How can green growth be unlocked, and new opportunities discovered in green transition? What is the role of sustainable steel in decarbonizing critical industries?
This Q&A with Johann Steiner, Executive Vice President Sustainability, People and Strategy, was originally published by The Climate Group as part of Climate Week NYC 2024.
Over the past 11 years, Johann has been building and witnessing a remarkable transformation at Outokumpu – driving the industrial decarbonization forward with sustainable stainless steel. We were excited to hear his insights into the green transition and the pivotal role of sustainable steel in it.
One of the key themes of Climate Week NYC is how to speed up green growth. What do you see as the biggest challenges in driving this change?
There are four critical issues to tackle.
First, make clean energy stable and affordable. This is crucial for decarbonizing the hard-to-abate industries such as steel production.
Secondly, fund the green solutions. We need more long-term investments into, for instance, emission-free mobility, energy efficient housing and infrastructure as well as sustainable building materials, like pipelines for industry sites. The competitive and effective green technologies exist already. To scale them up, we need both private and public investments.
Third, implement global carbon pricing. This will make high-emission solutions more expensive than sustainable ones. Functional mechanisms like Carbon Boarder Adjustment Mechanism are a good start, but a global carbon pricing system is needed to accelerate the transition.
And lastly, incentivize the fast movers through regulation. Regulation can influence not only investments but also market demand, fueling, for instance, the demand for green steel.
So how do we open the floodgates for the investments necessary for green growth?
This is a great question! Most of the technologies we need for green growth already exist. But the question is: how to finance decarbonization and accelerate the demand for more sustainable solutions?
I’d stress three actions:
- Implementing strict sustainability criteria – this helps prioritizing green investments over cheap investments
- Regulation to support increasing market demand for sustainable solutions, such as green steel
- Providing infrastructure for clean energy – if you build the infrastructure for cheap and clean energy, investments into sustainable industry will follow
We also believe that companies will be required to provide data across the entire value chain so that the emissions of different solutions are reliably comparable, for both customers and investors. Outokumpu was the first in the industry to launch Product Carbon Footprint to its customers to demonstrate the value of low-emission stainless steel.
As part of the stainless-steel industry, your company must make significant changes to drive the green transition. What do you see as Outokumpu’s role in this area?
As a producer of sustainable stainless steel we have a dual role in the green transition – we are both part of the problem and part of the solution. There’s no doubt the steel industry is part of the problem, as it accounts for 10% of global greenhouse gas emissions. However, Outokumpu already has up to 75% lower carbon footprint compared to the industry average, and we drive the industry forward with an ambition to push down our emission intensity by 42% by 2030.
At the same time, stainless steel has a pivotal role in accelerating the low-carbon economies. Everything from critical infrastructure to renewable energy to electric vehicles and smarter buildings will need more stainless steel. It is estimated that the demand for low-emission steel will grow in low-carbon economies such as hydrogen and clean energy. So for us, it is not just about decarbonizing our operations but about collaborating with suppliers, distributors and customers.
The hard-to-abate industries account for one third of global greenhouse gas emissions. To decarbonize these industries, we need the entire value chain, from governments to private investors, companies and end-consumers to see the value of green transition, and to really demand it. It will not happen on its own: we need consistent effort and long-term investments.
What do you want to see accomplished at Climate Week NYC to push the change forward?
I’d really like to see the societal discussion depolarized towards common sense. Let’s move out of the corners, beyond an either–or juxtaposition. We are facing the biggest challenge of our time: climate change, but it also represents an opportunity for the forerunners to create value with the green transition.
It should not be about good versus bad, but about how we utilize the solutions we have at hand to achieve a smart green transition, as fast and as fairly as possible.
Here at Climate Week NYC, the Trans-Atlantic angle is especially crucial: how can European and US players act together to move green transition forward, unlock the long-term investments needed, push for equitable but forward-thinking regulation, and find the right alliances to enable green growth.
How do you see the age of protectionism and geopolitics affecting the green transition?
The era of strong globalization ended with COVID. Since then, we've seen a return to an age of geopolitics with nations adopting protectionist policies and tariffs, making geopolitical risks and security top priorities. The green transition itself has become central to global competition: this is known as green geopolitics.
So how to navigate this new world and accelerate the green transition across your value chain? We are very much looking forward to discussing the theme of green geopolitics further at Outokumpu’s panel at Climate Week NYC's The Hub Live on Monday, September 23, at 2 pm.