Chicago, and the Unisphere sculpture for the 1965 New York World’s Fair.
"From the first skyscrapers to schools, hospitals and other buildings, to the roads, bridges and rail lines that connect us all, our history—our products and the people who made them—is as embedded in American life as any company operating today," the company said on its website.
The company became a part of Americans' lives, sponsoring “The United States Steel Hour,” which brought hour-long dramas to television from 1953 to 1963 featuring the work of such writers as Ira Levin and Rod Serling and performances by actors such as James Dean, Rex Harrison, and Paul Newman.
But the world was changing and the steel industry and heavy manufacturing went through a major restructuring.
On July 2, 2014, U.S. Steel was removed from S&P 500 index and placed in the S&P MidCap 400 Index due to declining market capitalization.
Now in the 21st Century, the steel industry is faced with the challenge of reducing its carbon footprint.
The World Steel Association estimates that the industry accounts for 7-9% of total global carbon emissions, according to an April 25 report by Barclay’s, second only to power generation as a source of CO2.
'A Vital Industrial Metal'
“Steel is a vital industrial metal, widely used in energy, construction, transportation, infrastructure, packaging and machinery,” the report said. “But producers need to get a lot greener if the world is to deliver on its ambitious net zero targets.”
Steel accounts for about one-third of supply-chain emissions for cars and buildings, and around half for white goods, or larger electrical devices such as refrigerators and washing machines, and renewable energy equipment.
"But decarbonising the sector is far from easy, given the lack of commercially viable alternatives to coal," the report said.
Government grants and subsidies will be needed to encourage investment, especially in China, the Barclays' study said, which produced more than half of the world’s steel in 2021. In more mature markets, returns to shareholders are likely to fall, as producers fund projects from their cash flows.
“But there is a real urgency to act, given the industry’s long lead times for development,’ the report said. "Blast furnaces tend to have an average life of around 40 years but need significant upgrades after 25. Decisions need to be taken now if companies want to meet their 2050 emissions targets.”
Sustainable Steelmaking
Burritt spoke about sustainability on July 29 during the company’s second-quarter earnings call, where U.S. Steel beat Wall Street’s earnings and sales estimates.
“The United States remains the leader in sustainable steelmaking as many in our industry have embraced the electrification of the steelmaking process, which is the most sustainable way to make steel,” he said, according to a transcript of the call.
Burritt said the company’s greenhouse gas emissions intensity, which is used to derive estimates of air pollutant or greenhouse gas emissions based on the amount of fuel combusted, has been reduced by 16% since 2018, and U.S. Steel is well positioned to reach its 2030 target of 20% reduction in GHG emissions intensity.
In February, U.S. Steel broke ground on a $3 billion steel mill in Osceola, Arkansas, which Burritt said will be “the most technologically advanced mini-mill on the planet” when it is completed in 2024.
And on Aug. 16, U.S. Steel, Equinor US Holdings (EQNR) and Shell US Gas & Power (RYDAF) said they had agreed to advance a collaborative clean energy hub in the Ohio, West Virginia, Pennsylvania region.
“Successfully addressing the climate crisis requires public and private collaborations,” said Richard Fruehauf, U. S. Steel’s Chief Strategy & Sustainability Officer. “We cannot —and will not —stand still, and this agreement is another effort to advance profitable, sustainable steel solutions for people and the planet.”
