Severstal Confirms That Its Cherepovets Steel Mill Energy Strategy Will Significantly Reduce Scope 2 Emissions

 PAO Severstal, one of the world's leading vertically integrated steel and mining companies, a Metal-Expo regular exhibitor, has completed the development of a detailed energy efficiency strategy which will help the Company to increase its own energy generation and reduce Scope 2 emissions.

Reducing Severstal’s overall consumption of natural gas, gas flaring and the purchase of third-party electricity is part of Severstal’s strategy to meet its GHG reduction targets announced in July 2020. The measures set out under Cherepovets Steel Mill’s energy efficiency strategy are designed to increase Severstal’s consumption of internally produced electricity, thereby increasing energy efficiency and reducing purchases of electricity from external sources. These measures will enable Cherepovets Steel Mill to obtain 95% of its electricity consumption from Severstal’s own sources by 2023. Progress has already been made: at the end of 2020, the Mill’s internal electricity consumption increased to 80.9% compared to 78% in 2019. Cherepovets Steel Mill consumes 5.9 billion kWh of electricity per year. Following the implementation of the investment programme at Cherepovets Steel Mill, the Company expects to increase its utilization of secondary gases for electricity production by more than 20%.

The Cherepovets Steel Mill investment plan is at various stages of implementation. A number of measures aimed at optimizing energy consumption, particularly in Cherepovets Steel Mill’s pumping and compressor facilities, will also aim to reduce emissions intensity. These projects are part of a larger programme of retrofitting at the Cherepovets Steel Mill power plant. In addition, the power plant will increase annual electricity generation to 5,486 million kW by utilising industrial gases which are by-products from Severstal’s coke and blast furnaces. This is aligned to the Company’s longer-term strategy to utilize secondary energy resources for additional power generation.

Alexander Shevelev, CEO of Severstal, commented:

"Cherepovets Steel Mill has developed a strategy which will enable production to increase without purchasing additional electricity, while concurrently allowing us to achieve our environmental targets. This will bring economic and environmental benefits - reaching 95 percent internal electricity consumption will result in 2.7 billion rubles of cost savings per year and greenhouse gas emissions will be reduced by more than 270 thousand tons of CO2 per year. Moreover, by achieving the Company's near term goal of 3% emissions intensity reduction we will reduce our pollutant emissions by up to 12,000 tons per year. Our focus on increasing electricity generation from secondary resources is aligned UN Sustainable Development Goals 7 and 12: "affordable and clean energy", "responsible consumption and production".

In 2020 and 2021, Cherepovets Steel Mill produced its first products at the new units - blast furnace No. 3 and the first unit of the coke oven battery complex No. 11. In the near future, arc steelmaking furnace No. 1 will also be put into operation. Additional production capacity naturally requires an increase in electricity consumption, but the company's energy efficiency strategy will help to meet increased demand, and the energy required for the operation of new steel production units is planned to be provided by the utilization of secondary energy resources.

Severstal’s climate change targets:

By 2023, to reduce GHG emissions intensity by 3% compared with 2020,

By 2025, to reduce total atmospheric emission of pollutants by 13%.