Gerdau will reduce greenhouse gas emissions to less than 50% of the global steel industry average by 2031

SÃO PAULO, Feb. 1, 2022 /PRNewswire/ -- Gerdau, the largest Brazilian steel producer, announced today (1) that it has undertaken to reduce its greenhouse gas emissions from its Scope 1 and 2 inventories to a value lower than 50% of the global average for the steel industry. Currently, the company has one of the lowest average emissions of greenhouse gases (CO₂e), of 0.93 t of CO₂e per ton of steel, which represents approximately half of the global average of the sector, of 1.89 t of CO₂e per ton of steel, according to 2020 data released by the World Steel Association (world steel). In 2031, Gerdau's carbon emissions will decrease to 0.83 t of CO₂e per ton of steel.

In order to reduce greenhouse gas emissions over the next ten years, Gerdau will expand the use of ferrous scrap as a raw material for steel production, increase its forest area, responsible for the production of charcoal, which works as a bio-reducer in the manufacture of pig iron, and increase the use of renewable energy, such as the solar parks already announced in Brazil and the United States. The company will also invest in initiatives of greater energy and operational efficiency at its units, in new technologies and open innovation.

"Since its foundation, 121 years ago, Gerdau has operated with a sustainable production mix, mainly based on scrap recycling and bio-reducer, which has always placed it among the companies with the lowest greenhouse gas emissions in the steel industry globally. We believe that we need to be leaders in the search for innovative solutions and disruptions to the planet's decarbonization process, helping to shape the future of such an essential sector, such as steel, in an increasingly sustainable way. By reaching the proposed target for 2031, we will take an important step towards our ambition to be carbon neutral in 2050, even though we know that neutrality in the steel industry is still not feasible today. But we want to be part of this solution", says Gustavo Werneck, Gerdau's CEO.

Gerdau is also announcing its ambition to achieve carbon neutrality by 2050. The company emphasizes that carbon neutrality requires mature technologies, which do not yet exist on an industrial scale, and public policies that enable the global steel industry to neutralize its carbon emissions. In this sense, the company actively participates in collaboration with sectoral entities, universities and research centers in the search for disruptive technologies for the production of steel and encourages dialogue and joint work with various actors in society for the implementation of initiatives, such as access to differentiated local, national or transactional credit lines, from public or private sources. These credit lines will be essential due to the high investment values necessary for developing disruptive technologies so that steel can be produced with low emissions of greenhouse gases.

In addition, Gerdau understands that carbon neutrality is also linked to improving its production processes and investments in new sources of clean and renewable energy. The company has already taken the first steps in this direction, with the announcement of solar parks in Minas Gerais and the installation of a photovoltaic park in Midlothian, Texas (United States). Both initiatives aim to supply clean energy to Gerdau's steel production units.

Since 2021, Gerdau started to link sustainability indicators, including greenhouse gas emissions, to the goals of the long-term bonuses of senior management. Since last year, 20% of the Long-Term Incentive Plan (ILP), which remunerates executives through company shares, is calculated based on CO₂e emissions and the percentage of women in leadership positions to reinforce a work environment committed to the evolution of sustainability issues and take environmental, social and governance matters even further to the center of the steel producer's strategic decision-making.

Differentiated emissions

Gerdau's production mix, whose steel production is approximately 80% based on the use of recycled and renewable sources, allows the company to have a prominent position in the steel industry. Today, 73% of the steel produced by the company comes from the recycling of ferrous scrap, making it the largest recycler in Latin America, with 11 million tons of scrap transformed into steel annually. Steel is an infinitely recyclable material, and for every ton of scrap recycled, the emission of 1.5 tons of CO₂e is avoided.

In addition, Gerdau is the world's largest producer of charcoal for steel production. It has 250 thousand hectares of forest base in Minas Gerais. Planted forests are raw materials from a renewable source for charcoal, which works as a bio-reducer in the manufacture of pig iron, which produces steel with a lower intensity of greenhouse gases.

"Steel is an essential and irreplaceable material, infinitely and 100% recyclable, which is in the lives of millions of people at different times or places in their routines, in the homes where they live and in the means of transport they use. Steel is present in new energy production technologies, as input for solar panels and wind towers, and in new infrastructure solutions, being, therefore, a crucial material for the decarbonization process of the world", concludes Werneck.

To learn more about Gerdau's commitments to climate change, visit: www2.gerdau.com.br/clima    

To learn more about our Environmental Management, visit: https://ri.gerdau.com/

To learn more about Gerdau's sustainability initiatives, visit: www2.gerdau.com.br/relatorio-anual-2020  

SOURCE Gerdau