Steel is vital to our ability to live more sustainably. It plays a major role in the construction of renewable energy solutions like solar panels and wind turbines (up to 79% of which are made from the metal)¹. And it will form the electric vehicles that will help us reach a lower-carbon transport future.

However, there is still some way to go for steel to be a sustainable material. In fact, each ton of steel produced today emits on average 1.4 tons of CO₂ ². This leaves the metals industry facing a tricky paradox to resolve. How can businesses drive growth and meet their sustainability goals?

For Mario Viarengo, Global Industry Marketing General Manager, Shell Lubricant Solutions, the challenge is clear. “Our society, and our economy, need steel, but we must also find ways to reduce its carbon footprint,” he explains. “So, how do industry leaders balance the two? How do they grapple with the conflicting need to increase output while reducing environmental impact?”

These are big questions for metals leaders to answer, but Viarengo does not see productivity and sustainability as competing aims. This perspective is backed up by the fact that an estimated 14% of steel industry companies’ potential value is at risk if they cannot decrease their environmental impact³.

“This would suggest that sustainability and productivity do not have to be mutually exclusive goals. Instead, they might actually be dependent on each other for success,” says Viarengo. “Perhaps steel businesses do not have to think about these issues separately. Perhaps they are not facing the paradox they initially thought they were.”

4 practical ways for steelmakers to operate more efficiently

To make steel more sustainable, businesses need to adapt their operations to run more efficiently. So, here are 4 steps they can take to increase output while improving their impact on the environment:

Steel production still relies on coal for 75% of its energy demand⁴. It is a situation that needs to change if the industry is to meet its sustainability goals – and renewables will be vital in moving away from power derived from fossil fuels.

“Moving your operations towards renewable energy sources like solar, or cleaner alternatives like hydrogen can make a world of difference to business efficiency,” says Viarengo. “I’ve seen this first-hand, with more than 50% of the electricity used in Shell’s Lubricant Blending Plants now coming from renewable sources⁵. Meanwhile, energy monitoring systems are helping our facilities to become even more energy efficient.”

No one company can do everything alone. The energy transition makes collaboration between businesses and across industries essential. And leaders need to forge the right partnerships to help them deliver on the potential of sustainable growth.

“The right expertise is out there; businesses often just don’t know where to find it,” says Viarengo. “Ironically, sometimes it’s right in front of you. For example, rather than simply providing the oil that can help reduce downtime, at Shell we have additional services available that can also help customers uncover hidden opportunities they had not previously spotted.”

“We have helped one of the world’s largest steel companies save more than $228,000 by using oil condition monitoring to uncover two separate, hidden issues with their equipment,” he explains. “We have also supported a wire rod business in China save more than $1 million a year through increased production, reduced maintenance costs, and by cutting oil and filter consumption.” ⁶

Footnotes

¹ _{US Geological Survey. “What materials are used to make wind turbines?” usgs.gov. N.D.}

² _{International Energy Agency. “Iron and Steel Technology Roadmap.” IEA.org. October, 2020.}

³ _{Hoffman, Christian, Michel Van Hoey and Benedikt Zeumer. “Decarbonization challenge for steel.” Mckinsey & Company. 03 June, 2020.}

⁴ _{International Energy Agency. “Iron and Steel Tracking Report.” IEA.org. November, 2021.}

⁵ _{Including renewable electricity contracts. Based on Shell internal data.}

⁶ _{Shell. “Reducing downtime in the Metals Sector”. Shell.com.}

^*_{”Carbon neutral” indicates that Shell has engaged in a transaction where an amount of CO₂ equivalent to the CO₂e amount associated with the raw material extraction, transport, production, distribution, usage and end-of-life of the Lubricants has been avoided as emissions through the protection of natural ecosystems or removed from the atmosphere through a nature-based process. CO₂e (CO₂ equivalent) refers to CO₂, CH₄, N₂O}