As mining and metallurgical operations are energy intensive and generate significant volumes of greenhouse gas emissions (GHGs), EVRAZ recognises its obligations in the area of climate change mitigation and understands that businesses must play an active role in finding solutions to prevent negative and irreversible impacts resulting from further rises in global average temperatures.
Climate-related issues are handled within the framework of EVRAZ HSE management structure, where:
- The Board of Directors deals with climate change corporate governance, goal setting, and risk management issues at its meetings. Monitoring climate risks and the opportunity management process and approving an appropriate level of risk appetite for the Group also fall under the remit of the Board of Directors, with the Audit Committee supporting these functions.
- Discussions of climate change-related issues take place at regular (twice a year) meetings of the HSE Committee, which determines an acceptable level of exposure to climate risks and assists the Board of Directors in overseeing the implementation of the Climate strategy, as part of the Environmental strategy.
- The CEO of EVRAZ has ultimate responsibility for climate risk management and ensures the effective organization of the climate risk management system.
- The elaboration of climate-related projects is carried out by the Working Group on Environmental strategy (at CEO level), which is made up of representatives from both production divisions and various directorates (financial, strategic, risk management, HSE).
- The Risk Management Working Group (at CEO level) is chiefly responsible for collecting climate risk identification and assessment results for all EVRAZ business processes, and also elaborates measures to reduce the impact of these risks on the Group as a whole.
- Responsibility among executive management for performing climate-related tasks is delegated based on respective matters and powers.
EVRAZ elaborates and adopts various measures to combat climate change and is guided by three core principles:
With a projected rise in global demand for high-quality steel, due to factors such as the development of the construction sector and urban transport infrastructure (including rail transport), EVRAZ sees great potential and opportunity for using the steel industry’s products to assist in transitioning to a low-carbon economy. As the world’s only full-cycle vanadium manufacturer, the Group considers its own vanadium products to be valuable materials for renewable energy generation (e.g. the application of vanadium alloys in the construction of wind turbines can increase their service life). Identifying opportunities to use the Group’s products for a low-carbon future enhances the long-term sustainability of the business model.
EVRAZ supports global initiatives to combat climate change, as well as national climate-related strategies in the countries where it operates. In compliance with the Companies Act 2006 (Strategic and Directors’ Report) Regulations 2013, the Group commenced annual measurements of GHG emissions at all its enterprises in 2013.
A substantial part of EVRAZ’s efforts to lower total and specific GHG emissions relates to energy and fuel consumed at the Group’s facilities. By implementing best practices and technologies, EVRAZ boosts energy efficiency and increases the use of renewable and secondary energy sources. The Group is working to reduce the carbon intensity of its energy sources and to raise its own power generation and self-sufficiency levels by recycling 100% of secondary energy resources generated at its metallurgical plants.
Since 2011 the Group has participated in the CDP Climate Change Programme and recorded a “D” score in 2020, even though the requirements of the CDP questionnaire became more stringent.
Another milestone for the Group in 2020 was joining the UN Global Compact initiative, which considers business as a force for good and drives companies’ awareness and actions in order to achieve Sustainable Development Goals by 2030. EVRAZ has made a voluntary commitment to work on implementing 10 universal sustainability principles, which will support the Group’s efforts to promote the transition to a low-carbon future. As a participant in the UN Global Compact, EVRAZ promotes a preventative approach to environmental challenges and greater environmental responsibility, and also carries out work to develop and implement green technologies, such as those that lower its GHG emissions.
EVRAZ’s commitment to lowering greenhouse gas emissions is reflected in its goals. The Group has set a target for the period 2018–2022 of maintaining specific Scope 1 and 2 GHG emissions from steel production (the Steel and North America segments) at below 2 tonnes of carbon dioxide equivalent per tonne of crude steel (tCO2e/tcs). This target was achieved in 2019, with a level of 1.97 tCO2e/tcs. In 2020 EVRAZ was able to meet the target, with the same value of 1.97 tCO2e/tcs.
In 2020 the Group improved and updated the Environmental strategy, which sets forth new and ambitious climate-related goals for up to 2030, using 2019 as a baseline year. Steps include:
- Reducing specific Scope 1 and 2 GHG emissions from EVRAZ’s Steel segments (the Steel and North America segments) by 20%, in compliance with the Paris Agreement. Work to meet this goal will involve implementing modernisation and energy efficiency measures, with energy efficiency projects being a core component of EVRAZ’s efforts to lower GHG emissions. In addition to energy efficiency initiatives, during the development of the Group’s Environmental strategy EVRAZ assessed several promising projects for switching to the best available technologies aimed at reducing GHG emissions, including the return of sinter gases to the sinter furnace and gas tank installation to recover converter gas and heat at oxygen converter shop no. 2. It is planned to adopt these technologies in the future as part of the implementation of the Environmental strategy up to 2030.
- Utilising 75% of methane (CH4) emitted in the process of degassing carried out during coal mining.
As above, EVRAZ discloses data in tCO2e (tonnes of carbon dioxide equivalent). EVRAZ estimates direct emissions (Scope 1) of all seven
In 2020, during the process of developing the new Environmental strategy’s goals, EVRAZ has taken initial steps in assessing its Scope 3 (indirect non-energy) emissions, and it plans to improve its approach to estimating total greenhouse gas emissions, including the methodology for calculating them, in 2021.
In 2020, nearly all of EVRAZ’s GHG emissions remained at the same level, rising by only 0.64% compared to 2019. There was also a 1.1% rise in the Group’s direct GHG emissions, whereas 2020 saw a 3.3% reduction in Scope 2 EVRAZ emissions. The latter was due to lower steel production at the Group’s North American assets, which have no integrated power plants and have to purchase electricity from the market, and a decrease in electricity purchases by Russian steel mills.
The growth in Scope 1 EVRAZ emissions was mainly attributable to an annual increase in methane emissions (by 5.4% vs. 2019), due to higher methane concentrations in the coal seams and more intense degassing at some mines.
As methane is combustible, the Group carries out preliminary degassing to improve employee safety. To improve efficiency in this regard, it is important to increase the volume of gas captured. This generates higher methane emissions, and to reduce these, EVRAZ plans to implement research and development projects on methane utilisation in 2021.
The Steel segment (incl. North America) continues to generate a significant portion of the Group’s gross GHG emissions, and accounted for 70% of the total GHG level in 2020. Operations in the Coal segment accounted for 30% of overall GHG emissions in 2020, almost all of which (94%) were methane emissions.
Overall emissions in the steel sector (the Steel and North America segments) were 1.0% lower than the 2019 level, mostly due to a slight decline in crude steel production, and hence the specific intensity of GHG emissions remains at the same level of 1.97 tCO2e/tcs.