Cement Energy Environment

31 It is evident that to reach net zero, the world will need to set in train rapid and deep transitions in each of the sectors that contribute to global emissions starting from power and transport to shipping, aviation, and the mining which is in the roots of all these industries. We have a long way to go in a limited amount of time. Today’s early stage technologies will likely need to contribute almost half of the emissions reductions required to set the world on this path. To respond to the impact of climate change, mining companies must undertake the following five actions. • Perform an end-to-end diagnostic of climate change’s effects on the business. This will help in assessing the assets to protect from climate change and which stand to gain or lose from decarbonization. The physical risks of climate change, such as water stress, precipitation, heat, etc. must be evaluated at a localized, asset-specific level. Such analyses may require technical expertise from outside the organization, tailored to the company’s specific footprint and operations. Decarbonization scenarios should be built into demand forecasts for a company’s commodities, including accounting for at-scale renewables, metal recycling, and even metal-process- route shifts. Site-specific baseline emissions should be realized, and potential abatement levers evaluated. • Climate change, its risks and the opportunities, should be considered a board-level discussion, given its systemic, long-term, and potentially dramatic impact. • Focus on operational transformation, investments, and innovation. Several points of no-regrets energy- efficiency moves can often be found at mines, and climate targets can focus efforts to unearth them. Shifting to renewables can offer benefits, such as lower electricity costs and reduced volatility. Bolder investments, such as reimagining processes to account for shifting water demand and embarking on a decarbonization plan using both existing technologies and promising new alternatives—may also be made. • Evaluate and potentially reshape your portfolio. Climate change introduces unpredictability, requiring “climate intelligence” to be embedded in decision-making processes, such as capital allocation. • Continue to engage through reporting, partnerships, and other proactive measures. However, these actions are too modest to reach the 1.5°C to 2.0°C scenario and may not be able to keep up with society’s expectations—as increasingly voiced by investors seeking disclosures, companies asking their suppliers to decarbonize, and communities advocating for action on environmental issues. Mining companies concerned about their long-term reputation, “license to operate,” or contribution to decarbonization efforts may start to consider more aggressive decarbonisation and resilience plans. In the efforts for net zero targets, mining companies may see demand rapidly decline, new technologies supporting decarbonization efforts, including wind turbines, solar photovoltaics, electric vehicles and energy storage, will increase demand for other mining materials. Some miners are well placed to access new green-focused sources of capital; however, the pressure is on miners to prove they are running their business with limited environmental impact. Conclusion • The Smart Carbon route is centred around modifying the blast furnace route to create carbon neutral steelmaking through the use of circular carbon. The Company has outlined the policy framework environment, believes that is required for carbon-neutral steelmaking to become a reality, which includes • A global level playing field which avoids the risk of carbon leakage through mechanisms such as green border adjustments • Access to abundant and affordable clean energy • Policies which support the development of the necessary clean energy infrastructure • Access to sustainable finance for low-emissions steelmaking, and • Policies which accelerate the transition to a circular economy. The group is a member of the Energy Transitions Commission (ETC) and is an active member of the ETC’s Net Zero Steel Initiative underway in partnership with the World Economic Forum. ArcelorMittal is also actively engaged with the Science Based Targets Initiative (SBTI) to define an achievable SBT for the steel industry taking into account the two distinct routes in operation today. In its Climate Action Report and Europe Climate Action Report, ArcelorMittal refers to three clean energy vectors: clean electricity, circular carbon, and CCS.