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A new platform launched by the Rocky Mountain Institute (RMI) could see a collective order of 2 million short tons of green steel from major companies, propelling the North American steel industry’s decarbonization push.
The first-of-its-kind procurement platform, called the Sustainable Steel Buyers Platform (SSBP), was unveiled by the clean energy think tank during Climate Week NYC on Wednesday September 20. It aims to consolidate demand for low-emissions steel toward an initial commercial-scale purchase in North America, according to RMI’s website.
The clean energy non-profit has launched a request for information (RFI) process open to all steelmakers to deliver sustainable steel to North America, which will take place throughout the remainder of this year, followed by a request for proposal (RFP) planned for first quarter next year.
“We have already had initial discussions with the major incumbent steelmakers in the US,” Chathu Gamage, principal at RMI said.
Gamage added: “We will start with gathering information from steel producers on potential projects, delivery timelines, transaction structures and emissions performance through the RFI process.”
Subsequently, the information would be used to develop the RFP to understand the premium that is associated with the steps needed to produce near-zero emissions steel. Moving forward, buyers will use that green premium as a basis for negotiating agreements with steel producers, Gamage said.
Major corporations – including tech mammoth Microsoft, solar-hardware producer Nextracker and real estate developer Trammell Crow Company – are teaming up to collectively purchase 2 million tons of near-zero emissions steel via RMI’s platform.
Near-zero emissions steel refers to steel produced using renewable electricity, clean hydrogen or potentially with carbon-capture technology, RMI said.
Decarbonization efforts in the US steel industry have been an ongoing focus among industry participants, with green steel demand expected to increase to 6.7 million tons annually by the end of this decade, RMI said.
“This is in part why we think now is the right time to launch this type of demand aggregation process that looks to provide a way for the companies to deliver on their commitments,” Gamage said.
However, with the push for decarbonization comes a myriad of standards and methodologies in the space, materializing the need for an alignment.
“During the SSBP RFP process, buyers will come together on a common definition of near-zero emissions steel that we hope can help to clarify some of the various standards and methodologies in the space,” Gamage said.
She added: “Buyers who want to make a material impact to their own Scope 3 emissions and use their purchasing power to drive the supply of near-zero emissions steel and the technology change this requires, can look to align purchases which have been or can be certified with a transparent and credible standard system, which is critically important to ensure true emissions reductions are being made in the sector.”
Alongside an increase in demand for green steel, there is a notable increase in demand for information on carbon intensity in steel products among buyers, which companies are starting to provide, Kevin Dempsey, American Iron and Steel Institute (AISI) president and chief executive officer, told Fastmarkets at the sidelines of the AISTech conference in May.
“Decarbonization is indeed achievable. Society’s already demanding decarbonization. Our customers are demanding clean and sustainably produced steels because their customers are demanding sustainably produced products,” Keith Howell, ArcelorMittal North America chief operating officer said at the conference. fastmarkets
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