US Steel's Integrated Sustainability

We have with us this afternoon, Erica Chan, general manager of sustainability at US Steel, a four point for billion dollar company with a market cap of four point four billion dollars. She's with us right now in the Bloomberg Interactive Broker's studio. Erica, it's good to have you with us. How are you. I'm doing well. Thank you for having me. Yeah, well, thanks for joining us. So how do we do this? How do we make the steel industry not responsible for

seven percent of global emissions? Well, it's going to take a lot of things for that to happen. And the good news is is that everyone is coming together to address this problem. So, um, I'll give you an example of collaboration today, The Climate Aligned Fience with the R and MY organization and several banks, including I n G, launched these sustainable Steel Principles, and this is designed to standardize how banks support and finance the steel sector in

order to accelerate a decarbonization journey. So that's one of the ways. Another thing that we're doing at you is still in particular is which is really unique, is that we've integrated sustainability into our business strategy. So everything that we do is integrated across our operations, across our enterprise. Okay, I want to just step back because Katie and I were talking a little bit earlier about science, and she revealed to me, what are you going to say, has

never taken a physics class? No, it's okay, and it's okay. Did you take chemistry? That's totally okay. I almost failed the chemists. Okay, she almost sail chemistry. But you're really good at writing about bonds. She knows everything about crypto very specific time. But let's take a step back and talk about how steel is made and why it's so energy intensive. So take us through that and can I don't know why I threw you under the bus, now, it's fun. I should have tried harder, but I was

steel made. Yeah, well, I am not an engineer, but I will tell you in from what I understand. So you know, I joined you a steal about eight months ago, and I knew nothing about steel. I worked for Dell Technologies. But um, it's fascinating. Steel is made in one way, which is a traditional way of integrated steel making that's been done for over a hundred twenty years, where you have a blast furnace, a lot of ingredients supporting and

then you've got liquid iron coming out and eventually steel. Um. The newer technology uses what is called electric arc furnace technology, and that is what is referred to as many mills, and that has a lower carbon footprint, up to about seventy reduction in carbon footprint for steel. So one of the interesting things about steel is it's definitely recyclable. It loses none of its properties. And so I like to

say that is that energy intensive go to recycle it? Um, you know, we actually use it as an energy source. So up to a percent of scrap steel can be used in our electric arc furnaces. So we've been practicing circular economy before circular economy became a thing. Um. We recycled last year. We're five point two million tons of steel and scrap. And so if I look at your notes, this stat really jumped out to me that steel is, of course an emissions intensive sector, counting for roughly seven

percent of global greenhouse gas emissions globally. And again I'm a little shaky on the science, but the process you just described what's realistic if we think about where that seven percent can could go to. So you know it's going to take a competation things. You know, we know we can't do it alone, right, one company can't do it alone. It is we've got to come together and a lot of things have to happen, like government funding, you know, policy to support it, UM, improve regulations and

all of that. But I think that the really important thing on getting to that is exploration of technologies that can help us get there, like green hydrogen. Have you heard of green hydrogen? CEO Andy marsh On, Our program works a lot with hydrogen and work with companies all over. Yeah, So the availability of green hydrogen is going to help

lower the intensity of steelmaking. UM. A lot of other technologies like electrification, UM direct reduced iron with hydrogen, A lot of different technologies need to come to maturity and carbon capture utilization storage as well. Earlier this week we had on our program Dr Andrew Forrest of fortescuew uh and he's uh, it's an holding company that owns a bunch of minds in Australia. Uh. And their competitors include

real Tinto and more. And it's mining, so it's not necessarily the processing of it, but they're looking to decarbonize completely. What are your goals at us steel like like And he's not talking carbon credits or carbon offsets here, he's literally talking like, you know, moving completely away from fossil fuels in a real way. Yeah, absolute lutely and that's why we actually set last year are net zero goals.

So we've committed to become net zero. So that's an absolute reduction in emissions absolute emissions production by and we have an interim my missions intensity to go along the way. But that is the same UM spirit that we're taking is we have to invest and explore in the technologies and energy usage as well that will absolutely decarbonize our footprint UM. And we are not relying on carbon offset to to get us there, but there are a lot of things that we need right um to to support

us in that journey. We'll sit tight with us. Erica. We're gonna be back with you in just a few minutes. Erika Chan, general manager of Sustainability at U S Steal. She's with us right now in the Bloomberg Interactive Broker's studio. You're listening to Bloomberg Business Week and this is Bloomberg Radio. Let's get right back to Erica Chan, general manager of sustainability at US Steel. She's with us right now in

the Bloomberg Interactive Broker's studio. So, Erica, I want to talk more about sustainability of course at US Steel and specifically about the plan to eliminate carbon emissions from steel production. UM, is it is it too early to completely like how do you guys completely comply with E A S and like go to mini malls that use all the scrap

steel to remailed into new steel. Talk about how that works. Yeah, So you know, we have we acquire a Big River Steel which actually was the first LEAD certified steel mill in the US. UM and it's also the first US based steel site to be persponsible steel certified. So um that is our first electric arc furnace along with the one that we have a ver tubular business in Fairfield, Alabama.

So the journey there is that it's it's a combination of utilization of this improved technology for steelmaking UM, but as well as investing in UM technologies that can help actually decarbonize so UM carbon capture utilization and storage. That's one method as well. We talked about green hydrogen earlier. Um A electrification of the grid because steel is so energy intensive, you know, we need more renewable energy in the grid and the grid infrastructure that can support that

expanded power need. So UM, those are some of the ways that we're looking at it. When it comes to carbon capture with the current furnaces, you have the current blast furnaces. Does that work? What research have you done there? Yeah?

So UM we actually have formed some partnerships and alliances we're bringing together in a noncompetitive environment like peers in academia UM as well as government agencies to look at how do we escale and how do we implement that infrastructure because it doesn't exist in a in a scale at a level that we would need, you know, to cover all of the last finn assess to our an operation today in the US, what is the role of the government here, and to what extent does the US

government need to step in and actually help you and other American steel companies get to net zero? Yeah? Absolutely, I mean I think we've seen a big signal from the government, um, just in the past few weeks, right with the IRA and I think that's going to be a good first forward movement into making sure that the US government enables the various levels that we need to to carbonize across a number of different industries. And so, what kind of relationship, what kind of conversations do you

have with politicians with the White House? What does that look like? Yeah, well, we actually welcome engagement from policymakers on all levels, federals. You know, we work very local in our communities as well, and it's it's looking at the policies that can enable like clean energy, right, like renewable incentives for renewable energy, infrastructure and development. So we do work with regulators and administrators and various agencies at

a federal and stand local level. Who are those regulators? Who are the politicians that you're actually speaking to on a regular basis, So it's a number of different ones. And my colleagues who work in government affairs, are you know,

the ones who are the primary leads on that. My role in sustainability and I focus on looking at the overall corporate sustainability strategy and how do we meet our goals, how do we advance on our commitments to UM, you know, be more sustainable company, to offer more profitable steel solutions for our customers. Because our customers are really the ones who are also at the forefront of this, right because in the sense that they're demanding exactly well, so how

much of this is driven internally versus externally? I think it's a it's a good healthy combination. UM. So our customers have their own expectations, like their own commitments. UM. Whether you're an auto manufacturer and appliance manufacturer, you want to offer more sustainable products to your customers, and in order to do that, you need more sustainable materials, right, whether it's steel or you know, some other material that

goes into making up and erico. I want to talk a little bit about you, uh and Drew role at u S Steel. You said that you joined eight months ago. Where did you come from? So? I worked at Dell Technologies that was also in corporate sustainability and I worked there for over eleven years. Um So it was a really interesting journey to come over to the steel sector, which I knew nothing about. I'm not an engineer, I

don't have a PhD. And metallurgy. Yeah, I don't think I failed my physics class though, but I didn't even take I didn't even take physics. I failed chemistry. Mr Harris from my high school was listening to this, maybe so he would know how it wasn't so great. Um So, I do think that's really interesting that you went from Dell Technologies to U S. Steel sort of from uh, you know, technology to an industrial industry. Why that leap

in particular? So what I saw in US Steel was the opportunity to join an iconic company that I saw was on a solid journey towards transformation. Right. It's not just I'm going to announce these goals and do nothing about it. There were solid plans in place and actions being taken, and so I wanted to be part of that. I wanted to, you know, bring my practice around sustainability and my knowledge to kind of help evolve the foundation already that was there. And so, um and I love

a good challenge. So yeah, we only have thirty seconds left. But you've been there for eight months. Where how big of the change has been since you've been there? What can you tell us? So? Cultural wise it's different, right, going from a hundred fifty thousand global you know company to a twenty four thousand I think I'm gonna stet right, um, employee world by both US and then you and Slovakia and UM. What I found is that it is a

very warm and embracing culture. We have employees who have worked there like for multi generations, like for four generations, and that is something you really don't see in corporate America today. So UM, the environment has been very warm and welcoming. So it's been a really great experience. Well please do come back and join us once again when you are back in New York City. Very pleased to

have with us. Erika Chan, general manager of Sustainability at US, deal with US in the Bloomberg Interactive Broker Studios in New York