The importance of the cradle-to-gate perspective

Ovako has been working for many years to establish a true cradle-to-gate perspective of all the carbon dioxide emissions we are responsible for, both directly and indirectly. This has been a tremendous help in enabling us to benchmark our operations down to the finest details and to take responsible decisions in our purchasing. In this exercise we consider the footprint of all incoming goods and services as well as the full yield losses until the finished products are despatched from our factory gates. This is a particularly stringent way of looking at climate impacts and we have described our approach fully in a special technical report.

We have taken as the building block for this analysis hot-rolled bar. From that starting point, we have added calculation methods to establish the true cradle-to-gate footprint that includes all the individual product forms and alloy variations. In short, we are soon ready to provide, from all our operations, our customers with the exact information they need to establish the footprints for their own products.

The system we use is the International EPD® System ( https://www.environdec.com/). This is a global program for environmental product declarations (EPDs) based on ISO 14025 and EN 15804 and used by organizations in 48 countries. Recently, we updated our basic EPDs for hot-rolled bar and we are quite certain that we are now a global leader in this respect among all our peers in engineering steel. The individual declarations and the technical report can be found on our website (https://www.ovako.com/en/about-ovako/sustainability/environment/).

Our carbon dioxide ambitions for the future

To maintain and further develop Ovako's leading sustainability position, we will consider all upstream sources in a cradle to gate perspective and ensure that we make purchasing decisions with due consideration to sustainability. Furthermore, we will ensure a fact-based approach and detailed cradle-to-gate product declarations that include sustainability parameters for all our products, which will soon provide the same information for all delivery options. Looking further ahead, we aim to be involved in selected key projects for continued leadership in sustainability. We have set our targets to cover all the main aspects essential for leadership in sustainable steel: Carbon footprint, Product use phase and Recyclability.

To further develop our CO2e footprint cradle to gate, our targets are to:

• Reduce CO2e carbon footprint for hot-rolled bar, with 2015 as base:
  -60% by 2030
  -70% by 2040
• Reduce CO2e in operations scope 1&2 according to greenhouse gas (GHG) protocol, with 2015 as base:
  -80% by 2030
  -90% by 2040

Hydrogen for heating steel - a key initiative

With the cradle-to-gate approach, we take a holistic view on everything we can do to reduce our carbon footprint, including all incoming material and services. This includes evaluating our suppliers with regard to their carbon footprint. All of these many actions help us sustain and build further our leading position. One area is of special interest for us, and that is how we can drive electrification further in our processes. This is a topic dear to our hearts and Ovako has a proud history as a world pioneer in the electrification of rolling operations as far back as 1895. For this purpose, Ovako also built a special waterpower plant, which is still in operation – a beautiful building in a forest near our operations in Hofors, Sweden.

Now we are exploring how we can take the next major step. In our furnace landscape there is one large area remaining for electrification - we already melt steel in electric arc furnaces (EAFs) and most heat treatment processes are also now electric. The missing piece is how we heat steel for hot-working and we need to electrify this element. We have identified electrolysis of water to produce hydrogen and oxygen as a heating fuel as an approach that both directly and indirectly offers many positive climate contributions. If this approach works and sets a model for the rest of the world we are looking at hundreds of millions of tonnes in CO2 savings.

In Hofors, in March 2020, we used hydrogen to manufacture the world’s first fossil-free heated steel for hot-forming in actual operations. The results were very successful. And if we can raise the right financing our concept could also have important buffering effects on the electricity grid, down to frequency regulation level. It could also form part of a network of cost-efficient hydrogen stations for fuel cell powered vehicles.