November 30, 2021

Severstal increases the share of renewables in its energy portfolio

Severstal, one of the world's largest vertically integrated steel and mining companies, has taken a strategic decision to increase the share of renewable energy in its energy portfolio, in part by increasing heat generation from biofuels at the operating boiler houses of Karelsky Okatysh, the leading iron ore mining and processing company in Russia. Karelsky Okatysh will gradually increase the share of biofuels in the balance of heat production from 1.2% in 2021 to 13.5% in 2026.

Karelsky Okatysh’s total energy consumption in 2020 was 264,532 Gcal/year. 3,060 Gcal (1.2% of the total consumption) was energy produced using biofuel, while the rest was generated from fuel oil. At the same time, Karelsky Okatysh generates heat from biofuel (wood chips) at its own boiler house. Currently, the use of alternative fuels (natural gas) is not possible at Karelsky Okatysh due to its remote location and lack of infrastructure, but the company sees an opportunity to increase the purchase of high-quality wood chips, including from local suppliers.

Biofuel is any fuel derived from biomass that is grown or obtained from waste. Severstal makes sure to comply fully with international sustainability criteria and certifies biofuels in compliance with the ISCC (International Sustainability and Carbon Certification) requirements. Going forward, Severstal plans to use only certified biofuels, which ensures that chips will only be purchased from responsible suppliers. Implementing projects which use biofuels could lead to a reduction of over 11 thousand tons of CO2-eq./year.

Alexander Shevelev, CEO of Severstal, commented:

“Severstal has set itself the goal of reducing its environmental impact and contributing to global efforts to achieve the Paris Agreement targets. Our own medium-term goal is to reduce CO2 emissions from 2,063 tonnes / tonne of steel in 2020 to 1,857 tonnes / tonne of steel (or by 10%) in 2030, which will place us in the top 15% of steelmakers with the lowest greenhouse gas emissions in the world. Our ambitious project to diversify our own power generation portfolio is an essential part of this programme. It is important to note that for Severstal this is not just an effort to formally achieve a goal. It is fundamentally important to us that the alternative energy sources we use are certified and really contribute to solving climate problems. With this objective, we urge our supply chain partners to join forces with us, and we recently announced the development of a climate memorandum “Together for a low-carbon future” in support of global efforts to prevent further climate change, which we propose our key suppliers and customers sign”.