In a significant development, key players from standard-setting bodies, international organizations, steel producers, and industry associations have united to endorse a set of principles aimed at revolutionizing the measurement of greenhouse gas emissions within the steel sector. The momentous partnership, known as the Steel Standards Principles, received a warm welcome from Director-General Ngozi Okonjo-Iweala on December 1st.
This groundbreaking initiative was unveiled during a roundtable discussion at the COP28 UN Climate Change Conference in Dubai, United Arab Emirates, organized by the Sustainable Markets Initiative and the WTO Secretariat. Director-General Okonjo-Iweala emphasized the importance of these principles in addressing fragmented and uncoordinated trade policies that hinder the steel industry's decarbonization efforts. Such policies create uncertainty for producers, obstruct the flow of green technologies and materials across borders, and impede investments in clean technology.
The Steel Standards Principles acknowledge the iron and steel sector's substantial contribution to global greenhouse gas emissions, accounting for roughly 8% of annual emissions. To play a credible role in achieving climate targets, these emissions must be reduced by at least 90%.
These principles call for the establishment of standardized methodologies to measure greenhouse gas emissions within the iron and steel sector. Such standardization aims to accelerate the transition toward near-zero emissions, fostering investment in innovative low-emission technologies and products. Additionally, it aims to alleviate trade frictions arising from conflicting and incompatible measurement standards.
The endorsement of the Steel Standards Principles has garnered significant support from more than 35 key stakeholders, including steel producers, industry associations, standard-setting bodies, international organizations, and initiatives. Annie Heaton, CEO of ResponsibleSteel, a multistakeholder standard and certification initiative, emphasized the need for a common framework to assess carbon emissions in the steel industry. Such a framework is essential for driving global industry decarbonization.
Nicola Davidson, Vice President for Sustainable Development and Corporate Communications at steel producer ArcelorMittal, highlighted the importance of the Principles in establishing broader alignment on defining low-carbon steel. She underlined the complexity of steel production, noting that different materials and technologies result in varying carbon footprints. Recognizing these distinctions is crucial, particularly as the transition to a net-zero carbon industry is expected to span several years.
The Steel Standards Principles recognize the necessity for collaborative and constructive dialogue among developed and developing economies, governments, producers, industry associations, and policymakers. Such dialogue is crucial for refining existing emissions standards in the steel sector.
These Principles build upon the International Energy Agency's "Net Zero Principles" for Emissions Measurement and Data Collection for a Net Zero Steel Industry. They also draw inspiration from the WTO's Technical Barriers to Trade (TBT) Agreement Code of Good Practice and the WTO TBT Committee's Six Principles for the Development of International Standards, Guides, and Recommendations.
