AISI, SMA Cheer New EPA Chief as Steel Looks to Go Green

The United States’ two leading steel industry associations have cheered the Senate confirmation of Michael Regan, the new head of the Environmental Protection Agency.

The move comes as the U.S. steel industry increasingly looks to burnish its credentials as a green industry – and as the potential of a carbon-border tax boosts the economic viability of domestically produced pig iron.

Regan, previously secretary of the North Carolina Department of Environmental Quality, was confirmed as the new head of the EPA on March 11.

“We congratulate Michael Regan on his confirmation as EPA Administrator, and appreciate his distinguished background and commitment to innovation and technologies – like those that are made with steel – in reducing our nation’s carbon footprint,” American Iron and Steel Institute (AISI) President and CEO Kevin Dempsey said.

“We are encouraged by the new administrator’s commitment to caring for our shared environment as well as his demonstrated work in collaborating with stakeholders. The steel-producing members of AISI strongly share that commitment, as well as being part of the solution to addressing climate change,” Dempsey said.

The Steel Manufacturers Association (SMA), which represents electric-arc furnace (EAF) producers, sounded a similar note.

“American steelmakers make the most sustainable steel in the world with the lowest CO2 intensity of the major steel producing countries,” SMA President Philip K. Bell said.

Bell also said that EAF producers emit 75% less CO2 than traditional steelmaking via blast furnaces.

“The SMA looks forward to working with the new administrator and continuing our long-standing, positive relationship with the EPA,” he said.

Both integrated and EAF producers could have important roles to play in the future of the North American steel industry, especially as more nations move to reduce CO2 by taxing carbon emissions, CRU Senior Analysts Ryan Smith and Ryan McKinley wrote in a recent research note on steelmaking raw materials.

EAF steelmakers account for approximately 68% of U.S. steel output, and pig iron produced by domestic integrated mills will become an important part of EAF mills’ charge as they look to move up the value chain into higher end products – such as automotive steels – that require more virgin iron units. Smith and McKinley estimate that North American pig iron demand could grow by approximately one million tons by 2025 thanks to increasing domestic EAF steelmaking capacity.

Domestically produced pig iron will also become more attractive as prices for prime scrap rise along with EAF output not only in the U.S. but also in Europe and China, they said.

And U.S. EAFs could further lower their carbon footprint by using domestic pig iron. Sourcing locally would reduce the carbon emissions associated with ocean freight from traditional sources of imported pig iron such as Russia and Ukraine. Also, U.S. blast furnaces use more natural gas then furnaces abroad, which make heavier use of coal, another factor that could lower carbon emissions domestically, Smith and McKinley said.

The case for domestic pig iron would be made even stronger by a carbon border tariff, they said.

Smith will be discussing carbon emissions, carbon-free steelmaking and Environmental, Social and Governance (ESG) related issues at the next SMU Community Chat Webinar on Wednesday, March 17, at 3:30 p.m. EDT.

The SMU Community Chat Webinars are free to attend. Click here to register for the March 17 webinar. To see recordings of past webinars, see the SMU Community Chat tab on our homepage.

By Michael Cowden, Michael@SteelMarketUpdate.com