# Climate Report 2024 - EcoSteel Industries

## Company Profile
- **Sector**: Low-carbon steel manufacturing
- **Headquarters**: Lyon, France
- **Revenue**: €2.8 billion
- **Employees**: 8,500
- **Production sites**: 4 plants in Europe (France, Germany, Spain)

## GHG Emissions 2024

### Complete inventory
- **Scope 1**: 1,200,000 tCO2e (direct combustion, blast furnaces)
- **Scope 2**: 180,000 tCO2e (purchased electricity and steam)
- **Scope 3**: 2,400,000 tCO2e (upstream and downstream value chain)
  - Of which raw materials: 1,800,000 tCO2e
  - Of which transport: 400,000 tCO2e
  - Of which product use: 200,000 tCO2e

**Total**: 3,780,000 tCO2e

### Carbon intensity
- **1.35 tCO2e/tonne of steel produced** (vs industry average 1.9)
- Evolution: -12% vs 2019 (baseline)

## Energy Consumption

- **Total**: 4,200 GWh
- **Renewable share**: 35% (offshore wind, solar via PPA)
- **Fossil share**: 65% (mainly natural gas)
- **2030 target**: 70% renewable
- **PUE Lyon data center**: 1.3

### Detailed energy mix
- Natural gas: 2,730 GWh
- Grid electricity (French mix): 1,050 GWh
- Renewable electricity (PPA): 420 GWh
  - Offshore wind: 280 GWh
  - Solar photovoltaic: 140 GWh

## Targets and Commitments

### Net-Zero 2050
- Commitment validated by **Science Based Targets initiative (SBTi)**
- Aligned with Paris Agreement 1.5°C trajectory
- Certification obtained: November 2023

### Intermediate targets
- **2030**: **-42% reduction in Scope 1+2 emissions** (2019 baseline)
- **2030**: **-25% reduction in Scope 3 emissions** (categories 1, 3, 11)
- **2027**: 100% renewable electricity across all sites
- **2028**: First electric furnace commissioning (DRI-EAF)

### "GreenSteel 2030" Program
Cross-functional strategic program with €850 million budget

#### Pillar 1: Process Electrification
- Progressive conversion of blast furnaces to DRI-EAF (Direct Reduced Iron - Electric Arc Furnace)
- Investment: €420M
- Carbon savings: -650,000 tCO2e/year at full capacity

#### Pillar 2: Green Hydrogen
- Partnership with **H2Green** for H2 supply
- Construction of 50 MW electrolyzer (Lyon site)
- Use in direct ore reduction
- Investment: €280M
- Expected start: Q2 2027

#### Pillar 3: Energy Efficiency
- Waste heat recovery (40 MW thermal)
- Reheating furnace optimization
- Target: -15% specific energy consumption
- Investment: €150M

## Identified Climate Risks

### Physical risks
1. **Water stress**
   - Mediterranean sites (Spain) vulnerable to drought
   - Potential impact on process cooling
   - Mitigation measure: closed circuits, water recycling

2. **Extreme weather events**
   - Flooding at German site (Rhine proximity)
   - Dike reinforcement and drainage systems (€8M invested 2023)

### Transition risks
1. **EU ETS carbon pricing**
   - Exposure: 1,200,000 ETS allowances required annually
   - Current price: ~€85/t (vs €25 in 2019)
   - Annual cost: ~€100M
   - Strategy: rapid decarbonization to reduce exposure

2. **International competitiveness**
   - Risk of low-cost/high-footprint Chinese steel imports
   - CBAM (Carbon Border Adjustment Mechanism) expected as protection

### Regulatory risks
1. **CBAM** (Carbon Border Adjustment Mechanism)
   - Entry into force 2026 (definitive phase)
   - Estimated impact: protection against carbon dumping
   - Opportunity: valorization of our low-carbon steel

2. **Mandatory CSRD reporting**
   - Applicable from FY 2024 (published 2025)
   - Limited then reasonable assurance from 2026
   - Dedicated resources: team of 4 FTE

## Carbon Credits and Sequestration

### Purchased credits (residual compensation)
- **10,000 VCS credits** (Verified Carbon Standard)
- Certified forestry projects (reforestation Madagascar)
- Use: offsetting incompressible Scope 3 emissions

### Own sequestration projects
- **Reforestation of disused industrial site** (Lorraine, 150 hectares)
- Sequestration capacity: 3,000 tCO2e/year (at maturity, 20 years)
- Biodiversity: 12 local species planted

## Climate Governance

### Dedicated bodies
- **Climate Committee** of the Board of Directors (4 meetings/year)
- **Energy Transition Department** reporting to CEO
  - Director: Jean-Marc Dufour (appointed January 2023)
  - Team: 12 people

### Training
- 100% of Executive Committee trained on climate issues (Carbon 4 training)
- 85% of operational managers sensitized

### Variable compensation
- 15% of CEO variable compensation linked to climate targets
- Criteria: absolute Scope 1+2 reduction, GreenSteel 2030 progress

## Key Indicators

| Indicator | 2024 | 2023 | Evolution |
|-----------|------|------|-----------|
| Total emissions (tCO2e) | 3,780,000 | 3,920,000 | -3.6% |
| Carbon intensity (tCO2e/t) | 1.35 | 1.41 | -4.3% |
| Renewable energy share | 35% | 28% | +7 pts |
| Steel production (kt) | 2,800 | 2,780 | +0.7% |

## 2025 Outlook

- Finalization of DRI-EAF study (investment decision Q1)
- Signing of additional 200 GWh onshore wind PPA
- Start of H2 electrolyzer construction (Lyon site)
- Publication of first complete CSRD report
- Target: -5% total emissions vs 2024

---

**Climate Contact**: climate@ecosteel.com
**Full report**: www.ecosteel.com/sustainability
