The Steel Industry & Climate Change Swansea University, 17th April 2013

Dr Paul Brooks Group Director, Environment

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Introduction Contents

• Introduction • Tata Group & Tata Steel • Climate Change Vision & Strategy

1. Continuing to improve current processes 2. Investing in breakthrough technologies 3. Developing new products and services to reduce environmental impact 4. Actively engaging our workforce 5. Further developing our pro-active role in global steel sector initiatives

• Conclusions

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• Indian conglomerate founded by JN Tata >140 years history • Strong social responsibility ethic • ~ 425,000 employees in 114 countries • Combined turnover of ~$80bn • Presence in a number of business sectors

- Materials - Engineering - Energy/power - Transport - Consumer goods - Chemicals - Communication & information systems - Services

Tata Group & Tata Steel Tata Group

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Tata Values A responsible and long term perspective

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“In a free enterprise, the community is not just another stakeholder in business but is in fact the very purpose of its existence”

Jamsetji Tata, Founder, Tata Group

Integrity • Fair, honest and transparent

Understanding • Care, respect and genuine

interest

Excellence • Highest standards, right first

time

Unity • Working together

Responsibility • Commitment and ownership

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Western Europe

Western Europe

India

SE Asia

South Africa

CIS

Turkey

Scandinavia

Japan

China

CEE

Western Africa

Ivory Coast (iron ore)

Mozambique (coal)

Oman (limestone)

Orissa

Steel making operations

Sales offices

Mining assets & projects

South East Asia

Jamshedpur 10mt

Tata Steel Thailand 1mt

Natsteel 1mt

Orissa

North America

Latin America

IJmuiden 7mt

Rotherham 1mt Scunthorpe 4.5mt Port Talbot 5mt

New Zealand

Tata Group & Tata Steel Tata Steel: Global reach

• 6th largest steelmaker with capacity of 28 Mt/a • Turnover of US$ 26 billion • No. of employees: 81,000 fte; R&D: 700 fte

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The Tata Steel vision is to be the world steel industry benchmark for value creation and corporate citizenship

• The vision translates into a number of ambitious five year goals which are measurable and tangible

• A performance culture supports the vision and goals.

Corporate Citizenship

Our People

Value Creation +

Tata Group & Tata Steel Tata Steel: Our vision

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Polymer coated steel for new can concepts

Rails for record-breaking high speed TGV trains

Ultra high performance steels for Airbus

Ympress S700 – strongest in the Ympress range of high strength, low-alloy steels

MagiZinc – award-winning coating with 4 times corrosion

protection

Steel plate for the pioneering Talisman Beatrice wind farm

off east coast of Scotland

Tata Group & Tata Steel Tata Steel: New products – fit for the future

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The rise of the middle-class consumer

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Increasing Demand For Resources

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Steel The backbone of continued economic development

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Global Steel Market The rise of China

Source:Worldsteel oct 2010

China

China

China

6 19

8 27

17 26

45 20

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Climate Change

Continued emissions would lead to further warming of 1.1ºC to 6.4ºC over the 21st century (best estimates: 1.8ºC - 4ºC) Source: IPCC

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Growth Sustainability World steel consumption Ambition to cut CO2 emissions will double by 2050 by at least 50% by 2050

Climate Change Vision & Strategy Steelmaking & Climate Change: The challenge

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SWOT Analysis

Strengths • Recyclability • Potential for Re-use • High Recycling Rate • Durability • Governance/Organisation • Track record

Weaknesses • CO2 intensity of steel • High weight to strength ratio • Limited scope for improvement • Constraints on CapEx • Legacy issues • Proximity to local communities

Opportunities • Low CO2/sustainable business opportunities • Financial benefits from energy efficiency & emissions trading • Life cycle thinking • Waste recovery • Positive image building

Threats • Minimum recycled content criteria • Inappropriate policy & regulation • Cap & Trade Schemes • Unlevel regulatory playing field • High energy prices • Poor perception/image

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Sustainability Steel is used, but never consumed

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• Efficient infrastructure exists for recycling steel

• All scrap steel is recycled in the most economical manner

• Any grade of steel can be made from recycled scrap

• All steel production uses recycled scrap – every steel plant is a recycling plant

• Steel manufacturers have been recycling for hundreds of years

Steel represents a sustainable investment

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Cradle to Grave To genuinely impact on the future it is essential to take a life-cycle approach

For a true comparison of the sustainability performance of products, the impacts of all phases of the lifecycle of the product must be assessed….

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Sustainability Requires Informed Choices

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Policy direction provides short term competitiveness and long term strategic challenges

CO2 implications: Long term development implications Today’s EU steel industrial footprint likely to be impacted by policy drivers

Schematic of EC’s 2050 road map to a decarbonised Europe

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CO2 Regulation Coverage and Impact What share of world steel production is impacted?

Cap & trade in place(EU & NZ)

Voluntary 'cap' scheme(Japan)

Processing 'cap'scheme (Australia)

Discussing 'cap'scheme (South Korea)

Other

Global steel production 2010, split by type of national coverage of CO2 legislation

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Climate Change Policy for Tata Companies

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Climate change is one of the most pressing issues the world faces today.

In response to this challenge, Tata Steel will be part of the solution and will achieve a leading position within the steel industry whilst creating value through:

(1) continuing to improve its current processes, improving energy efficiency & reducing emissions

(2) investing in breakthrough technologies

(3) developing new products and services to reduce environmental impact over the product lifecycle, offsetting emissions in manufacture

(4) actively engaging its workforce

(5) further developing its pro-active role in global steel sector initiatives.

Climate Change Vision & Strategy Vision

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Operational & Commercial Implications Working across a number of time horizons

CO2 impact (likely log scale)

Time to achieving impact

• Information campaigns & ‘evangelism’

•Consistent, common measurement/monitoring

•Voltage optimisation, VSDs, efficient lighting

•Yield improvements, raw material changes

•New power stations •Renewable energy •Product marketing •Brand differentiation

•HIsarna •Utilisation •New products/markets

Reshaping the ‘now’

Breakthrough technology

‘step change’ Behavioural and

incremental change

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Climate Change Vision & Strategy Improve current processes: MoniCA (1)

Requirements to improve current processes: • Knowledge on current CO2 emissions • Knowledge on improvement opportunities • Monitor impact of improvements

Project: Monitoring & Benchmarking CO2 Emissions Company-wide project led by R&D on authority of Group Environment Objectives:

• Monitor CO2 emissions per site and facility with time • Compare CO2 emissions of similar facilities • Help to identify opportunities for CO2 emission reduction • Benchmark the position of Tata Steel Group in the world

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Climate Change Vision & Strategy Improve current processes: MoniCA (2)

Approach: • Calculation method developed, aligned to

external reporting standards • Software tool MoniCA internally developed • Network constructed of ~100 colleagues at

30 sites in EU, USA and India • Best practices defined to allow benchmarking

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Distribution System

Power Plant

MARGM ABoiler 3

Boiler 5 MARAM B

Mitchell Boiler

MARGAM C

Boiler 6

Boiler 7

BOS Plant Gas Recovery at Port Talbot (an investment of ~£60m) • Increases on-site generation from 61 MW to 76MW; • Reduces electricity & natural gas imports • Reduces CO2 emissions by 240 kt/a and particulate emissions by ~40 t/a

Climate Change Vision & Strategy Improve current processes: BOS gas recovery

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Climate Change Vision & Strategy Improve current processes: Dry rolls DSP

Dry furnace transport rolls for Direct Sheet Plant at IJmuiden • High alloy steel rolls remove need for water cooling • Reduces natural gas consumption by 50% or 18 MW and thus 25 ktCO2/a)

Natural gas consumption Zone 7

0

50

100

150

200

250

300

350

01/01/10 02/04/10 02/07/10 01/10/10 31/12/10 01/04/11 01/07/11Date

Nat

ural

gas

flow

[Nm

3 /h]

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• Focus on ironmaking (~80% of CO2 emissions) • Present operation close to “best practice” Further energy saving will not deliver long term target Breakthrough development needed and done with partners via ULCOS - Carbon Capture & Storage - New steelmaking technologies Blast Furnace – Reductant usage Approaching the limits

Climate Change Vision & Strategy Need to invest in breakthrough technology

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Comparison with the blast furnace route:

Iron ore

coal

coke

sinter

Liquid iron

Blast furnace

First two campaigns with pilot plant at Tata Steel in IJmuiden show promising results

Climate Change Vision & Strategy Investing in breakthrough: HIsarna process

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Strategic Studies: CO2 Utilisation (Algae)

• Possible products: Bio-diesel, bio-mass, animal feed, etc

• To date: (1) Partnering with University of Sheffield (micro-

bubble technology), using 2m3 pilot reactor using off-gas from Scunthorpe on-site power station

(2) Working with Swansea University and others on ACCOMPLISH (Algal carbon capture and biomass production), which will capture CO2 from the coke ovens at Port Talbot to produce algae at a small facility located at site to test the viability of the technology.

+ CO2 + + + O2 ++ CO2 + + + O2 +

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Automotive – High strength steels reduce weight – Low friction engineering steels for

gearboxes and engines

Construction – Light-framed steel housing – Carbon neutral cladding, roofing & housing,

sustainable construction, flood defences

Power – Offshore/onshore wind turbines – Photovoltaic coatings

Tata Steel develops products and solutions that will help our customers and their customers to reduce their carbon footprint

Climate Change Vision & Strategy New products: Reduce customers’ CO2 footprint

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To date: • Presentation pack provided for cascade • Initially focussed on “Small Actions, Big Results”, now part of “I-MAD” • Further work to be done by business units on implementation

Ongoing: • Regional/local campaigns, possible cascade to local schools.

A long term campaign, not a one off

Climate Change Vision & Strategy Engaging workforce

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Reporting and targeting – Common reporting methodology – Third party endorsement

Technology

– Technology transfer / Asia-Pacific Partnership – Breakthrough programme / ULCOS project

Off-setting with steel solutions

– Automotive – Construction – Energy

Climate Change Vision & Strategy Pro-active in industry: Working with worldsteel

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• Tata Steel has a strong vision and strategy on climate change

• Improvements are identified via monitoring and benchmarking

• Short to medium carbon footprint improvements are possible as shown, but are limited with current technology

• Breakthrough technology developments are needed for the longer term, of which HIsarna is a good example

• Steel is a (significant) part of the solution to climate change – steel enables CO2 emissions reduction in daily life!

Conclusions

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End of presentation.

Thank you for your attention!