On Monday, July 15, Climate Group North America and SteelZero hosted a White House Roundtable on Clean Steel and Aluminum for Clean Vehicles. Our roundtable convened senior leaders from across the automotive, steel and aluminum industries to identify barriers to procurement and development of lower emission metals. We brainstormed solutions to these challenges and how to forge a path forward to implementation.
Barriers for automakers
Among the biggest barriers to implementation for automakers, we heard:
Costs: Significant costs and capital expenditure investments that are passed along to automakers. We heard the need for green steel and aluminum to be available at cost parity to existing materials.
Renewable Energy: Availability of renewable energy to support production of green aluminum and steel must be improved across the U.S. This includes green electricity and green hydrogen.
Supply/Scalability: Green materials must be available and capable of meeting automotive specifications for quality and safety. For aluminum, there's not a production ready source or technology of raw aluminum to meet the First Movers Coalition's goal of emitting , including all emissions from "cradle to gate" by 2030. For steel, we heard there are currently difficulties procuring materials in the United States that meet the First Movers Coalition's goal to purchase at least 10% (by volume) per year that is near-zero emissions by 2030.
Definition: Currently, there is not an industry standard or definition of what actually qualifies as "green" material.
Solutions from automakers
Representatives of the auto industry proposed the below solutions to overcome these barriers:
Incentives: The government can create incentives and/or subsidies to smelters and mills so they can invest in new technology to enable low emission production that can be offered to purchasers at the current price or even lower. They can also offer consumer-based incentives for purchase of domestic vehicles using green aluminum and steel, and/or government purchase of green aluminum and steel to stimulate demand.
Transition to renewables: Increase availability and capacity of renewable energy generation dedicated to supporting green steel and aluminum production.
Investments: There need to be investments or other funding mechanisms to lower carbon grids surrounding brownfield and greenfield sites.
Research Grants: The government could also provide grants and facilitate pilot programs to research facilities to look at how to produce low cost and low emission materials.
Barriers for steel and aluminum producers
We also heard from the supply side, from steel and aluminum industry leaders who listed these factors as their largest barriers to implementation:
Capacity: Limited post-consumer steel and aluminum scrap supply exists in the US. Higher costs provide less room for innovation and decarbonization.
Renewable energy access: Steel and aluminum producers face limited access to renewable energy and expressed a desire for better grid integration of renewable energy sources, especially when it comes to permitting.
Demand: Aluminum and steel producers have seen less of a demand signal for decarbonized products in the US due to financial and technological constraints from buyers and suppliers.
Solutions from steel and aluminum producers
From steel and aluminum producers we heard from the following solutions:
Fair and unified demand signals: Steel and aluminum producers want to see fair and unified demand signals to increase production. Streamlined processes on permitting for renewable energy from the Clean Air Act, more incentives for businesses upstream and downstream in the supply chain to produce decarbonized steel and aluminum, and fair trade regulation enforcement are key to growing the practice in the US.
Alignment on industry standards: Producers in the steel and aluminum industry expressed a desire to define a common standard where all producers regardless of production route agree on the definition of what makes these products low emission or "sustainable."
Forging ahead
These discussions underscore the need for a commitment to green steel and aluminum and greater integration of sustainable sources into the automotive supply chain. We look forward to carrying this progress forward at high level events like Climate Week NYC
