{"id":8943,"date":"2016-11-03T19:16:35","date_gmt":"2016-11-03T23:16:35","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/can-arcelormittal-steel-itself-against-climate-change-regulations\/"},"modified":"2016-11-04T15:12:09","modified_gmt":"2016-11-04T19:12:09","slug":"can-arcelormittal-steel-itself-against-climate-change-regulations","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/can-arcelormittal-steel-itself-against-climate-change-regulations\/","title":{"rendered":"Can ArcelorMittal Steel Itself Against Climate Change Regulations ?"},"content":{"rendered":"

Steel production and CO2 <\/sub>emission<\/strong><\/span><\/p>\n

Human activities over the past century have increased the amount of CO2<\/sub> in the atmosphere significantly.<\/p>\n

\"1\"<\/a><\/p>\n

Source: http:\/\/climate.nasa.gov\/vital-signs\/carbon-dioxide\/<\/a><\/p>\n

Increase in CO2<\/sub> in the atmosphere leads to an increase in the greenhouse effect and thus increasing temperatures on earth. Rising temperatures are the cause of rising water levels, melting of polar caps and erratic weather patterns.<\/p>\n

Around one fifth of the emissions<\/strong> <\/em>are from industries such as cement, iron and steel, chemicals and refining. Over the next few decades this is expected to grow with output. The process of making steel from iron ore involves heating the ore with carbon. Carbon dioxide is produced as a by-product of this process.<\/p>\n

\"2\"<\/a><\/p>\n

Source: http:\/\/www.cleanenergyministerial.org\/Portals\/2\/pdfs\/GlobalActiontoAdvanceCCS.pdf<\/a><\/p>\n

ArcelorMittal is the world\u2019s largest steel producer, with annual production capacity of approximately 114 million tonnes of crude steel. Steel shipments in 2015 totaled 84.6 million tonnes.\u00a0It has steelmaking facilities in 19 countries, and is the leader in all the main steel markets. A large number production sites for ArcelorMittal are present in Europe.[1]<\/p>\n

Regulations<\/strong><\/span><\/p>\n

The European Union uses the emissions trading system (EU ETS) as a primary tool to limit climate change. A\u00a0cap\u00a0is set on the total amount of certain greenhouse gases that can be emitted by installations covered by the system. Companies can\u00a0receive\u00a0or\u00a0buy emission allowances\u00a0which they can trade with one another as needed. They can also buy limited amounts of\u00a0international credits\u00a0from emission-saving projects around the world. After each year, a company must surrender enough allowances to cover all its emissions, otherwise heavy fines are imposed. If a company reduces its emissions, it can keep the spare allowances to cover its future needs or else sell them.[2]\u00a0While the steel industry has not been impacted by specific stringent regulations, there is a chance that in the future they will be asked to comply to emission norms which are tighter than the current norms.<\/p>\n

The implications of ETS and future regulations are multi- fold for European steel companies like ArcelorMittal.<\/p>\n