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Industry as a partner forsustainable development

International Iron and Steel Institute (IISI)

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This report is released by the International Iron and Steel Institute (IISI) and the United NationsEnvironment Programme. Unless otherwise stated, all the interpretation and findings set forth in thispublication are those of the International Iron and Steel Institute (IISI).

The designations employed and the presentation of the material in this publication do not imply theexpression of any opinion whatsoever on the part of the International Iron and Steel Institute (IISI)or the United Nations Environment Programme concerning the legal status of any country,territory, city or area or of its authorities, or concerning delimitation of its frontiers or boundaries.The contents of this volume do not necessarily reflect the views or policies of the United NationsEnvironment Programme, nor does citing of trade names or commercial processes constituteendorsement.

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First published in the United Kingdom in 2002.

Copyright © 2002 International Iron and Steel Institute andUnited Nations Environment Programme

ISBN: 92-807-2187-9

1

A report prepared by:International Iron and Steel InstituteRue Colonel Bourg, 120B-1140 BrusselsBelgium

Tel: +32 2 702 8900Fax: +32 2 702 8899E-mail: info@iisi.beWeb site: http://www.worldsteel.org

DisclaimerIn a multi-stakeholder consultation facilitated by the United Nations Environment Programme, anumber of groups (including representatives from non-governmental organisations, labour unions,research institutes and national governments) provided comments on a preliminary draft of thisreport prepared by the International Iron and Steel Institute (IISI). The report was then revised,benefiting from stakeholder perspectives and input. The views expressed in the report remainthose of the authors, and do not necessarily reflect the views of the United Nations EnvironmentProgramme or the individuals and organisations that participated in the consultation.

Iron and Steel

Industry as a partner for sustainable development

2 Iron and Steel

Contents 3

5 Executive summary

9 Part I: Introduction9 1.1 The world steel industry10 1.2 Commitment to sustainable development11 1.3 About this report11 1.4 About IISI

13 Part 2: Implementation of the three dimensions of sustainable development13 2.1 Social dimension17 2.2 Economic dimension21 2.3 Environmental dimension

41 Part 3: Means of implementation41 3.1 Strategies43 3.2 Measures

51 Part 4: Future challenges and goals51 4.1 Priorities for improvement and future work programme

52 Annexe 1: IISI policy statement on environmental principles54 Annexe 2: IISI policy statement on climate change55 Annexe 3: IISI policy statement on Life Cycle Assessment

Contents

List of tables:16 Table 1: Statistics for the city of Pohang, South Korea, from 1968 and 199919 Table 2: Major steel producing and consuming countries in million tonnes, 200022 Table 3: Benefits of breakthrough technologies in steel products34 Table 4: Intake water requirements for a four million T/y crude steel integrated works38 Table 5: Range of yields for processes and products45 Table 6: LCI results of 1kg of hot rolled steel coil (global average)46 Table 7: LCI results for 1kg of rebar/wire rod/engineering steel (global average)49 Table 8: Apparent steel consumption per capita for selected countries50 Table 9: Revenue and income for the top steel producing companies

List of figures:9 Figure 1: Estimated value of selected materials in 200010 Figure 2: Steel shipments by market classification for North America in 199916 Figure 3: Employment in the steel industry, 1974 and 200017 Figure 4: Composite steel price in constant 1998 USD18 Figure 5:World trade in steel as a percentage of world crude steel production20 Figure 6:World crude steel production and apparent consumption, 1990 to 199928 Figure 7: Shaped steel beverage can28 Figure 8: Mass of a 33cl steel beverage can30 Figure 9: Process flow diagram for steel production using the blast furnace route31 Figure 10: Process flow diagram for steel production using the electric arc furnace route32 Figure 11: Share of the world crude steel production by process technology47 Figure 12:Total recordable injuries for all American Iron and Steel Institute reporting

steel companies

4 Contents

Executive summary 5

The International Iron and Steel Institute (IISI)prepared this report to communicatesustainable development activities of the worldsteel industry in preparation for the UnitedNations World Summit on SustainableDevelopment scheduled for Johannesburg,South Africa.This report forms part of aneffort coordinated by the United NationsEnvironment Programme, Department ofTechnology, Industry, and Economics, tocontribute to the World Summit with a seriesof sectoral reports whereby internationalsectoral industry organisations take stock ofprogress towards sustainable development andoutline future challenges. Additional andupdated information on sustainabledevelopment in the world steel industry willbe available through the IISI Web site athttp://www.worldsteel.org.

Steel is a material used to build thefoundations of society. It is an iron-basedmaterial containing low amounts of carbonand alloying elements that can be made intothousands of compositions with exactingproperties to meet a wide range of needs.Steel is truly a versatile material.The value ofsteel produced annually is easily over USD200 billion.Thus steel finds its way intothe world economy.

Steel is an essential material for society and anessential material for sustainable developmentfor people to satisfy their needs andaspirations. Steel is a part of people’s everydaylives, in both the developed and developingworld. It is used in providing transportationsuch as automobiles and railroads, buildingshelters from small housing to large multi-family dwellings, delivering energy such aselectricity and natural gas, producing food withtools like tractors and hoes, supplying waterwith pumps and pipelines, and enablinghealthcare with medical equipment.

Steel is produced worldwide. Over 96% ofworld steel production in 2000 was producedin 36 countries. China was the largest steelproducing country in 2000 with 127.2 milliontonnes.Two other nations produced over 100 million tonnes of steel in 2000 – Japan at106.4 million tonnes and the United States at101.5 million tonnes.Together, these threenations account for almost 40% of world steelproduction. If consideration is extended to thetop ten steel producing nations, just over 70%of world steel production is accounted for.Thetop 20 steel producing nations producedalmost 87% of the world’s steel in 2000.

While China is the world’s largest producer ofsteel, it is also the world’s largest consumer ofsteel with an apparent consumption of 141.2 million tonnes.The United States ranksas the second largest consumer of steel at115.0 million tonnes, followed by Japan at 76.1 million tonnes.The top ten nationsaccounted for almost 69% of steelconsumption in 2000, while the top 20 nationsmade up 83% of world steel consumption.

Looking at the trends in steel consumption,China shows the greatest increase from 1990to 2000 with in increase of almost 10%. Othercountries in Asia accounted for the secondlargest increase with 5.7%, while the NAFTAtrading area demonstrated the third largestincrease with 4%.The greatest decrease insteel consumption occurred in the formerUSSR, registering a 14% decrease.

Executive summary

6 Executive summary

The world steel industry is characterised bycompanies that traditionally formed to servelocal and national markets, giving rise to afragmented industry comprised of manycompanies around the world.The top 20 steelcompanies account for about 32% of worldsteel production. In comparison, the top eightvehicle manufacturers account for 67% ofworld vehicle production while the top threeiron ore companies bring about 70% of worldiron ore production to market.

In 2002, steel companies are facing their mostsevere economic challenge in recent history.Earlier this year IISI issued a call for animmediate start of inter-governmentalnegotiations on steel. A positive response fromgovernments led to the convening of a highlevel meeting of the OECD in September.Governments from around the world metagain in December 2001 to report back onthe results of discussions that they have heldwith their individual industries.

Steel industry leaders recognise that it is theirresponsibility to improve the financialperformance of the industry by implementingthe changes in industry structure and behaviourthat are required.The now global nature of thesteel business requires further urgent and majorchanges in the size and scope of individual steelenterprises and they need clear support ofgovernments to move quickly in this direction.

The steel industry has engineered a revolutionin its performance over the last 20 years.There has been massive investment in newproducts, new plants and technology and in

new methods of working.The result has beena dramatic improvement in the performanceof steel products, and a related reduction inenergy use and consumption of raw materialsin their manufacture.

Steel products are providing solutions tosustainable development.The ULSAB-AVC(UltraLight Steel AutoBody – Advanced VehicleConcepts) Programme is a design effort tooffer steel solutions to meet society’s demandsfor a safe, affordable, environmentallyresponsible range of vehicles for the 21stcentury. ULSAB-AVC, the latest in a series ofenvironmentally-centred initiatives by aninternational consortium of sheet steelproducers, promises that steel can be anenvironmentally optimal and most affordablematerial for future generations of vehicles.Theprogramme supports this offer bydemonstrating the application of new steels,advanced manufacturing processes, andinnovative design concepts.

ULSAB-AVC will present advanced vehicleconcepts that help automakers use steel moreefficiently and provide a structural platform forachieving:

• anticipated crash safety requirements for2004;

• significantly improved fuel efficiency andreduced climate change emissions;

• optimised environmental performanceregarding emissions, increased resource andenergy efficiency and recycling;

• high volume manufacturability at affordablecosts.

The steels used for construction have beenevolving ever since their initial development in the late-1800s. A steady series ofimprovements that both enhance and reducethe cost of construction with steel has beenachieved. No one area of the world orcountry is leading this development. It spansfrom both mature and growing economies;throughout the world, steel is a major

construction material. As we move into thenew millennium, the manufacturers of steelsfor construction continue changing andimproving their products to meet thedemands for improved material properties.

Steel packaging is a good example of howproducts can be designed to increase resourceand energy efficiency, and reduce their impacton the environment, while delivering theservice demanded by society.The mass of a33cl steel beverage can has decreased overthe years, resulting in a can about a quarter ofthe mass it was 40 year ago.The decrease inmass is enabled by new steelmaking and can-making technologies and by the developmentof advanced steels that can offer the strengthand formability required to make thepackaging lightweight.

Steel’s distinctive environmental fingerprint hasmany advantages. More than half of the steelwe see around us has already been recycledfrom scrap.This valuable material – from oldcars, buildings, and steel cans, for example – isa powerful energy and resource saver. It takesat least 60% less energy to produce steel fromscrap than it does from iron ore.Wastedisposal problems are lessened because usedsteel can be recycled over and over.

Sooner or later, virtually all scrap gets back tothe steel mill. Steel’s established recycling loopand the ease with which scrap is reclaimedthrough steel’s natural magnetism helps today’sdesigners make end-of-life recycling a vital partof product planning. Steel beverage cans maybecome new steel in a matter of weeks; carsmay take ten to 15 years; buildings and bridgesnearly a century. But sooner or later virtuallyall scrap gets back to the steel mill.

Currently, there are two process routes thatdominate global steel manufacturing, althoughvariations and combinations of the two exist.These are the ‘integrated’ and the ‘mini-mill’routes.The key difference between the two isthe type of iron bearing feedstock they

consume. In an integrated works this ispredominantly iron ore, with a smaller quantityof steel scrap, while a mini-mill produces steelusing mainly steel scrap, or increasingly, othersources of metallic iron such as directlyreduced iron.

Increased energy and resource efficiency insteel production will bring significant advancesin the sustainability of the steel industry.Thesegains in efficiency result from achievements inoptimising current production methods andthrough the introduction of new technologies.

In the recent IISI study Energy Use in the SteelIndustry, case histories of four steel productfacilities indicated reductions in energyconsumption which has been in the order of25% since the mid-1970s.The report suggeststhe future may bring energy consumptionfigures of 12GJ/t of steel, a savings of about60% from current values, though this is noteconomically or technically feasible today.

Environmental issues are now so numerous,complex, interconnected and continuouslyevolving that an ad hoc approach to problemsolving is no longer considered effective. Asystematic approach to management isrequired. A formal Environmental ManagementSystem (EMS) provides a decision-makingstructure and action programme to supportcontinuous improvements in environmentalperformance.The ISO 14001 standardprovides a basis for steel companies to havetheir EMS programmes certified.

The role of the EMS in the iron and steelindustry is becoming increasingly significant incustomer, supplier, public and regulatoryrelationships, as the steel product reaches awider audience through a more informedawareness. EMS, and especially the auditingaspects, is a tool for the industry to controland improve the implemented system, and iswidespread in the industry, with 80% of thecompanies operating one.

Executive summary 7

Relevant measures of environmentalperformance include energy efficiency,resource efficiency, and releases to air, water,and ground. It is in this regard that the worldsteel industry has comprehensive worldwidedata in the form of a life cycle inventory (LCI)study. LCI is a quantitative analysis of the inputs(resources and energy) and outputs (products,co-products, emissions) of a product system.

In 1995 IISI undertook the first worldwide LCIstudy for the steel industry.This study includeda ‘cradle to gate’ analysis of steel production,from the extraction of resources and use ofrecycled materials through the production ofsteel products at the steel works gate.

In 2002, IISI will complete its secondworldwide LCI study of steel products. Amongother uses, the results of this second study canbe benchmarked against the first study togauge changes in energy and resourceefficiency and releases to air, water, andground.

A measure of the impact of steel on theworld’s social condition is the apparentconsumption per capita.This statistic might beconsidered one indication of a country’sprosperity with the notion greater steelconsumption per capita is a sign of economicprosperity.The world average for apparentsteel consumption per capita in 1999 was138.2kg.

It can be noted, in general, the moreindustrialised countries utilised between 250kgand 600kg of steel per person. Countries withdeveloping economies consume less steel percapita, with examples being China at107kg/capita, Brazil at 99kg/capita and SouthAfrica with 81kg/capita. South Korea andTaiwan, China topped the list, with SouthKorea registering 757kg/capita while Taiwan,China was at 1,109kg/capita.

The world steel industry has made greatstrides in sustainable development by providingproducts and services valued by society,increasing resource and energy efficiency,reducing emissions to air, water and land,adding economic value to the world economy,providing safe and healthy work environments,and being responsible participants in localcommunities.

Improvement will come largely from the workof the world’s steel companies and theircollaborative ventures within and external tothe industry. Accordingly, companies withregard to their individual circumstances will setpriorities for improvement, and wherepriorities coincide, with their partners andstakeholders.

8 Executive summary

(1) Estimated value calculatedas 2000 (primary andsecondary) productionmultiplied by typical prices in2000.

Introduction 9

1.1 The world steel industrySteel is a material used to build thefoundations of society. It is an iron-basedmaterial containing low amounts of carbonand alloying elements that can be made intothousands of compositions with exactingproperties to meet a wide range of needs.Steel is truly a versatile material.

Steel is produced in over 100 countries and itsmodern age goes back to the 19th century.Technological developments at that timeallowed for mass production of steel andopened up new applications like railroads andautomobiles.The origins of steel date from3,000 year ago.

An estimated value(1) of steel producedworldwide in 2000 was in excess of USD200billion. In figure 1, the value of steel and other

materials in common use is presented.Although exact values of the materialsproduced will change over time as productionand prices fluctuate, the relative magnitude ofthe world’s steel output with relation to othermaterials is apparent.

Steel is an essential material for society and anessential material for sustainable developmentfor people to satisfy their needs andaspirations. Steel is a part of people’s everydaylives, in both the developed and developingworld. Steel is used in providing transportationsuch as automobiles and railroads, buildingshelters from small housing to large multifamilydwellings, delivering energy such as electricityand natural gas, producing food with tools liketractors and hoes, supplying water with pumpsand pipelines, and enabling healthcare withmedical equipment.

Part 1: Introduction

Steel 212

110

35

29

26.7

1.3

Cement

Aluminium

Gold

Copper

Magnesium

Estimated world value (USD billion)

Figure 1: Estimated value of selected materials in 2000

The breakdown of steel markets isdemonstrated in figure 2 with the example ofthe North American situation in 1999.Thelargest markets for steel products includeservice centres, construction, automotive, andcontainers. Service centres, intermediariesbetween steel companies and finished productproducers, distributing and processing steel tomeet specific customer requirements, received26% of shipments.The second-largest marketwas construction at 17% followed byautomotive at 16%. Containers amounted to4%, machinery 2%, and all other marketsaccounted for 35%.

1.2 Commitment tosustainable developmentThe world steel industry is committed tosustainable development. On the world level,the IISI board of directors agreed in 1992 toapply the principles of sustainabledevelopment to the steel industry.Thisdirection was reinforced in 2001 when theboard of directors agreed to makesustainability one of five key activities for IISI.

10 Introduction

Containers4%

Machinery2%

Servicecentres

26%

Automotive16%

Construction17%

Other35%

Source: AISI

Figure 2: Steel shipments by market classification for North America in 1999

Corus Group plc and the community

Corus Group plc manufactures, processes and distributes steel and aluminium products as wellas providing design, technology and consultancy services.

Corus a it is an integral part of the communities in which it operates.The company activelyparticipates in community initiatives and is committed to making a positive social contribution.We place great emphasis on the contribution we make to a sustainable society and arecommitted to incorporating the principles of sustainable development into all aspects of ouroperations.

On the company level, most steel companieshave made a commitment to sustainabledevelopment by integrating economic,environmental and social aspects in decision-making, although a survey has not beencompleted to gauge exact numbers. Indeed,aspiring for good financial returns, protectingthe environment and responsibility to peopleare becoming necessities, not an option, for asuccessful business.

1.3 About this reportIISI prepared this report to communicatesustainable development activities of the worldsteel industry in preparation for the UnitedNations World Summit on SustainableDevelopment scheduled for 26 August to 4September 2002 in Johannesburg, South Africa.This report forms part of an effortcoordinated by the United NationsEnvironment Programme, Department ofTechnology, Industry, and Economics, tocontribute to the World Summit with a seriesof sectoral reports whereby internationalsectoral industry organisations take stock ofprogress towards sustainable development andoutline future challenges.

IISI is reviewing its sustainable developmentprogramme and preparing for new activities.The outcome of this review was not availablefor publication in this report. Readers areinvited to visit the IISI Web site athttp://www.worldsteel.org to obtaininformation on continuing sustainabledevelopment activities in the world steelindustry.

1.4 About IISIFounded in 1967, IISI is a non-profit researchorganisation whose members are steel-producing companies, national or regional steelfederations, and steel research organisations inmore than 55 countries.Together thecountries in which IISI steel producing membercompanies are located account for over 76%of total world steel production.

IISI undertakes research into economic,financial, technological, environmental andpromotional aspects of world steel and intovarious raw materials and human resourcesmatters on behalf of its members. It alsocollects, evaluates and disseminates world steelstatistics.

Introduction 11

12 Iron and Steel

Steel is and will remain the most importantengineering and construction material in themodern world. It is used in every aspect ofour lives and progress would be impossiblewithout it. Steel plays an essential role inmeeting the challenge of sustainabledevelopment for the world in the 21st century– improving economic and social welfarewithout prejudicing the ability of futuregenerations to do the same.

The steel industry has engineered a revolutionin its performance over the last 20 years.There has been massive investment in newproducts, new plants and technology and innew methods of working.The result has beena dramatic improvement in the performanceof steel products, and a related reduction inthe energy and consumption of raw materialsin their manufacture.

Steel is fully recyclable. At the end of theiruseful life, products containing steel can beconverted back into ‘new’ steel ready for otherapplications. As a result, steel is one of theworld’s most recycled materials.

There are thousands of grades of steel. Recentdevelopments have enabled the steel industry’scustomers to improve their products throughbetter corrosion resistance, reduced weight

and improved energy performance.Thisimprovement is seen through a wide range ofproducts including passenger cars, packagingand construction materials.

The production of steel involves theproduction of valuable by-products. Forexample, slags are processed into buildingmaterials such as cement and aggregatesproviding a contribution to the environmentby reducing carbon dioxide emissions and theneed for new raw materials.

2.1 Social dimension2.1.1 Health and safetyHealth and safety in the workplace is of thehighest priority to the world steel industry. In1999, IISI published the report Accident-FreeSteel. A special working group set up by theIISI Committee on Human Resources at therequest of the IISI board of directors preparedthis report. It contains advice andrecommendations on how to improve steelplant safety based on the experience of seniorline managers and safety specialists from IISImember companies around the world. It isaddressed to senior management, plantmanagers, safety managers and other specialiststaff in steel companies.

Implementation of the three dimensions of sustainable development 13

Part 2: Implementation of the three dimensions ofsustainable development

Tata Steel combines census efforts with AIDS awareness

Tata Steel has found a novel way to combat the spread of AIDS in Jamshedpur (India) throughthe dissemination of information pertaining to the prevention and spread of HIV/AIDS.

Over 340 employees including 200 teachers and staff of the Education Department begancensus work on 15 May 2000. During census work they visited houses in Jamshedpur anddistributed 48,000 handbills to raise AIDS awareness.The handbills, developed by the AIDS CoreCommittee,Tata Steel, bear information on AIDS prevention.

Tata Steel remains committed to extending its expertise and experience in encouraging suchefforts for the benefit of our community and the nation.

Accident-Free Steel identified three componentsas essential to progress steel plant safety:

1. the condition of the workplaceenvironment,

2. the training and competence of employees,3. the motivation and behaviour of employees.

The report focuses on the third component.The principal recommendations that appear inthe report relate to the elements that arejudged essential by all the members of theworking group.

1. Substantial commitment and leadership ofsafety by management – with both heartsand minds.

2. A change in the attitude and behaviour ofindividuals and working groups withrespect to safety in all aspects of ourcompanies.

3. The elimination of a two-tier approach tosafety.

For the first element, this requires:

• a strong and visible commitment from thevery top of the company andcommunicated to and shared by all levelsof management;

• setting examples, raising standards andimplementing them;

• a communication plan and a participatoryway of working, which will obtain thecommitment to safe working from themaximum number of persons and willconfirm that this commitment is real;

• the recognition of best practice in safetyand the exchange of these ideas, bothwithin and between companies;

• an organisation’s structure appropriate tothe problems to be solved, well defined bymanagement and well understood byeveryone in the company;

• the setting of ambitious goals for theimprovement of safety and the

measurement of progress by the collectionof appropriate statistics.

For the second element, attention should befocused on those factors that influence safetybehaviour:

• the mechanisms having an influence onbehaviour, the triggers that managementshould develop and the consequences thatshould be understood by all participants.Management’s role is to assure theadoption of those factors that can becomethe base of further progress;

• The recognition that career developmentdepends on an individual’s safetyperformance;

• putting into practice methods ofmanagement that demonstrate thatattitude and behaviour to safety is anessential part of the professionalism ofeveryone, through training programmes,individual interviews, career development,etc;

• the acceptance by everyone of his/herresponsibility for their own safety and thesafety of others.We do not work alone,but belong to a team.

The third element requires that externalcontractors working on steel sites shouldattain the same level of safety as our ownemployees and use the same methods toachieve this.

2.1.2 CommunityEvery steel company is a member of itscommunity.The involvement of steelcompanies in their communities encompassesactivities such as payment of local taxes,purchasing from local companies, charitabledonations, volunteer time, education, medicalcare, recreation and activities, arts andentertainment, and building of communities.The world steel industry represents a range ofcompany commitment to the community,including in some cases responsibility for allaspects of community development.

14 Implementation of the three dimensions of sustainable development

One example of a steel company withconsiderable involvement in its community isthe Steel Authority of India (see box above).This company, which is 86% owned by theGovernment of India, takes responsibility for itscommunity such as the building of housing,provision of hospitals, schools, and recreationfacilities.

Saldanha Steel, a South African steel company,plays a role in developing and promoting theculture of entrepreneurship andcompetitiveness in the community it operates.This initiative not only has a positive impacton the region, but at the same time enhancesthe company’s long-term efficiency. In addition,the company has committed itself toredressing past imbalances in society throughproviding sound business opportunities topreviously disadvantaged businesses andactively supporting and nurturing thesebusinesses.

In doing this, Saldanha Steel subscribes tosound business principles.While the companywill ensure equal opportunity, participation and

local community commitment, it will notcompromise on price, quality and service.Thecompany strives to develop long-term,mutually beneficial relationships with emergingand established business.

To this end, a business development initiativewas established with the overriding objective tocreate at least 20,000 jobs through outsourcingand new business creation in the first ten yearsof the plant’s existence. In 1997, Saldanha Steelappointed a business development manager,mandated to implement programmes toachieve the company’s stated objectives. Anenterprise development specialist providesadded support.

The initiative aims to promote and supportthe development of local (South African WestCoast) business, provide opportunities forentrepreneurs, create jobs and facilitateempowerment for members of the previouslydisadvantaged communities in the region.

Another company, United States SteelCorporation, through its United States Steel

Implementation of the three dimensions of sustainable development 15

Steel Authority of India (SAIL) socio-economic initiatives

Each plant and unit of SAIL has created around itself a developed community and is responsiblefor its social welfare, that of the surrounding area, and the environment that it will bequeath tothe next generation.

Since the inception, the steel plants built houses, community centres, parks, schools and marketsfor the employees, their families and others residing nearby. Modern amenities such as electricity,water, sanitation, hospitals, shopping centres, and welfare facilities, comparable to those availablein a modern metropolis, were provided.

SAIL has continuously strived to provide the best of education facilities for the children andwards of its employees. Over the years it has opened about 200 schools in the steel townshipsthat employ more than 6,000 teachers and provide modern education to about 122,000children. Apart from managing its own schools, SAIL also supports other public schools, managedindependently, opened primarily to meet the growing demand.

In each of the integrated steel plants, the company manages large hospitals to provide freemedical treatment to the employees and their eligible dependants.There are 20 hospitalssituated throughout the country having a total of 4,500 beds for the benefit of employees, theirdependants and the peripheral population.

Foundation, a non-profit membershipcorporation, provides support in a plannedand balanced manner for educational, scientific,charitable, civic, cultural and health needs. Since1953, the foundation has made grants totallingmore than $270 million.

In South Korea, at the time of POSCO’sfounding in April 1968, the port city of Pohanghad a population of around 72,000. Somethree decades later, it has emerged as astrategic industrial centre in south-east Koreawith a population of over 510,000 serving theauto, shipbuilding, and heavy industries inUlsan, the electronics industry in Kumi, the

machinery industry in Changwon, and themajor regional cities of Pusan and Taegu.

On 31 December 1972, POSCO relocated itsheadquarters from Seoul to Pohang, a decisionthat has significantly contributed to theeconomic, social, cultural, educational, andinfrastructure development of that localcommunity over the years. A prime exampleof this is the housing scheme. Since the launchof construction of the Pohang Works, POSCObuilt residential complexes covering over 198hectares, helping the host city reach a supplyratio of over 85%, a figure far higher than thenational average.

16 Implementation of the three dimensions of sustainable development

Pohang statistic 1968 1999Population 72,000 514,000Housing supply 55.7% (1975) 84%Households 13,684 160,059Running water supply 69% 85.6%Sewage supply 33% (1975) 63.5%

Table 1: Statistics for the city of Pohang, South Korea, from 1968 and 1999

Source: City of Pohang

0

200

1974 1990

United States

Japan

United Kingdom

Brazil

South Africa

2000

400

600

800

1200

1400

1000

1600

Source: IISI

Figure 3: Employment in the steel industry, 1974 and 2000

2.1.3 EmploymentOne way the world steel industry contributesto the well being of society is throughemployment, both directly with steelcompanies and indirectly with companiesproviding goods and services to the industry.

Employment in the world steel industry hasseen significant change. Figure 3 provides anexample of the evolution of employment inthe steel industry for five countries; the UnitedStates, the United Kingdom, Japan, Brazil andSouth Africa.The decrease in number ofpeople employed from 1974 to 2000 is 65%.

A key reason for lower employment levelswhile production of steel continued to expand,is finding more efficient ways to work, such asthe widespread adoption of new technologieslike continuous casting and computerisedprocess control.

2.2 Economic dimension2.2.1 Prices and tradeEconomic success of the steel industry is acritical requirement for realising sustainabledevelopment.The economic performance ofthe industry today presents its greatestchallenge.

The steel industry is experiencing a worldwidedownturn in economic performance. Althoughworld steel production is at record levels, thesupply exceeds demand and steel prices aredown.

A direct consequence of oversupply is lowprices for steel products. Figure 4 shows thecomposite steel price, in constant 1998 USD,over time.This figure clearly demonstrates theprice of steel has been steadily diminishing, inreal terms, since the early-1980s and is at alevel last seen in the mid-1950s.

(2) Based on 1999 figuresfrom IISI.(3) Based on 2000 figuresfrom The InternationalOrganisation of Motor VehicleManufacturers(4) Based on data fromNational Australia Bank IronOre Quarterly, July 2001.

Implementation of the three dimensions of sustainable development 17

01900 1907 1914 1921 1928 197019631956194919421935 1984 1991 1998

200

400

800

1,000

600

1,200

Steel price (USD/tonne)

Source: United States Geological Survey

Figure 4: Composite steel price in constant 1998 USD

Steel companies have traditionally formed toserve local and national markets, giving rise toa fragmented industry comprised of manycompanies around the world.The top 20 steelcompanies account for about 32% of worldsteel production.(2) In comparison, the topeight vehicle manufacturers account for 67%of world vehicle production(3) while the topthree iron ore companies bring about 70% ofworld iron ore production to market.(4)

While the steel industry is fragmented, themarket for its products is increasinglybecoming global. As evidenced in figure 5, theworld trade in steel as a percentage of steelproduction nearly doubled to 46% since 1980.

18 Implementation of the three dimensions of sustainable development

0

10

1980 19841982 1986 1988 1990 1992 1994 1996 1998

20

30

40

50

60

World trade in steel(% of crude steel production)

Source: IISI

Figure 5:World trade in steel as a percentage of world crude steel production

2.2.2 Global view of steel productionand consumptionSteel is produced Worldwide in the majorityof the world’s nations, although over 96% ofworld steel production in 2000 was producedin 36 countries. From table 2 it can be seenthat China was the largest steel producingcountry in 2000 with 127.2 million tonnes.Twoother nations produced over 100 milliontonnes of steel in 2000, those being Japan at106.4 million tonnes and the United States at101.5 million tonnes.Together, these threenations account for almost 40% of world steelproduction. If consideration is extended to thetop ten steel producing nations, just over 70%of world steel production is accounted for.Thetop 20 steel producing nations producedalmost 87% of the world’s steel in 2000.

While China is the world’s largest producer ofsteel, it is also the world’s largest consumer ofsteel with an apparent consumption of 141.2 million tonnes.The United States ranksas the second largest consumer of steel at 115.0 million tonnes, followed by Japan at 76.1 million tonnes.The top ten nationsaccounted for almost 69% of steelconsumption in 2000 while the top 20 nationsmade up 83% of world steel consumption.

The world production of crude steel andapparent consumption of crude steel ispresented in figure 6 (see page 20).

Implementation of the three dimensions of sustainable development 19

Country Steel production Apparent steel consumptionChina 127.2 141.2Japan 106.4 76.1United States 101.5 115.0Russia 59.1 23.0Germany 46.4 36.9South Korea 43.1 38.5Ukraine 31.4 9.7Brazil 27.9 15.8India 26.9 26.9Italy 26.7 30.9France 21.0 17.6Taiwan, China 16.7 21.1Canada 16.6 17.5Spain 15.8 17.5Mexico 15.7 14.4United Kingdom 15.2 13.1Turkey 14.3 12.4Belgium* 11.6 4.2Poland 10.5 7.5World 847.2 768.

Table 2: Major steel producing and consuming countries in million tonnes, 2000

* Consumption includes LuxembourgSource: IISI

2.2.3 Restructuring of steel companiesThree noticeable trends are happening withinthe world steel industry with respect to steelcompanies.The first is consolidation, thesecond is de-mergers, and the third isbankruptcy.

Europe leads the way in consolidating theworld steel industry.The world’s largest steelcompany will emerge from the consolidationof Luxembourg’s Arbed, France’s Usinor, andSpain’s Aceralia into a new company calledArcelor. Arcelor will produce some 50 milliontonnes of steel per year and have 110,000employees. Arcelor will be almost double thesize, in terms of steel produced, of its nearestcompetitors, Nippon Steel and POSCO.

In Japan, NKK Corporation and Kawasaki SteelCorporation announced they will merge, firstto be joined under a holding company in 2002and then as a fully integrated business segmentof JFE Holding in 2003.The combined crudesteel production of these two companies willbe about 30 million tonnes per year.

The LMN Group, the world’s fourth-largeststeelmaker in 2000, worked over the lastdecade to establish a global network ofsteelmaking facilities. Notable acquisitionsinclude Inland Steel Company of the UnitedStates, Unimetal Group of France, steelproduction facilities obtained from Thyssen,and the assets of a large steel plant inKazakhstan.

This consolidation follows recent mergers ofBritish Steel and Koninklijke Hoogovens to formCorus Group plc and the German merger ofThyssen and Fried. Krupp Hoesch-Krupp toform ThyssenKrupp AG. Further consolidationdiscussions have been made public, notably inthe United States and Japan, and it would notbe unexpected if the future should bringfurther mergers of steel companies.

Notable de-mergers that have recently beencompleted or are about to be completed areoccurring around the world. In the UnitedStates, United States Steel and Marathon Oilwere under the umbrella of USX. Since the

20 Implementation of the three dimensions of sustainable development

640

660

680

1990 1991 1992 1993 1994 1995 1996 1997 19991998

700

720

740

780

800

760

820

Crude Steel Quantity(million tonnes)

Production

Consumption

Source: IISI

Figure 6:World crude steel production and apparent consumption1990 to 1999

start of 2002, the companies were completelyseparated with the steel company taking thename United States Steel Corporation andnow acting on its own. In South Africa, Iscorwas unbundled into two entities, one beingsteel and retaining the name Iscor Limited,while the mining assets became KumbaResources. In Australia, BHP Billiton isseparating its steel company, BHP Steel, fromits remaining resource ventures.

With regard to bankruptcy, in the UnitedStates alone, according to the UnitedSteelworkers of America, 29 steel companieswith 63,000 employees filed for bankruptcyprotection and 11 companies have ceasedoperations. Among the casualties are the thirdand fourth largest steel producers in theUnited States, Bethlehem Steel and LTV Steel.In Canada, the nation’s third-largest integratedsteel company, Algoma Steel, is also inbankruptcy protection and seeking toreorganise.

2.3 Environmental dimension2.3.1 Steel products

2.3.1.1 AutomotiveThe ULSAB-AVC (UltraLight Steel AutoBody– Advanced Vehicle Concepts) Programme is adesign effort to offer steel solutions to meetsociety’s demands for a safe, affordable,environmentally responsible range of vehiclesfor the 21st century. ULSAB-AVC, the latest ina series of environmentally-centred initiativesby an international consortium of sheet steelproducers, offers the promise that steel can bethe most environmentally optimal and

affordable material for future generations ofvehicles.The programme supports this offer bydemonstrating the application of new steels,advanced manufacturing processes, andinnovative design concepts.

ULSAB-AVC also provides a steel-basedcomparison vehicle to dispel themisunderstanding that only more costly, lessmanufacturable alternative materials canprovide the attributes necessary to attain fuelefficiency goals.

ULSAB-AVC takes a holistic approach to thedevelopment of a new advanced steelautomotive vehicle architecture.The scope ofthe programme goes beyond the bodystructure to include closures, suspensions,engine cradle and all structural and safetyrelevant components.

ULSAB-AVC presents advanced vehicleconcepts that help automakers use steel moreefficiently and provide a structural platform forachieving:

• anticipated crash safety requirements for2004;

• significantly improved fuel efficiency;• optimised environmental performance

regarding emissions, source reduction andrecycling;

• high volume manufacturability at affordablecosts.

The programme commenced in January 1999with a comprehensive benchmarking of existingvehicle concepts and an investigation of vehicletrends.Targets have been set with reference tothe United States government’s environmentalprogramme, Partnership for a New Generationof Vehicles (PNGV) and the EU initiative,EUCAR, a stringent CO2 reduction programme.

The consortium commissioned PorscheEngineering Services (PES) of Troy, Michigan,United States, to undertake the programme.PES will integrate automotive industry

Implementation of the three dimensions of sustainable development 21

feedback and knowledge it acquired in thedevelopment of the UltraLight Steel AutoBody (ULSAB) into this new initiative.

The elusive mix of lightness and strengthwhich only modern steel can provide is vitalfor the driving machine of the future. Entireautomobile side panels are now being made inone operation by pre-welding sheets withhigh-speed lasers prior to forming. By fusingtogether steels of different thicknesses andqualities, designers can distribute the metaloptimally in the body components withoutsacrificing security levels.

What is the steel autobody?The steel autobody is a carefully designedsynthesis of components, each tailored toperform a specific function. It providesstrength, rigidity, and structural integrity. Itensures passenger security in case of impact.At the same time, it protects the vehicleagainst the elements and satisfies increasingdemands for aesthetics and durability.More than half the steels used in cars todaywere not available a decade ago.

What do new steels mean to the car buyer?New high strength steels, two or three timesstronger than their predecessors, mean lighter,more fuel-efficient vehicles. Revolutionaryultra-clean steels that can be shaped moreeasily are meeting car buyers’ demands forincreased styling and variety.

Some of the newest steels offer driver andpassengers greater protection through theirbuilt-in capacity to change properties duringprocessing in the automobile plant. Such steelscan be easily formed into the complex partsof the car body.They then undergo a processof self-strengthening which is completed underthe heat of the automotive paint line,increasing the strength and dent resistance ofthe car body by as much as 30%.

How is the autobody is made?Forming (stamping) the various parts of the carbody in high speed automated presses.Modern versatile steels enable today’s fullyautomated presses to produce up to 15,000major car body components a day. Outputs of20,000 are projected. Advanced computerdesign and analysis make possible lower costcars by reducing the number of bodycomponents and decreasing the need forexpensive stamping equipment.Assembling the body parts by advanced weldingand bonding.Using steel’s intrinsic electrical properties,modern welding technology fuses automotivecomponents together at rates of seven millionspot-welds a day. Lighter, faster robots able tomonitor weld quality will increase speed by asmuch as 30%.Painting or applying the complex coating systemsthat provide beautiful and long lasting finishes.The finishes on steel body components arecomplex systems carefully engineered toprovide both beauty and protection. At theirbase are highly efficient galvanised coatings

22 Implementation of the three dimensions of sustainable development

Breakthrough BenefitHigh strength steels Lighter, safer, less thirsty cars from thinner, much tougher steels.Ultra-clean steels More luxurious, better styled cars due to easier forming of complex(interstitial free) parts.Bake hardening steels Self-strengthening steels provide greater safety at less cost.Advanced coated steels Improved corrosion resistance for longer lasting cars.

Table 3: Benefits of breakthrough technologies in steel products

Source: ULSAB-AVC Consortium

with an unusual ability both to create a barrieragainst corrosive elements and to neutralisethem in case of damage.

The steel autobody: why is it safe?The designer’s concept for each new carmodel starts with the security cell surroundingthe driver and passengers. Occupants arebetter protected because the carefullyengineered safety compartment in new highstrength steels is structured to preventpenetration from other parts of the car.Outside the safety cell, the front and rear aredesigned with built-in crumple zones. Onimpact, they collapse successively in controlledaccordion folds so that energy is absorbedgradually into the whole structure.

Steel’s reliability and the vast database thatexists on steel properties make it possible tooptimise carbody safety design by simulatingimpact behaviour on the computer.This waydesigners can meet carmaker’s rigorousperformance objectives without lengthyexperimentation. Crash management conceptsbased on steel are proven by long experience– which means added reliability, extra security.

Steel’s inherent safetySteel inherently provides a vital security marginin case of collision because of its remarkableability to deform and harden simultaneously.

The collision forces collapse and thenstrengthen the impact area: (1) causing theprocess to be repeated at an adjacentlocation. (2) The process is repeated over andover, (3) resulting in a progressive collapse ofthe component and a steady absorption oflarge amounts of impact energy. At higherimpact velocities, the strength of steel

increases without the risk of breakage oftenassociated with other materials.

The steel autobody: why does it last longer?Steel naturally is:

• non-flammable,• unaffected by ultraviolet radiation,• not structurally destabilised by humidity,• dimensionally stable in heat and cold.

Today’s corrosion resistant steels arecustomised to provide one and two-sidedprotection and to meet different requirementsfor the surface and underside of the car body.Advanced multi-layer coating systems with asophisticated outer barrier provide qualityfinish and a sacrificial undercoating for backupprotection.These enable carmakers to custom-design protection and to provide guaranteesup to ten years against major types ofcorrosion.

Anatomy of a modern coating system:1. metallic undercoating,2. steel base,3. adhesion zone: improved interaction and

diffusion of iron atoms into coating,4. alloy coating for barrier and sacrificial

protection,5. metallic barrier coating,6. organic coating for additional protection,7. primer and paint layers.

Implementation of the three dimensions of sustainable development 23

3 2 1

steel

12

outer side

635

7

4

The steel autobody: why is it beautiful?The mirror finish of today’s cars starts beforethe autobody sheets leave the steel plant. Highprecision finishing techniques embossmicroscopic peaks and valleys on the steelsurface. Laser and electro-dischargetechnologies set the height and frequency ofthese contours so that the highly efficientpainting systems produce a surface withundistorted image reflection.

The steel autobody: why is it recycled?Of the 600 materials that make up themodern automobile, steel is the easiest torecycle.The potential savings in terms of theearth’s finite resources are important when weremember that 55% to 65% of each car issteel. Recycling the steel from a car isstraightforward. Once the car is gutted anddrained of fluids, the carcass is shredded andthe steel is extracted by magnetic separation.Many of the remaining materials are not asreadily recyclable and end up in increasinglyscarce landfills or require incineration.

The steel autobody: how is it recycled?More than 26 million cars will be scrapped inthe United States, Japan and western Europein the year 2000 – almost double the numberdisposed of in 1980. Ninety-five per cent ofthe steel used in today’s cars is recycledroutinely.The materials which designers use incars today will directly reflect their recyclabilityafter the year 2000.

2.3.1.2 ConstructionMost of the wealth of mankind resides in theconstructed environment – and most of theworld’s output of steel is directed to theconstruction market.This will not change, evenif segments of the world suffer regional andtemporary downturns, for construction is tieddirectly to population growth, to the need fortransportation and infrastructure and to thebasic need of maintaining and elevatingworldwide standards of living.

The steels used for construction have beenevolving ever since their initial development inthe late-1800s. Continuous improvement inboth enhancing and reducing the cost ofconstruction with steel has been achieved. Noone area of the world or country is leadingthis development. It spans both mature andgrowing economies; throughout the worldsteel is a major construction material.

One way of identifying these evolutionarychanges is to cite some of the constructionissues that have been in some way mitigatedby new steel developments.Today’sconstruction steels meet stringentrequirements for corrosion resistance, highperformance and fire protection.

24 Implementation of the three dimensions of sustainable development

14,530,900

1980

21,348,500

1990

26,366,900

2000

As we move into the next millennium themanufacturers of steels for constructioncontinue changing and improving theirproducts to meet the demands for improvedmaterial properties. Furthermore, parallel tothe changes being made to steels, manyconstruction materials are increasingly beingused in conjunction with one another so as toeconomically maximise the synergy of eachmaterial’s assets. Steel is interwoventhroughout all these concepts, for steel is thematerial that gives most other constructionmaterials their strength and ductility, be it forthe steels that reinforce concrete or the steelsthat fasten wood.

Corrosion resistanceLong considered a serious drawback for steels,corrosion not only reduces steel through lossof material, but is often unaesthetic. However,much has been done to improve steel’scorrosion resistance and, in at least oneapplication, to promote the process of surfacecorrosion.

Rust can be good for steel!Known worldwide as weathering steel, thisdevelopment evolved from a 1933 discoverythat steel made from a copper-bearing orehad greater than expected corrosionresistance. In most climatic conditions, thevarious modern grades of weathering steeldevelop an adherent layer of corrosion thatserves as a partial barrier to further corrosion.Once this occurs, and if the adherenceprevents flaking of the corrosion layer, thecorrosion process proceeds at a rate that isnot structurally detrimental to the capacity ofthe structure.

First used for railroad cars carrying coal, andnow widely applied for fabrication ofcargo/freight containers, the evolutionaryversions of steel today are important to theunique application of bridge construction.Maintaining paint on a bridge is costly and,over its lifespan, may well cost far more thanthe original bridge. Use of weathering steels

provides a cost-effective solution; first by theinitial savings in paint and, secondly, by thematerial and environmental savings of nothaving to repaint a difficult structure.

The use of weathering steels has grown inrecent years and will continue to grow in thefuture. Recent developments have increasedlevels of strength and facilitated weldingprocesses. It is anticipated that increasingworldwide environmental restrictions of theremoval and replacement of paint will furtherboost the market for these steels in bothbridge and building applications.

Resistance to corrosion is also addressed byother developments, principally protectivecorrosion-resistant barriers. Zinc, tin, lead,chromium and aluminium have served thisfunction for years, but new developments haveenhanced their effectiveness. One suchimprovement has been the addition of variousquantities of aluminium to zinc for hot-dippedcoatings, creating a product that is a synergisticimprovement – the resulting corrosionresistance, for the same thickness of coating, isbetter than the sum of both protectivematerials.

Developments in this field, in which othermetallic barrier materials are being studied,continue worldwide.The extended life ofautomobiles, appliances and other capitalgoods will depend even more on improvedcorrosion resistance as the tendency towardhigher strength, lighter and thinner steelscontinues.

Paint, both organic and inorganic, is anotherversion of the corrosion-resistant barrier.These products have also undergone majorimprovements in recent years. One of themore significant is when paint, in multiple coatsfrom primer to topcoat, is applied undercontrolled conditions to steel in coil form.These paint systems, which then have theadhesion and ductility needed for beingformed into final products, provide a high

Implementation of the three dimensions of sustainable development 25

quality finished surface that eliminates theenvironmental and workplace hazards of post-fabrication spraying or dipping.

Use of these products will continue to rise,not only because of the better quality of thecoated surface, but because environmentalrestrictions will favour the application of paintin a totally controlled environment.

When an even more durable surfacetreatment is needed, an alternative to a hot-dipped coating is a heat-cured epoxy coating.Today, worldwide, this product is usually thematerial specified for environments typified bymarine, bridge and highway applications wheresalt corrosion is anticipated. Its use is growing,particularly to extend the life of concrete inbridge surfaces.

High performance steels One of the more recent developments of newconstructional steels is a grouping ofdevelopments given the broad term highperformance. High performance does notnecessarily mean higher strength, but ratherthe improved performance of a number ofinterrelated variables.

For example, welding is used in mostconstruction fabrication.This can be expensive,not just for the process, but also for theprecautions that have to be taken for thicksections and adverse site conditions. Many ofthe newer construction steels ease the needfor these precautions by making it possible toproduce high quality welds faster with lesseffort, with less consideration for pre-heat andpost-heat and with less concern about internalcracking.

Ductility is a characteristic that permits steelto elongate without fracture, highly desirablefor the process of forming cold steel intoshapes and for steel structures that have toresist earthquakes. Special ductile steels havebeen developed in Japan for earthquake-resistant building construction. In

Luxembourg, steel profiles have beendeveloped for their high degree of ductility,for use in the cold conditions of arctic andoffshore construction.

Strength, however, remains one of the keycharacteristics of high performance steels.Within certain structural limits of defection,increased strength equates to reduced steelquantities, which in turn may lead to reducedconstruction cost.

The new high performance steels exhibit acollective mix of improved characteristics thatmore than compensate for their higher specificcost.They offer opportunities to reduce thefinished-project cost by lowering fabricationcost and, by reducing material weight, the costsof shipping and erection, with an end result ofimproved performance and thereby improvedvalue.

Much of the early research in these productswas done for military applications wherecombinations of reduced weight, higherstrength and easier fabrication were morecritical than cost. Adapting this technology toconstruction applications, along withappropriate and essential reductions inmaterial costs, continues to stimulate furtherdevelopment of new steels.

Fire protectionSince steel was first used as a structuralframing material, most regulatory standardshave required that it be protected from high-temperature fire.Two options have beencommonly used; either thermal insulation toseparate the steel from fire or water sprinklersto put the fire out or cool the steel. For nearlya century the standards for fire protectionhave been based either on tradition or tests inspecialised furnaces, practices that oftenresulted in immoderate protectionrequirements. As more and more of theworld’s population moves to ever-expandingurban areas, developers are exploring newavenues for protecting structures and their

26 Implementation of the three dimensions of sustainable development

occupants, finding new ways to make the fireprotection of steel more effective andeconomical.

The first of these is the transition fromexpensive real-life testing, to quicker and lessexpensive calculations using sophisticatedcomputer models. Gradually, as calculationmethods are being refined and regulatoryauthorities become confident in applying them,savings in steel protection can be realised inmany ways. More realistic evaluation of fireconditions results in more precise applicationof protection, allowing for the elimination ofexcessive protection.

For structures such as those that use anexposed frame as an architectural feature,thermal insulation can be replaced with liquidfilling of tubular members. If the members arehydraulically connected and the heated liquidis free to move, the steel frame is able todissipate its thermal load through convectivetransfer to other, non-heated segments of theframe.

In another development, a Japanese steelproducer has adapted technology developedfor steels used in elevated temperatureapplications to the steels used for buildingframes; constructional steels have beendeveloped which have superior residualstrength characteristics at temperatures above500°C.While not eliminating the need for fireprotection, the special steels for thisapplication require less protection than steelstraditionally used.

The total cost of a completed structural frameincludes the cost of the steel components, offabrication, shipping and erection, plus the costof fire protection. Studies in the UnitedKingdom have shown that for those caseswhere fire protection is a significant part ofthe total cost, it is possible to economicallyreplace protection with additional steel.Theconcept is that a heavier, structurally over-designed frame can tolerate higher

temperatures. In addition, because of theirlarger size, heavier frame members heat upless quickly in a fire.The end result is thecalculation of cost trade-offs in which moresteel may be the route to more economicalprotection.

To advance the consideration of sustainabledevelopment in construction, in May 2002,Luxembourg will host the IISI WorldConference 2002 – Steel in SustainableConstruction.This conference, which buildsupon the success of the ‘Steel in Green BuildingConstruction Conference’ held in Orlando in1998, will focus on:

• what sustainable development means forthe construction industry,

• raising awareness about sustainableconstruction and its business benefits,

• how steel construction solutions cancontribute to more sustainabledevelopment.

Implementation of the three dimensions of sustainable development 27

The conference will attract an audience ofhundreds of construction professionals,including architects, builders, engineers, andfabricators, to further the cause ofimplementing the principles of sustainabledevelopment in the construction sector.Thereader is invited to find more information onthe conference Web site athttp://www.sustainblesteel.com.

2.3.1.3 PackagingSteel is one of the leading materials used forattractive, convenient and cost-effectivepackaging today. Because they are strong,lightweight, versatile and recyclable, packagingsteels are ideal for a wide variety of food,beverage and other packaging applications. Inaddition, these steels are used in numerousother items ranging from cookware toautomotive components to paper clips.

Steel packaging is a good example of howproducts can be designed to increase resourceand energy efficiency, and reduce their impacton the environment, while delivering theservice demanded by society. Figure 8demonstrates how the mass of a 33cl steel

beverage can has decreased over the years,resulting in a can about a quarter of the massit was 40 year ago.The decrease in mass isenabled by new steelmaking and can-makingtechnologies and by the development ofadvanced steels that can offer the strength andformability required to make the packaginglightweight.

28 Implementation of the three dimensions of sustainable development

Figure 7: Shaped steel beverage can

Source: APEAL

0

20

1951 19671956 1972 1975 1985 1987 1992 1996 2000

40

60

80

100

Mass of a 33cl steel beverage can (g/can)

Source: APEAL

Figure 8: Mass of a 33cl steel beverage can

The resulting gain in resource and energyefficiency can be seen in the fact it took38,000 tonnes of tinplated steel to produceone billion cans in 1983. In 2003, it is expectedthat only 25,600 tonnes of tinplated steel willbe needed to produce one billion cans.

2.3.2 Steel manufacturing2.3.2.1 Process descriptionCurrently, there are two process routes thatdominate global steel manufacturing, althoughvariations and combinations of the two exist.These are the ‘integrated’ and the ‘mini-mill’routes.The key difference between the two isthe type of iron bearing feedstock theyconsume. In an integrated works this ispredominantly iron ore, with a smaller quantityof steel scrap, while a mini-mill produces steelusing mainly steel scrap, or increasingly, othersources of metallic iron such as directlyreduced iron.

The integrated steelmaker must first make ironand, subsequently, convert this iron to steel.Raw materials for the process include iron ore,coal, limestone, steel scrap, energy and a widerange of other materials in variable quantitiessuch as oil, air, chemicals, refractories, alloys,and water. As the process flowsheet in figure 9shows (page 30), iron from the blast furnace isconverted to steel in the Basic OxygenFurnace (BOF) and, after casting andsolidification, is formed into coil, plate, sectionsor bars in dedicated rolling mills.Theintegrated steelmaking route accounts forabout 60% of world steel production.

Steel is made in an electric arc furnace (EAF)works by melting recycled scrap in an EAF andadjusting the chemical composition of themetal by adding alloying elements, usually in alower powered ladle furnace (LF).The processflow sheet shown in figure 10 (page 31)indicates that the ironmaking processes,operated on the integrated plant, are notrequired. Most of the energy for meltingcomes from electricity, although there is anincreasing tendency to replace or supplementelectrical energy with oxygen, coal and otherfossil fuels injected directly in the EAF.

In addition to steel scrap, metallic substitutessuch as direct reduced iron (DRI) arebecoming increasingly important where scrapavailability is limited, where the impuritycontent of scrap is high or where a localisedraw material resource is available. Downstreamprocess stages, such as casting and reheatingand rolling, are similar to those found in theintegrated route.

A third steelmaking technology, open hearthfurnace steelmaking (OHF), remains in use forabout 4% of world crude steel production(figure 11, page 32). Countries where openhearth steelmaking is still employed, based on2000 data, include Russia, Ukraine, Bosnia-Herzegovina, Czech Republic, Poland,Uzbekistan, Latvia, China, India and Turkey.

Implementation of the three dimensions of sustainable development 29

30 Implementation of the three dimensions of sustainable development

Hot dip galvanisingOrganic coating

Chrome plating Tin plating

Electogalvanising

Pickling Pipe/tube making

Cold rolling

Tempering andannealing

Section rolling Rod and bar rolling

Ladle metallurgy

BOF steelmaking

BF iron making

Coke making

Steel recycling

Sintering

Pelletising

Continuous casting Ingot casting

Hot rolling Plate rolling

Figure 9: Process flow diagram for steel productionusing the blast furnace route

Implementation of the three dimensions of sustainable development 31

Hot dip galvanising

Pickling

Cold rolling

Tempering andannealing

Hot rolling

Section rolling Rod and bar rolling

Roughing mill

Thin slab casting Continuous casting

Ladle metallurgy

EAF steelmaking

Scrap preparationSteel recycling

Ingot casting

Figure 10: Process flow diagram for steel production usingthe electric arc furnace (EAF) route

Steel manufacturing operations have thepotential to lead to a variety of impacts on theenvironment.These impacts depend on theprocess stage, the size and type of operation,the technology employed, the nature andsensitivity of the surrounding environment, andthe effectiveness of planning, pollutionprevention, mitigation and control techniquesadopted.The perceived severity of impacts willbe based on value judgements made bysociety and will be linked to the current statusof scientific debate.

Cleaner production is good business, good forgovernment, industry and society at large.Thelesson from the past is simple: it is less costlyto prevent pollution at source than to clean itup after it has been produced.

Cleaner production may not solve all of theenvironmental problems at a facility, but it willdecrease the reliance on end-of-pipe solutionsand will create smaller quantities of less toxicwaste requiring treatment and disposal.Cleaner production will reduce workers’exposure to hazardous chemicals and the

potential for accidents that can lead to harmof surrounding areas. Products that aredesigned and produced with cleanerproduction in mind are less harmful to theenvironment and their residuals are less of aburden to waste streams.

As a guide, the application of cleanerproduction can be subdivided into thefollowing areas:

• change of process or manufacturingtechnology;

• change of input materials;• change to the final product;• reuse of materials on-site, preferably within

the process. Off-site recycling is notconsidered part of cleaner production,although it may bring substantialenvironmental benefits;

• Improved housekeeping;• training.

The steel industry in the 1950s and early1960s was a major source of pollution,particularly air pollution, in the densely

32 Implementation of the three dimensions of sustainable development

0

100

1970 1975 1980 1985

OHF

BOF

EAF

1990 1995 2000

200

300

400

500

600

World crude steel production by technology(million tonnes)

Source: IISI

Figure 11: Share of world crude steel production by process technology

populated areas where production hastraditionally been concentrated. Initially, theproblem was tackled with the retrofitting ofgas and dust collection facilities to existingplants, but this approach was superseded bythe replacement of obsolete plants, withnewer facilities designed with cleanerproduction in mind, and the training ofpersonnel to raise awareness of environmentalissues.Thus, the improved design, operation,and maintenance of steelworks processes hasresulted in a reduction of emissions to air of50% to 80% over the last 20 years.

2.3.2.2 Air pollution preventionAir pollution remains the most significantenvironmental issue for steelmaking, but thereduction or prevention of atmosphericemissions is closely linked to energy andresource conservation, as well as waste watermanagement. For example, by-product gasesare a valuable fuel source which form anintegral part of a steelworks energy balance.However, cleaning systems are required totreat these gases before they can be used andthe resulting waste water may containparticulate matter and some heavy metals ororganic pollutants, cyanide, ammonia, and otherspecies. In addition, iron containing dusts andsludges may also be collected.

Thus, by reducing emissions to air of by-product gases a steelworks can benefit fromthe flexibility of a captive energy resource,reducing energy consumption, and theavailability of iron-containing materials thatmight be returned to the process, reducingresource consumption. Recirculating systemscan be employed ensuring that the water isused effectively within the process and, withcareful management of the necessary systembleeds, process water might be downgradedto less critical applications, thus minimising theoverall water demand of the steelworks.

If prevention at source is not possible,emissions should be captured as close aspossible to the point at which they are

generated. Hoods and enclosures are widelyused, incorporating carefully designedductwork to prevent dust drop out, blockage,or excessive erosion, and, once captured, theoffgas is cleaned prior to discharge.

There are four main types of gas cleaningdevice including:

• fabric filters, which have been adapted foruse at high gas volumes and temperatures,with variable dust size and dust loadingsand under acid and alkaline conditions.Filters are used primarily to capture dustand fume and are routinely integrated intomaterials handling systems, the blastfurnace, BOF and EAF steelmaking plantand rolling mills;

• electrostatic precipitators (ESPs), whichapply an electrical charge to the particlesof dust, causing them to attach tooppositely charged plates. Again, ESPs areused primarily to capture dust and fumeand are routinely integrated into cokeovens (tar separators), sinter and pelletplant, BOF and EAF steelmaking plant;

• wet scrubbers, which wash the offgas witha stream of water droplets.The pollutantladen water is collected, cleaned of solidsand dissolved substances and then recycledback to the scrubber. These systems canbe used to capture a wider range ofpollutants including dust, fume, acid gases,acid aerosols etc. and may be incorporatedinto lime production plant, coke ovens,sinter and pellet plant, BOF steelmaking,pickling and coating operations;

• dry cyclones, which accelerate the offgaswithin a cyclone to remove particulate witha centrifugal action. Cyclones can onlyremove particulate and, because theyoperate at a lower efficiency than the othersystems discussed, particularly where finematerial is present, they are not now widelyapplied. Examples include the application ofthese systems on the sinter plant mainwaste gas, although this is notrecommended, and on the sinter cooler gas.

Implementation of the three dimensions of sustainable development 33

The best technology for a particularapplication will be dependent on the type ofemission to be abated and on localcircumstances. For example, electrostaticprecipitators use less energy than the othermethods, but are unsuited to highly resistivedusts.Wet scrubbers are suitable for treatingsaturated gases but require water pollutioncontrol facilities to clean the water. Fabricfilters provide high cleaning efficiency, but canoperate over only a limited range oftemperature and moisture conditions.

2.3.2.3 Water and waste water managementThe total water requirement of the iron- andsteelmaking processes is of the order 100-200m3 per tonne of product supplied, primarily, byintegrated recycling systems. From theviewpoint of pollutant control a high recycling

ratio is preferred, however, factors such asbuild-up of hardness and conductivity requirethat an optimum recycling ratio is determinedfrom a total water system analysis.

Table 4 illustrates a comparison between theintake water requirements of a once-throughsystem and a system involving extensiverecirculation in a typical integrated works.Theextensive recirculation in indirect and directcooling systems reduces the total water intaketo 2.4% of the requirement of the oncethrough system.

Sources of waste water include that resultingfrom direct and indirect cooling, gas cleaning,scale breaking, pickling, washing and rinsingoperations and rainfall runoff such as from rawmaterial stockpiles, roads, and building roofs.

34 Implementation of the three dimensions of sustainable development

Emissions abatement in coking works in Poland

A cleaner production assessment of the coking plants in the Zabrze Coking Works, Poland, wascarried out to establish the sources of emitted pollution. Implementation of cleaner productiontechnology for the coke gas cooling system resulted in the following:• reduced hydrogen cyanide emissions by 91%,• reduced benzene emissions by 88%,• reduced toluene emissions by 89%,• reduced xylene emissions by 88%,• reduced hydrogen sulphide emissions by 85%.The payback period of the capital investment was one month.

Water use Quality Water intakeOnce through Extensive recirculation

m3/minute % of total m3/minute % of totalIndirect cooling General 675 70.7 7.4 32Direct cooling General 265 27.8 6.2 26.8Process water Low grade 7.7 0.8 5.1 22.1Potable High 1.5 0.2 1.5 6.5Total 954 100 23.1 100

Table 4: Intake water requirements for a four million T/ycrude steel integrated works

Source: IISI

Direct cooling involves the open spraying ofwater onto steel or equipment and is mostcommonly used for cooling hot steel leadingto contamination with millscale and equipmentoil.Water used for indirect cooling is containedin a closed system and is far less prone tocontamination, however, some water must beremoved from the circuit to prevent excessivewater hardness and build-up of suspendedsolids.

When direct and indirect cooling systems areused together, the water removed from theindirect circuit can often be used as make-upwater for the direct cooling system, althoughsome intermediate cooling may be required.Similarly, although a waste water treatmentplant and pumping system can render wastewater reusable, the use of poor quality waterin critical areas may cause product degradationand equipment deterioration. As such, wastewater may be best suited for quality insensitiveapplications such as dampening of raw materialstockpiles or road washing.

Waste water treatment involves a combinationof physical, chemical and biological processes.Each waste water stream normally undergoesan initial treatment close to its source, perhapsto remove gross solids and oil, before beingsent to a secondary treatment system. Somesites also use municipal waste water treatmentsystems to complement internal secondarysystems.

There are several basic treatments, applied atmost steelworks, that are capable of removingthe great majority (by mass) of waterbornepollutants prior to discharge and others,applied as necessary, to remove tracepollutants.These include:

for the removal of solids:• settling basins, which are a simple, low

maintenance means of removing solidparticles from liquid by gravity. After apreliminary stage of chemical coagulation

and precipitation using aluminium or apolymeric flocculent, the velocity of thewaste water stream is reduced as it passesinto a large volume basin where settlingoccurs. Sufficient retention time and regularsludge removal are important factors thatdetermine the success of this method;

• clarifiers, which are more effective thansettling basins for the removal ofsuspended solids, require less space andprovide for centralised sludge collection.Conventional clarifiers consist of a circularor rectangular tank with either amechanical sludge collection device or asloping funnel shaped bottom into whichsludge collects. Advanced clarifier designsusing slanted tubes or inclined plates maybe used for pre-screening coarse materialsthat could clog the system. Chemical aidscan be used to enhance solids removal,although chemical pre-treatment andsludge removal systems both requireregular maintenance;

• filtration is a highly reliable method ofwaste water treatment, capable ofremoving suspended solids and unwantedodours and colour.The advantages offiltration are the low solids concentrationthat can be achieved, low investment andoperating costs, modest land requirementsand low levels of chemical discharge. Somepre-treatment may be necessary if thesolids level is greater than 100mg/L. Severaltypes of filter and filter media are used,such as the pressure type or gravity types,operating with single, dual or mixed filtermedia.The most important variable in filterdesign is the width and depth of the media,although particle density, size distributionand chemical composition are alsoimportant in terms of media selection.Themedia selected depends on the filtrationrate and may consist of sand, diatomaceousearth, walnut shells or, for concentrationsbelow 5mg/L solids, anthracite. All filtersrequire regular back washing to preventaccumulation of solids in the filter bed.

Implementation of the three dimensions of sustainable development 35

For the removal of oil:• skimming, which can be used to remove

floating oil and grease from the watersurface. Skimming efficiency depends onthe density of the floated material and theretention time for phase separation, whichvaries from one to 15 minutes. Dispersedor emulsified oil cannot be removed byskimming. Skimming is often used as a pre-treatment to improve the performance ofsubsequent downstream treatments;

• filtration is an effective means of removingoil from water. Problems are onlyencountered when high oil concentrationscontact the filter bed directly, although thiscan be avoided if appropriate pre-treatments are applied;

• flotation, in which air bubbles attach to theoil particles that then rise to the surfaceand can be skimmed off.The principaladvantage of flotation over sedimentationis that very small particles can be removedmore completely and in a shorter time.Various types of flotation are possible. Forexample, air may be injected while theliquid is under pressure, the bubbles beingreleased when the pressure is reduced(dissolved air flotation). Aeration may takeplace at atmospheric pressure (airflotation) or the water may be saturatedwith air at atmospheric pressure and avacuum applied to release the bubbles(vacuum flotation). In all cases, chemicalsfor flocculation and coagulation are usuallyadded before flotation;

• coalescing filters, which agglomerate smalloil particles thus enhancing the rate atwhich oil rise to the surface of wastewater.The filter media is made up of plasticchips that have the correct surfaceproperties to attract oil particles from thewaste water stream allowing agglomerationand release.

For the removal of metals and inorganics:• chemical precipitation is a process by

which metals in solution can be removedusing alkaline compounds, such as lime or

sodium hydroxide, followed bysedimentation, clarification and filtration.Lime also precipitates phosphates asinsoluble calcium phosphates and fluoridesas calcium fluoride. Sodium sulphide allowsfor the removal of metals by theprecipitation of insoluble metal sulphidesand calcium carbonate and carbon dioxidecan remove metals as carbonates. Lime iswidely used in the steel industry, as thistechnique operates under ambientconditions, has relatively cheap andavailable raw materials and is easilyautomated. Although the process producesclean water, it also generates a metalbearing sludge that should be recycled ordisposed of in a safe manner, such as in awell designed landfill.

For the removal of organics:• biological treatment is used to coagulate

and remove soluble organics and may bebased on the activated sludge system or,less frequently, other systems such asrotating biological discs, which are undertest by the steel industry. The activatedsludge process works by stabilising wastewater using micro organisms in an aerobicenvironment, achieved by diffused ormechanical aeration of the waste water inan aeration tank.There is a constant bleedfrom the aeration tank to the settling tankthat allows for the separation of thebiological mass from the waste water, afterwhich the waste water is sufficiently cleanfor discharge. Some systems may alsoincorporate an anaerobic stage to enhancethe removal of nitrogen from the system.Following separation, the majority of thebiological mass is returned to the aerationtank, but a small portion is removed anddisposed of or recycled to the coking plant.The system is generally insensitive tonormal fluctuations in hydraulic andpollutant loading, although certainpollutants, for example ammonia at highconcentrations and heavy metals, can beextremely toxic to the micro organisms in

36 Implementation of the three dimensions of sustainable development

the system.Temperature will also influencethe metabolic activity of the microbiologicalpopulation, gas transfer rates and thesettling characteristics of the biologicalsolids.The method incurs relatively lowcapital and operating costs and is widelyused in the industry for coke plant wastewater treatment;

• carbon adsorption with activated carbon isan extremely efficient method for removingorganics from waste water. In general, lesssoluble and relatively small organicmolecules are most easily adsorbed bycarbon, including most aromaticcompounds, chlorinated non-aromatics,phenol, pesticides, and high molecularweight hydrocarbons.The adsorptionprocess is reversible, allowing the usedcarbon to be regenerated by theapplication of steam or a solvent. Heatingmaterials such as almond, coconut, walnuthusks and coal produces activated carbon.The process relies on the large internalsurface area of activated carbon forefficient adsorption (500 to 1,500m2/g).The major benefits of carbon treatmentare its applicability to a wide variety oforganics and its high removal efficiency.Thesystem is compact and insensitive to widevariations in concentration and flow rate,but due to the relatively high capital andoperating costs its use is restricted to thefinal treatment of coke plant effluents,where particularly stringent legislationapplies.

For the removal of trace pollutants:• technologies such as ion exchange and

membrane separation have beendeveloped and applied when fresh water isin particular short supply.The ion exchangeprocess removes contaminant cations andanions using synthetic resins or byadsorption on to activated alumina. Sincemost ion exchange reactions are reversible,the medium can be reused many timesbefore it must ultimately be replaced dueto irreversible fouling.The main application

area for the ion exchange process in thesteel works is in the preparation of indirectcooling water for use in boilers.There aremany alternative membrane processes suchas reverse osmosis, electro dialysis, ultrafiltration and nano filtration. Membraneprocesses are usually used for desalinationand for removal of specific ions that aredifficult to remove by other means. Manyattempts have also been made to applymembrane processes to the reuse of wastewater.

2.3.2.4 Energy conservationThe steel industry is a major user of energy. InJapan, steel accounts for 10% of total energyconsumption and in Germany for 5.7%.However, indicative of many national industries,the energy consumed in the German industryto make one tonne of steel has fallensignificantly from 29 GJ/tonne, in 1960, toabout 22 GJ/tonne in 1989.This has beenachieved by concentrating production at asmaller number of sites and increasing capacityof the process units, made possible by theintroduction of technologies such as the backpressure blast furnace and oxygen steelmaking.Thus, the number of blast furnaces and steelplants has been reduced over time to onequarter and one-fifth of their previous numberrespectively.

About 95% of an integrated works’ energyinput comes from solid fuel, primarily coal, 3%to 4% from gaseous fuels, and 1% to 2% fromliquid fuels. However, approximately three-quarters of the energy content of coal isconsumed in the reduction reaction thatconverts iron ore to iron in the blast furnace.The remainder provides heat at the sinter andcoking plants and, in the form of by-productgas, to the various downstream process stages.

The quantities of liquid and gaseous fuels usedalongside the by-product gases in thedownstream process stages depends on theoverall works energy balance.Thus, by-productgases from the coke oven, blast furnace and

Implementation of the three dimensions of sustainable development 37

steelmaking typically contribute 40% to totalenergy and are used either as a direct fuelsubstitute or for the internal generation ofelectricity.The efficient utilisation of theseinternally generated energy sources is criticalto the overall energy efficiency of a works,requiring that the complex relationshipsbetween the different generating andconsuming facilities are understood.

2.3.2.5 Resource conservationWhen iron ore is converted into finished steelproducts, some iron units are ‘lost’ in theprocesses that are inevitably less than 100%efficient Thus, the production of one tonne ofsteel in an integrated plant requires severaltimes that quantity of raw materials.

A measure of the efficiency of individual orgroups of processes is the yield, defined as thequantity of material leaving a processexpressed as a fraction of the materialentering, or the mass of product divided bythe crude steel necessary to make thatproduct.While the phrase ‘yield loss’ is widelyused, its literal translation is misleading becausethe majority of the material comprising the‘loss’ can often be recycled as feed to anearlier process stage.

Yield losses occur at all the main processstages, from material handling through iron-and steelmaking to the subsequent operationsof casting, rolling and coating. Some loss isinevitable, although studies revealing the widevariation in yield performance betweencountries suggest that not all producers haveimplemented best technology and methods.For example, an IISI global survey showed thatbetween 1961 and 1987 yields for hot rolledproducts in Japan rose from 77% to over 85%,while yields for the same process during thisperiod in the former USSR remained static ataround 70%.Table 5 shows the range of yieldsbeing achieved by steelmakers for the majorprocesses in 1991.

As indicated above, scrap steel can be 100%recycled back into the process route and intonnage terms is the world’s most recycledmaterial. Actual scrap recycling rates of over80% are achieved on a world basis and over40% of all steel is manufactured usingprocesses that consume scrap as the primaryinput material (for example the EAF and openhearth). Scrap use is also an essential aspect ofsteelmaking BOF process that requires about10% to 30% of scrap as a feed material tooperate correctly. As such, steel scrap is a

38 Implementation of the three dimensions of sustainable development

Process Range of yields (%)BOF steelmaking 86.0 - 95.0EAF steelmaking 85.0 - 92.5Slab concast 84.9 - 98.0Bloom concast 82.3 - 97.6Billet concast 76.7 - 99.0Hot rolled coil 84.5 - 98.8Cold rolled coil 82.4 - 93.8Tinplate 83.4 - 97.3Plate 74.1 - 94.8Sections 78.4 - 97.5Wire rod 88.0 - 98.6Straight bar 85.5 - 97.3

Table 5: Range of yields for processes and products

valuable and necessary raw material, and onethat is returned to the steelmaker through asophisticated and often independent recyclinginfrastructure.

The technology for steel recycling is wellproven and based on the magnetic propertiesof iron and steel for its separation from non-metallic/nonferrous contaminants. In addition,scrap processing technologies involving theshredding and subsequent separation of scrapcomponents have resulted in an increase inthe recyclability of products as diverse asautomobiles and beverage cans.

Obviously, the EAF producers have alwayssourced the majority of their scrap feed fromexternal sources, but increasingly theintegrated producer is having to do the sameas the quantity of internally generated scrap isfalling as yields improve. For example, inGermany the introduction of continuouscasting has cut the quantity of in-plantgenerated scrap by two thirds.

By recycling nearly 300 million tonnes of scrapeach year (not including internally generatedscrap), the steel industry:

• does not have to extract 475 milliontonnes of natural iron bearing ore,

• saves energy equivalent of 160 milliontonnes of hard coal,

• avoids the emission of 470 million tonnesof carbon dioxide.

While the large quantities of by-products andwastes associated with the production of ironand steel have been progressively decliningover the past 30 years, responsiblemanagement of both types of material remainsan important and challenging task. If internallygenerated scrap is counted as a by-product,the industry currently recycles about 90% ofall its by-products and wastes. Blast furnaceslag accounts for 54% by volume of allintegrated site by-products.The remaindermade up of steelmaking slag (21%), specialslags from pre-treatments (6%) andconstruction and refractory wastes such asused furnace lining bricks (7%).

Particulate matter and sludge from operationssuch as gas scrubbing have increased over thelast ten years and account for 7% of the total.Other materials include coarse scale (theoxidised skin on hot steel surfaces) andmillscale that, together, account for about 5%of total by-products and wastes.

Although the industry successfully recycles orreuses a large proportion of the wastes andby-products arising form the steelmakingprocess, there are still major efforts tovalourise the more difficult materials. Thiseffort will bring both environmental andeconomic benefits.

Implementation of the three dimensions of sustainable development 39

40 Iron and Steel

3.1 Strategies3.1.1 Management systemsEnvironmental issues are now so numerous,complex, interconnected and continuouslyevolving that an ad hoc approach to problemsolving is no longer considered effective. Asystematic approach to management isrequired. A formal environmental managementsystem (EMS) provides a decision-makingstructure and action programme to supportcontinuous improvement in environmentalperformance.The ISO 14001 standardprovides a basis for steel companies to havetheir EMS programmes certified.

A survey of EMS programmes was completedby IISI in 2000.The study looked at the currentstatus of environmental management systemsin the iron and steel industry with an aim tobenchmark the current development, and offera best practice for those companies about toundertake the implementation of a system. Aspecial questionnaire was circulated to themembers of IISI’s Committee on Environment.

The role of EMS in the iron and steel industryis becoming increasingly significant in customer,supplier, public and regulatory relationships, asthe steel product reaches a wider audiencethrough a more informed awareness. EMS, andespecially the auditing aspects, are a tool forthe industry to control and improve theimplemented system, and are widespread inthe industry, with 80% of the companiesoperating one.

The 30 companies responding to this surveyrepresent 24% of the total world productionof steel in 1999, (~187 Mt), and cover mainlythe integrated works, therefore the EAFoperators, and particularly stainless steel andspecial steels, are under-represented. Regionalvariations are found to be slight, mainly due tothe number of responses in each regionmaking sound statistical comparisons difficult.Differences were apparent between integratedand EAF works, however larger numbers ofEAF responses are required to allow a moresignificant comparison.The results andfollowing analysis should be considered withthese points in mind.

In terms of the EMS in place, only 37% arecertified to international standards, however,the certification process is not considered anobstacle to gaining the standard, instead a lackof resources is to blame (manpower for thelarger operators, and financial for the smaller(generally EAF) operators). 50% of thosesystems uncertified intend to certify them toISO or other standards.

The application of the EMS is most commonat the highest level of the company, but thereis a significant regional variation betweenEurope and South America, where six out often companies in South America have theirsystem at company level, compared with onlyone out of ten in Europe – the systems aregenerally spread throughout the company.Europe also has the highest number ofcompanies not operating an EMS.

Means of implementation 41

Part 3: Means of implementation

Baoshan Iron and Steel Co. Certified to ISO 14001

Shanghai Boasteel Group Corporation (SBGC) pays great attention to environmental protection.Baoshan Iron & Steel Co., a company of SBGC, is the first to obtain the environmental certificateof ISO14001 among the metallurgical enterprises in China. Its green coverage in plant area is upto 38.12%, which makes its air quality the same level as that in national scenery spots.

The automotive sector, of all the sectorsindicated by the companies as the area fromwhich most revenue is received, showed thelowest degree of EMS implementation.Thecustomer and regulatory pressures experiencedin iron and steel industry – particularly in thissector – make this result surprising.

The companies indicated that in 72% of thecases, products were included in the EMS,however in terms of the supplier, 53%indicated that they have requirements as partof the EMS.

In terms of auditing, 77% of companies carryout internal audits, with a spread at the variouscompany levels, and are generally once a yearin frequency. Average sizes of the audit teamsare three to four people, with the averagenumber of days a year for the audits being 31,44, 51, and 14 for the company, site, businessunit, and production unit respectively.Theaverage number of auditors per company is24, with the average proportion that areaccredited at 20%. Only one company(Europe) has only external auditors.

Environmental performance is considered themost important factor for reducing air andwater pollution and recycling waste.Performance targets are generally reviewedevery year.The reasons for revision of thetargets are mainly ‘relevant regulations’,followed by the environmental impacts ofvarious aspects of the process. Checking thetargets takes place widely across all companies,and at all levels, particularly on an annual andmonthly basis. On the whole, the head of the

particular company level establishes thetargets, but the share evens out at the businessunit and production unit level where othermanagers and most likely, environmentalpersonnel, are involved.

3.1.2 Product stewardshipSteel’s distinctive environmental fingerprint hasmany advantages. More than half of the steelwe see around us has already been recycledfrom scrap.This valuable material – from oldcars, buildings, and steel cans, for example – isa powerful energy and resource saver. It takesat least 60% less energy to produce steel fromscrap than it does from iron ore.Wastedisposal problems are lessened because usedsteel can be recycled over and over.Sooner or later, virtually all scrap gets back tothe steel mill.

Steel’s established recycling loop and the easewith which scrap is reclaimed through steel’snatural magnetism helps today’s designersmake end-of-life recycling a vital part ofproduct planning. Steel beverage cans maybecome new steel in a matter of weeks; carsmay take ten to 15 years; buildings and bridgesnearly a century. But sooner or later virtuallyall scrap gets back to the steel mill.

Steel is the world’s most versatile material torecycle. Other less flexible materials must berecycled back to their original uses. But oncerecycled, steel can hop from one product toanother without losing its quality. Steel fromcans, for instance, can as easily turn up inprecision blades for turbines or super strongsuspension cables.

42 Means of implementation

New steel casting technology

Nucor Corporation is constructing the first commercial Castrip(tm) facility in Crawfordsville,Indiana, (United States), to produce thin-strip sheet steel. Strip casting involves the direct castingof molten steel into final shape and thickness without further hot or cold rolling, allowing lowerinvestment and operating costs, reduced energy consumption and smaller scale plants than canbe economically built with current technology.The facility is expected to be operational in 2002and have a production capability of up to 500,000 tonnes per year of hot rolled coil.

Every year steelmakers recycle nearly 385 million tonnes of steel.This is equivalentto more than 1,055,000 tonnes each day,44,000 tonnes each hour, and 12 tonnes eachsecond. In the 60 seconds it has taken you toscan this page, steelmakers around the worldrecycled more then 700 tonnes of steel.

3.1.3 Steel productionIncreased energy and resource efficiency insteel production will bring significant advancesin the sustainability of the steel industry.Thesegains in efficiency result from achievements inoptimising current production methods andfrom the introduction of new technologies.

In the recent IISI study Energy Use in the SteelIndustry, case studies of four steel productfacilities indicated reductions in energyconsumption has been in the order of 25%since the mid-1970s.The report suggests thefuture may bring energy consumption figuresof 12GJ/t of steel, a savings of about 60% from current values, although this is noteconomically or technically feasible today.

One focus of technology development issteel strip casting. Strip casting involves thedirect casting of molten steel into solid stripsteel, bypassing the need for hot and coldrolling to obtain the final shape and thickness.The introduction of this technology willreduce energy demand to 0.2GJ/t, or areduction of 81% to 89% compared withconventional casting and hot rollingtechnologies.(5) Strip casting is expected toalso have lower capital and operating costsand result in steel products with newmetallurgical properties.

3.1.4 EconomicsEarlier this year IISI issued a call for animmediate start of inter-governmentalnegotiations on steel. A positive response fromgovernments led to the convening of a highlevel meeting at the OECD in September.Governments from around the world metagain in December 2001 to report back on

the results of discussions that they have heldwith their individual industries.

Steel industry leaders recognise that it is theirresponsibility to improve the financialperformance of the industry by implementingthe changes in industry structure andbehaviour that are required.The now globalnature of the steel business requires furtherurgent and major changes in the size andscope of individual steel enterprises and theyneed clear support of governments to movequickly in this direction.

The board of directors restated that decisionsto close steel plants and to invest in newcapacity is the responsibility of individual steelenterprises.There are, however, importantareas where governments can help theindustry.These are:

• assistance with the past and present socialand environmental problems associatedwith the permanent closure of plants;

• the elimination of all state aid and subsidieswhich help to maintain existing plants;

• the elimination of state aid or stateguaranteed loans for new capacity;

• support for an open and fair trading systemin steel rather than self-sufficiency;

• competition policies based on global ratherthan national or regional competitioncriteria to allow the internationalconsolidations and alliances required;

• support for the provision of faster, moretransparent information on trade,shipments, price, inventories and capacities.

3.2 MeasuresAt the time of writing this report, there are noagreed measures of sustainable developmentfor the world steel industry. Indeed, thissituation is not unique to the steel industry, orfor that matter to industry, government andcivil society. However, as part of its currentsustainable development programme, IISI willconsider measures, or indicators, of sustainable

(5) Wechsler, Richard L.; “TheStatus of Twin-Roll CastingTechnology, Comparison withConventional Technology”; IISI-35 Conference, Seoul, 7-10October 2001.

Means of implementation 43

development that might be recommended tothe world steel industry and tracked on aworldwide basis.

For this report, the measures ofimplementation of sustainable developmentare divided into measures of environmentalperformance, measures of social performance,and measures of economic performance.Examples of the world steel industry’sperformance are presented.

3.2.1 Measures of environmentalperformanceRelevant measures of environmentalperformance include energy efficiency,resource efficiency, and releases to air, water,and ground. It is in this regard that the worldsteel industry has comprehensive worldwidedata in the form of a life cycle inventory (LCI)study. LCI is a quantitative analysis of the inputs(resources and energy) and outputs (products,co-products, emissions) of a product system.For more information on life cycle assessment,and life cycle inventory, the reader is referredto the ISO 14040, ISO 14041, ISO 14042, andISO 14043 standards.

In 1995 IISI undertook the first worldwide LCIstudy for the steel industry.This study includeda ‘cradle to gate’ analysis of steel production,from the extraction of resources and use ofrecycled materials through the production ofsteel products at the steel works gate.Theresults for hot rolled coil are presented in table6 (opposite), where the hot rolled coil here issteel continuously cast at an integrated steelplant and rolled to reduce thickness (andelongate the continuously cast steel slab intostrip) in the hot strip mill. It can be noted theseresults are derived from a survey of steelworks around the world, and these results inparticular, represent a global average of 1994-1995 data from some 25 sites.

Interpreting the LCI results for resource andenergy efficiency, it can be said to produce 1kgof hot rolled coil at an integrated works, we

would expect the average resourceconsumption to include 0.59kg of coal, 1.4kgof iron ore, 0.14kg of steel scrap, and 12L offresh water. In terms of energy consumption, atotal energy of 24.8MJ is required, of whichmost can be classified as non-renewable fuelenergy.

Producing 1kg of hot rolled coil results inemissions to air, water and land as well.Emissions to air include 1,911g of carbondioxide, 2.2g of nitrogen oxides, 1.5g ofparticulates, and 2.2g of sulphur oxides.Emissions to water include 0.3g of chlorides,0.05g of nitrogen and 0.2g of suspended matter.

The total waste generated from producing 1kgof hot rolled coil amounts to 0.2kg.

An example of the LCI results for producing1kg of rebar/wire rod/engineering steel fromthe electric arc furnace processing route isgiven in table 7. As described earlier in thisreport, electric arc furnace steelmaking usesrecycled steel as its main source of iron.Electric arc furnace steelmaking and integratedsteelmaking (using iron ore and recycled steel)have a symbiotic relationship as integratedsteelmaking does not consume the worldsupply of recycled steel while electric arcfurnace steelmaking requires a supply ofrecycled steel that would be limited withoutnew steel being made.

As with the results for hot rolled coil fromintegrated steelmaking, the results forrebar/wire rod/engineering steel are based on1994-1995 data.

To produce 1kg of rebar/wire rod/engineeringsteel, considering ‘cradle to gate’ and a globalaverage of surveyed sites, it can be seen thatthe largest resource requirement is 1.07kg ofrecycled steel, followed by 0.075kg oflimestone, 0.075kg of coal, 0.0583kg of oil and0.0556kg of natural gas. About 7.2L of freshwater is required.The total energyrequirement is 11.8MJ.

44 Means of implementation

(r): Raw material in ground,(a): Airborne emissions,(w):Waterborne emissions* A full listing of IISI LCI datacontains 450 articles, onlymajor articles are shown here.

Means of implementation 45

Inputs: Major Articles* Units Average(r) Coal kg 0.589(r) Dolomite (CaCO3.MgCO3) kg 0.0250(r) Iron (Fe, ore) kg 1.43(r) Limestone (CaCO3) kg -0.0077(r) Natural Gas kg 0.0402(r) Oil kg 0.0469(r) Zinc (Zn, ore) kg 0.0000Ferrous Scraps (net) kg 0.135Fresh Water (total) litre 12.0

Table 6: LCI results for 1kg of hot rolled steel coil (global average)

Outputs: Major Articles* Units Average(a) Carbon Dioxide (CO2, fossil and mineral) g 1911(a) Carbon Monoxide (CO) g 26.4(a) Nitrogen Oxides (NOx as NO2) g 2.18(a) Particulates (total) g 1.46(a) Sulphur Oxides (SOx as SO2) g 2.19(w) Ammonia (NH4+, NH3, as N) g 0.1043(w) Chlorides (Cl-) g 0.30(w) Chromium (Cr III, Cr VI) g 2.00E-05(w) COD (Chemical Oxygen Demand) g 0.188(w) Cyanides (CN-) g 1.05E-03(w) Fluorides (F-) g 0.0209(w) Iron (Fe++, Fe3+) g 1.44E-02(w) Lead (Pb++, Pb4+) g 1.28E-04(w) Nickel (Ni++, Ni3+) g 9.34E-05(w) Nitrogen (total except ammonia, as N) g 0.0492(w) Phenol (C6H6O) g 5.20E-03(w) Phosphates (PO4 3-, HPO4—, H2PO4-, H3PO4, as P) g -1.72E-03(w) Phosphorus (total except phosphates, as P) g 6.73E-04(w) Sulphides (S--) g 0.131(w) Suspended Matter (unspecified) g 0.188(w) Water litre 8.31(w) Zinc (Zn++) g 2.90E-03Non Allocated By-products (total) kg 0.0584Waste (total) kg 0.204

Energy Reminders: Major Articles* Units AverageTotal Primary Energy MJ 24.8Non Renewable Energy MJ 24.5Renewable Energy MJ 0.352Fuel Energy MJ 24.7Feedstock Energy MJ 0.126

(r): Raw material in ground,(a): Airborne emissions,(w):Waterborne emissions* A full listing of IISI LCI datacontains 450 articles, onlymajor articles are shown here.

46 Means of implementation

Inputs: Major Articles* Units Average(r) Coal kg 0.0750(r) Dolomite (CaCO3.MgCO3) kg 8.09E-04(r) Iron (Fe, ore) kg -0.0101(r) Limestone (CaCO3) kg 0.0750(r) Natural Gas kg 0.0556(r) Oil kg 0.0583(r) Zinc (Zn, ore) kg -3.63E-03Ferrous Scraps (net) kg 1.068Fresh Water (total) litre 7.19

Table 7: LCI results for 1kg of rebar/wire rod/engineering (global average)

Outputs: Major Articles* Units Average(a) Carbon Dioxide (CO2, fossil and mineral) g 558(a) Carbon Monoxide (CO) g 2.37(a) Nitrogen Oxides (NOx as NO2) g 1.53(a) Particulates (total) g 0.213(a) Sulphur Oxides (SOx as SO2) g 1.98(w) Ammonia (NH4+, NH3, as N) g -7.85E-04(w) Chlorides (Cl-) g 0.287(w) Chromium (Cr III, Cr VI) g 2.79E-05(w) COD (Chemical Oxygen Demand) g 0.0314(w) Cyanides (CN-) g 2.52E-06(w) Fluorides (F-) g 0.0177(w) Iron (Fe++, Fe3+) g 1.45E-03(w) Lead (Pb++, Pb4+) g 9.22E-05(w) Nickel (Ni++, Ni3+) g 6.88E-05(w) Nitrogen (total except ammonia, as N) g -1.13E-03(w) Phenol (C6H6O) g 3.08E-05(w) Phosphates (PO4 3-, HPO4—, H2PO4-, H3PO4, as P) g 8.00E-03(w) Phosphorus (total except phosphates, as P) g 0.0650(w) Sulphides (S--) g -1.83E-04(w) Suspended Matter (unspecified) g 0.0319(w) Water litre 5.87(w) Zinc (Zn++) g 1.93E-04Non Allocated By-products (total) kg 0.118Waste (total) kg 0.0558

Energy Reminders: Major Articles* Units AverageTotal Primary Energy MJ 11.8Non Renewable Energy MJ 10.9Renewable Energy MJ 0.93Fuel Energy MJ 11.3Feedstock Energy MJ 0.57

For air emissions, 558g of carbon dioxide isemitted, 1.98g of sulphur oxides, 1.53g ofnitrogen oxides, and 0.2g of particulate.Emissions to water include 0.287g of chlorides,0.065g of phosphorus, and 0.032g ofsuspended matter.

The total waste generated is 0.06kg for 1kg ofrebar/wire rod/engineering steel.

In interpreting these results, it is important tokeep in mind that the inputs and outputs donot all occur at the steel works site. As theLCI results are ‘cradle to gate’, the resultspresented here include inputs and outputsfrom upstream processes, such as iron oremining, coal mining, oil production andelectricity generation. In fact, the inputs andoutputs are related to locations around theworld and to varying times as well.

In 2002, IISI will complete its secondworldwide LCI study of steel products. Amongother uses, the results of this second study canbe benchmarked against the first study to

gauge changes in energy and resourceefficiency and releases to air, water, andground.

More information on the IISI LCI work can be found at the IISI Web sitehttp://www.worldsteel.org.

3.2.2 Measures of social performanceOne measure of the world steel industry’ssocial performance is health and safety ofpeople employed in the steel industry.Currently, compiled statistics for the worldindustry are not available, though this is anaction under investigation by IISI.

Though worldwide data on health and safety isnot available, some regional data is presentedhere. In figure 12, the total recordable injuriesof reporting steel companies belonging to theAmerican Iron and Steel Institute (AISI) aregiven for 1994 through 2000.The totalrecordable injury rate, per 200,000 manhours,decreased 36% from 1994 to 2000.

Means of implementation 47

0

2

1994 19961995 1997 1998 1999 2000

4

6

8

10

12

14

Total recordable injuries(per 200,000 manhours)

Source: AISI and AK Steel

Figure 12: Total recordable injuries for all American Iron and Steel Institute(AISI) reporting steel companies

A measure of the impact of steel on theworld’s social condition is the apparentconsumption per capita.This statistic might beconsidered one indication of a country’sprosperity with the notion that greater steelconsumption per capita is a sign of economicprosperity.Table 8 gives the per capitaapparent steel consumption for selectedcountries for the year 1999.The world averagefor apparent steel consumption per capita is138.2kg.

It can be noted in general that moreindustrialised countries utilised between 250kgand 600kg of steel per person. Developingcountries use less steel per capita, withexamples being China at 107kg/capita, Brazil at99kg/capita and South Africa with 81kg/capita.South Korea and Taiwan, China top the list.South Korea registers 757kg/capita, whileTaiwan, China tops the list at 1,109 kg/capita.

3.2.3 Measures of economicperformanceTwo measures of economic performance arerevenue and income.Table 9 (page 50)provides the revenue and income for 19 ofthe 20 largest steel producers in the world

based on the latest available annual results. Itcan be seen that 14 of the 19 listedcompanies posted a profit, although for somecompanies posting a profit their income as apercentage of revenue is quite low andunattractive to the financial community whencompared with investment opportunities inother industries.The companies listed includesix based in the EU, four based in Japan, threebased in the United States, two based inRussia, and one each based in China,Taiwan,China, India, and South Korea.

When reading table 9 one has to bear in mindthat accounting practices differ around theworld and between companies. It is notnecessarily reliable to compare the results ofcompanies operating in different jurisdictions.Additionally, some of the listed companiesoperate businesses in addition to steelmanufacturing and the results of thesebusinesses are included in the parent companyresults. As a further caveat, some companieshave significant state ownership, while othershave no state ownership.The intent ofpresenting the results is to provide a broad,and admittedly insufficient, indication of thefinancial health of the world steel industry.

48 Means of implementation

Nothing will ever matter more to us

AK Steel, headquartered in Middletown, Ohio (United States), is one of the nation’s leaders increating and maintaining a safety culture throughout the company. Besides its comprehensiveworkplace safety programmes, the company emphasises its safety performance in its annualreports to stakeholders and other public reports. AK Steel’s safety programme has three majorelements: a complete management commitment to safety, a strong employee and contractorsafety programme and extensive employee participation in the most comprehensive safetytraining and awareness programmes in the steel industry. AK Steel’s total recordable injuries in2000 was 1.43 per 200,000 manhours, compared with 7.90, the average of all AISI reportingsteel companies.

Means of implementation 49

Country Apparent steel consumption per capita(kg crude steel, 1999)

Taiwan, China 1,109.1South Korea 756.7Canada 604.4Japan 557.3Italy 552.3Austria 537.7Spain 469.3Germany 468.7United States 458.0France 325.5United Kingdom 265.9Poland 204.6Turkey 188.8Russia 132.6Mexico 122.5China 107.6Brazil 99.4South Africa 80.9Ukraine 61.4India 30.1World 138.2

Table 8:Apparent steel consumption per capita for selected countries

Source: IISI

(1) Arbed, Usinor and Aceraliawill merge in 2002 to becomeArcelor

50 Means of implementation

Company Reporting Period Revenue Income(year end) (million USD) (million USD)

Arbed S.A.(1) 12/2000 13,372 418Bethlehem Steel Corporation 12/2000 4,197 -118China Steel Corporation 12/2000 3,044 562Corus Group plc 12/2000 17,491 -2,017Ispat International N.V. 12/2000 5,097 99Kawasaki Steel Corporation 03/2001 10,414 -144Magnitogorsk Iron and Steel Works 12/2000 1,520 447Nippon Steel Corporation 03/2001 21,772 210NKK Corporation 03/2001 14,148 768Nucor Corporation 12/2000 4,586 311Pohang Iron and Steel Co., Ltd 12/2000 10,873 1,289Riva Group 12/2000 4,415 256SeverStal 12/2000 2,073 453Shanghai Boasteel Group Corporation 12/2000 8,228 187Steel Authority of India 03/2001 3,639 -156Sumitomo Metal Industries 03/2001 11,855 46ThyssenKrupp AG 09/2000 32,710 463United States Steel Corporation 12/2000 6,132 -21Usinor Group(1) 12/2000 14,814 775

Table 9: Revenue and income for the top steel producing companies.

Source: Hoovers Online and company annual reports

Future challenges and goals 51

4.1 Priorities forimprovement and futurework programmeThe world steel industry has made greatstrides in sustainable development by providingproducts and services valued by society,increasing resource and energy efficiency,reducing emissions to air, water and land,adding economic value to the world economy,providing safe and healthy work environments,and being responsible participants in localcommunities. Even with the tremendousamount of work that has been done, there stillremain opportunities for improvement in theperformance of the world steel industry in allthree aspects of sustainable development;economic, environmental and social.

Improvement will come largely from the workof the world’s steel companies and theircollaborative ventures within and outside theindustry. Accordingly, companies with regard totheir individual circumstances will set prioritiesfor improvement, and where prioritiescoincide, with their partners and stakeholders.

Some priorities being considered, in noparticular order, include:

• financial sustainability of steel companies.Sound financial health of companies, andthe industry as a whole, is a fundamentalrequirement for sustainable development;

• co-operation with governments to addressovercapacity and international trade;

• new steelmaking technologies to increasethe resource and energy efficiency of steelmanufacturing;

• development of new steels and processesto meet customer needs for affordable,safe, strong, and versatile materials that alsorespect the environment;

• development of measures to gaugeprogress with sustainable development;

• education, training, and benchmarking tobuild capability with respect to sustainabledevelopment;

• health and safety of workers;• community development;• reduction of releases to the environment,

including gases leading to climate change;• communicate sustainable development

activities of the world steel industry.

At its 9 December 2001 meeting, the board ofdirectors of IISI, consisting of about 60 chiefexecutive officers of steel companies fromaround the world, renewed its support forsustainable development by declaring it to beone of IISI’s core objectives.The board ofdirectors provided IISI with a mandate toprovide leadership for the world steel industryregarding sustainable development. In practice,it means incorporating sustainabledevelopment into the work of the IISI,supporting those steel companies alreadyactive in sustainable development, and helpingto build capabilities in those companies lessfamiliar with sustainable development.

To this end, a steering group has been workingto prepare recommendations to meet thechallenge set forth by the board of directors.The recommendations will be presented tothe spring 2002 meeting of the board and, ifapproved, will form the basis of a concertedeffort by the world steel industry to forwardsustainable development on a collective basis.Apart from the IISI initiative, individual steelcompanies and regional steel organisations willcontinue existing, and initiate, sustainabledevelopment activities.

Part 4: Future challenges and goals

Annexe 1: IISI policystatement onenvironmental principles

ForewordThe board of directors of the InternationalIron and Steel Institute (IISI) approved thisnew statement on the Environment at itsmeeting in London on 13 April 1992.The steelindustry is proud of its achievements onenvironmental protection over the last 20years since the first IISI Statement on theEnvironment was published in 1972.This newstatement underlines the priority which steelcontinues to give to sustainable developmentand sets out the principles that lead toenvironmental excellence in the operation ofour industry.Brian Loton, chairman IISI 1991-1992Chairman, BHP, Melbourne, Australia

PreambleThe member companies of the IISI have longrecognised their responsibility to conductproduction operations in a manner thatprotect the environment and contributestowards the objectives of sustainabledevelopment -a concept that involves meetingthe needs of the present compromising theability of future generations to meet their ownneeds.The first IISI Statement on theEnvironment was published in 1972. Since thenmuch has been accomplished. It is estimatedthat in the last decade, over 10% of the totalexpenditure by the steel industry has been onenvironmental control – a sum of close toUSD20,000 million on protection of theenvironment.

Steel as a material has also made a majorcontribution to sustainable development in theconstruction of environmental protectionsystems, infrastructure and energyconservation systems. Steel products are‘environmentally friendly’ and are not only

compatible with, but also critical to, the successof sustainable development. On average, about40% of all steel produced is sourced fromsteel scrap. Steel uses less energy per tonne toproduce than many competitive materials.

Environmental protection initiatives andimprovements will continue to be a majorelement of iron and steel operations for theforeseeable future. Sustainable development isa complex subject that involves not onlyenvironmental protection, but also issues sucheconomic prosperity, population growth andpoverty. Relative priorities and relationshipsmust be established if progress continues.

Statement of policyThe member companies of IISI are committedto providing leadership in achieving a highstandard of environmental care whilecontributing to the needs and prosperity ofsociety through the production of steel.

PrinciplesIISI believes that environmental excellence isfurthered by the following principles:

1 Sustainable developmentApply the principle of sustainable development tothe steel industry.This involves working together to take a long-term global view of environment, economy andsocial integration.These principles should beincorporated into business decision making atall levels and throughout the live cycle of theprocess and products. Sustainable developmentshould be seen as an opportunity as well as achallenge. IISI recognises that different countriesand steel firms are evolving towards these goalsin different ways.

2 Decision makingIncorporate sound science, risk assessment andcost/benefit analysis to establish priorities andstandards for continuous and fundamentalimprovement that are equitable reasonable andto identify the most cost-effective application ofresources.

52 Annexe 1

These principles apply to internal decisionmaking as well as public policy and legislation.

3 Environmental protectionSupport efforts to conserve and improve thequality of the environment by recognisingenvironment management as among the highestcorporate priorities and a key element ofsustainable development.This includes the creation and support of aninternal organisation to integrate effectiveenvironmental policies, programmes andpractices into each business actually as anessential element of sound management.

4 Environmental management systemsIncorporate innovative and progressiveenvironmental management systems to minimiseenvironmental impact.Examples include safe and responsible lifecycle management of chemicals and processes,environmental impact assessment planning fornew processes, best management practices,assessment of environmental performance,emergency response planning and productstewardship.

5 Environmental technologiesDesign, operate and maintain facilities andequipment to minimise environmental impact.This includes incorporating reasonablemeasures for pollution prevention at thesource through process or raw materialchanges, incorporating cleaner technologies,and using all reasonable care to controldischarges. Environmental considerationsshould be an integral part of the research,development and design stages through torecycling of used products and ultimatelydecommissioning of facilities.

6 Resource managementIncorporate the fundamentals of efficient resourceconservation and waste reduction, reuse, recycleand recovery into all elements of operations andproducts.Examples include scrap recycling, slag andoxide reuse and recycle, coke by-product

reuse and material and energy conservationthrough yield improvements.

7 Energy managementConserve and make the most efficient use ofenergy to reduce the production of greenhouseand acid gases and thereby improve theenvironment.Although the mechanisms and impact of globalwarming are not yet confirmed or clear,prudent and reasonable conservationmeasures can be taken now based upon costreductions and resource conservation.

8 Education, training and informationDevelop and promote mutual understandingthrough education, training and information forstakeholders, including directors, management,supervisors, employees, contractors, shareholders,suppliers, customers, government and thecommunity.These measures should be appropriate to theneeds and responsibilities of the stakeholders.This should be open, positive, proactive andincorporate a long-term global view.

9 Research, innovation and technicalcooperationSupport research, innovation and technicalcooperation that will result in continuousimprovement, technical breakthroughs andtechnologies.This development should be seen as anopportunity to transfer technology to otherfirms and countries to further environmentaland economic improvement on a global basis.

10 Government requirementsCo-operate with government in a responsiblemanner and contribute to the development ofcost-effective legislation and regulations that arebased upon sound science, technical possibilitiesand the true environmental and economicpriorities of the global community.Environment regulations require a balancing ofsocial, economic and environmental goals.Thehealth and environmental risks addressed byproposed regulations must be carefully

Annexe 1 53

quantified and then properly evaluated bycomparison with other natural and man-maderisks.The resolution of economic and socialconditions among nations including the use ofeconomic instruments should be consistentwith equity and harmonisation of theirenvironmental requirements. International co-operation and consensus is important andnecessary for successful implementation.IISI supports, in concept, the InternationalChamber of Commerce Business Charter forSustainable Development and the ICCEnvironmental Guidelines for World Industry.Many individual steel companies haveendorsed the Charter.

Annexe 2: IISI policystatement on climatechange

The steel industry’s position on the UNFCCC:

1. The steel industry is committed toincorporating the principles of sustainabledevelopment into all aspects of itsoperations and supports efforts tosafeguard and improve the environment(see IISI Statement on the Environment,IISI, Brussels, 1992).

2. The steel industry understands that thepresent state of knowledge and uncertaintyabout the relationship between carbondioxide levels and climate change arguesfor caution in the short term while furtherresearch in undertaken. Policy measuresshould be flexible and based on sound andrigorous scientific knowledge.

3. A global problem requires a globalapproach and should involve all countries.A carbon tax or other measures in somecountries, but not in others, will distortinternational trade and paradoxically couldlead to greater production of steel incountries with a higher level of carbondioxide emissions.The steel industrysupports consideration of the use offlexible mechanisms such as the principlesof joint implementation, clean developmentmechanisms and emissions tradingproposed by the Kyoto Protocol.The steelindustry will work to help develop the useof these mechanisms in a practical andpositive way.

54 Annexe 1

4. Measures that involve taxes on carbondioxide emissions from the steel industrywould not result in any significantreduction, but instead, in draining thefinancial resources of the sector, theywould impact negatively on the industry’sinvestment programme and research anddevelopment which represent the best wayfor the industry to meet the challenge ofsustainable development in the longerterm.

5. Policy for the steel industry should focuson voluntary programmes and incentivesto encourage greater energy conservationand efficiency and recognition of theinternational nature of the steel business.Voluntary action is effective because theindustry can develop and take measuresthat are both cost-effective and takeaccount of trends in technology.Theindustry seeks an active role in thedialogue between governments andindustry, which is essential for thedevelopment of a viable long-term strategyaddressing the issue of climate change.

Annexe 3: IISI policystatement on Life CycleAssessment

General remarksLife Cycle Assessment (LCA) is one of thetools increasingly being used to consider theenvironmental issues associated with theproduction, use, disposal and recycling ofproducts, including the materials from whichthey are made. An LCA is generally recognisedto consist of four phases – the establishmentof the goals and scope of the assessment, thedrawing up of an inventory of the input ofmaterials and energy and the output ofemissions for each stage of the product lifecycle, an assessment of the impact on theenvironment, and the identification of actionsfor improvement.

The techniques of LCA are in a very earlystage of development as a science.The resultsare often sensitive to the exact assumptionsmade. Environmental priorities and issues differin different societies and therefore the analysisis specific in both location and time.There is adanger in reducing complex issues to simplisticand partial analysis. Unfortunately many of theLCA studies published to date do not passreasonable criteria of objectivity.

LCA can be used to identify priorities forimprovements in process operations andproduct design and development, workingclosely with customers.The present state ofthe art and the sensitivity of results tosubjective assumptions demand extremecaution when using LCA to compare theimpact on the environment of alternativematerials.

The steel industry is committed to theconcept of sustainable development.This isillustrated by the IISI Statement on theEnvironment, which states that the highest

Annexe 2 55

standards of environmental care require thatthe principle of sustainable development isincorporated into all aspects of themanagement of our industry. It is thereforeessential that LCA studies should be correctlyplaced in the broader context of sustainabledevelopment.

To avoid the value of LCA being undermined,the steel industry has been very careful in itsuse – both in the undertaking of studies and inthe publication and interpretation of data andresults. A set of practical guidelines has beendrawn up which the IISI board of directorscommends to all those undertaking or usingLCA for the purposes outlined above.

Practical guidelines for those undertaking orusing LCA:

1. Maintain the highest standards in both theundertaking of LCA studies and theirdisclosure to both internal and externalaudiences.

2. Seek to place LCA within its broadercontext of sustainable development,recognising that this requires that dueweight must also be given to the impact onhuman health and safety, welfare, bio-diversity, the impact on individual eco-systems, the length of a product’s life andits recyclability, and the sustainable use ofnatural resources.

3. Support efforts to develop a consistent,rigorous and transparent methodology forLCA to enable society to make informedchoices on the environmental impact ofproducts and processes.

4. Support the collection and disseminationof data on the use and reuse of materials,and the environmental effects resultingfrom their production.

5. Publish data clearly in a form that allowsthe user to clearly identify the keyassumptions made and the sensitivity tothose assumptions.

6. Avoid the selective disclosure of results orthe use of data out of its original context.

7. Avoid the mixing of product comparisonsbased on actual current practice with thosebased on optimal performance at somefuture date.

8. Avoid claims of superior impact on theenvironment where the differencesbetween materials are likely to be withinthe margin of error of the key assumptions.

9. Support the development of standards forLCA, including the work of theInternational Organisation forStandardisation (ISO).

56 Annexe 3

• consulting engineering• electricity• fertilizer• finance and insurance• food and drink• information and

communications technology• iron and steel

• oil and gas• railways• refrigeration• road transport• tourism• waste management• water management

• accounting• advertising• aluminium• automotive• aviation• chemicals• coal• construction

UNEP contribution to the World Summit on Sustainable Development

The mission of the United Nations Environment Programme (UNEP) is to provide leadership andencourage partnerships in caring for the environment by inspiring, informing, and enabling nations andpeoples to improve their quality of life without compromising that of future generations. The UNEPDivision of Technology, Industry and Economics (DTIE) contributes to the UNEP mission byencouraging decision-makers in government, business, and industry develop and adopt policies, strategiesand practices that are cleaner and safer, make efficient use of natural resources, ensure adequatemanagement of chemicals, incorporate environmental costs, and reduce pollution and risks for humansand the environment.

This report is part of a series facilitated by UNEP DTIE as a contribution to the World Summit onSustainable Development. UNEP DTIE provided a report outline based on Agenda 21 to interestedindustrial sectors and co-ordinated a consultation process with relevant stakeholders. In turn,participating industry sectors committed themselves to producing an honest account of performanceagainst sustainability goals.

The full set of reports is available from UNEP DTIE’s web site (http://www.uneptie.org/wssd/), whichgives further details on the process and the organisations that made it possible.The following is a list ofrelated outputs from this process, all of which are available from UNEP both in electronic version andhardcopy:

- industry sectoral reports, including

- a compilation of executive summaries of the industry sectoral reports above;- an overview report by UNEP DTIE;- a CD-ROM including all of the above documents.

UNEP DTIE is also contributing the following additional products:- a joint WBCSD/WRI/UNEP publication entitled Tomorrow’s Markets: Global Trends and Their

Implications for Business, presenting the imperative for sustainable business practices;- a joint WB/UNEP report on innovative finance for sustainability, which highlights new and effective

financial mechanisms to address pressing environmental, social and developmental issues;- two extraordinary issues of UNEP DTIE’s quarterly Industry and Environment review, addressing key

regional industry issues and the broader sustainable development agenda.

More generally, UNEP will be contributing to the World Summit on Sustainable Development withvarious other products, including:- the Global Environmental Outlook 3 (GEO 3), UNEP’s third state of the environment assessment

report;- a special issue of UNEP’s Our Planet magazine for World Environment Day, with a focus on the

International Year of Mountains;- the UNEP photobook Focus on Your World, with the best images from the Third International

Photographic Competition on the Environment.

For further information contact:

International Iron and Steel Institute (IISI)Rue Colonel Bourg, 120B-1140 BrusselsBelgiumTel: +32 2 702 8900Fax: +32 2 702 8899E-mail: info@iisi.beWeb site: http://www.worldsteel.org

United Nations Environment ProgrammeDivision of Technology, Industry and Economics39-43 Quai André Citroën75739 Paris Cedex 15FranceTel: +33 1 44 37 14 50Fax: +33 1 44 37 14 74E-mail: wssd@unep.frWeb site: http://www.uneptie.org/wssd/

Sustainability profile of the Iron and Steel industry

• Achievements- Dramatically reduced releases to the environment from steel manufacturing operations, including a reduction of air

emissions by up to 80% over the last 20 years.- Introduced new production technologies and steel products to meet demanding applications, including advanced

lightweight steel automobiles, that contribute to a more sustainable society.

• Unfinished business- Continued improvement in steel production technologies and development of new products and services to meet

evolving societal needs.- Continued integration of economic, environmental, and social sustainability throughout the world steel industry.

• Future challenges and possible commitments- Operation of the world steel industry in an increasingly globalised economy, particularly the economic success of

companies.- Social change, including employment and community development, as the world steel industry transforms.