CMC 2022 Sustainability Report
  1. Environmental
  2. Environmental Stewardship
  3. Energy & Climate
energy efficiency tab

Energy & Climate

  • 3-3 Management of material topics

At CMC, we continue to build on our legacy of energy efficiency.

Since we began melting and producing steel in 1962, we have only utilized EAF technology, which is a much more energy-efficient process for making steel when compared to traditional steelmaking processes. In 2009, CMC became the first company in the world to successfully operate a state-of-the-art micro mill, which connects the melt shop and rolling mill into one continuous process. This innovation eliminates the need for burning natural gas in a reheat furnace.

While EAF mills require considerable amounts of electricity and natural gas, our focus on continued investment and innovation has resulted in our mills having a significantly smaller energy footprint when compared to traditional integrated steelmaking.

A longtime leader in energy efficiency and low GHG emissions, CMC approaches reducing our energy requirements, and the associated climate impacts, through a two-pronged strategy that addresses both our demand and supply of energy:

  1. Focusing on operational efficiencies to reduce energy needs
  2. Further diversifying our purchases of energy from renewable sources

Addressing our energy use in this way means we are able to maximize opportunities for implementing cost-effective and appropriate strategies at each of our facilities. We explore practical technology options and practices to lower our costs, reduce emissions and increase satisfaction among customers looking to lower their own emissions in their supply chains. Staying proactive also helps address potential risks posed to our business by changing regulations.

Since 2019, we have reduced our energy
consumption intensity by 4.1%

Energy Consumption Intensity

81%

less than the industry average

Energy Intensity

(GJ/MT)

CMC 2022 Industry Average¹

1 Industry averages taken from the latest World Steel Association published indicators 2020 data.

Goal

Decrease our energy consumption intensity by 5%

Energy Intensity (GJ/MT)

We have decreased our energy consumption intensity by 4.1% since 2019, surpassing our goal. We are proud of our progress to date and plan to continue reducing our energy consumption to progress toward a more sustainable future.

Current Progress Towards Goal

2022 2021 2020

Results

4.1%

decrease
since 2019*

*Based on 2019 baseline value of 4.020 GJ/MT.

Q-One Power at our Micro Mills

Expanding on energy efficiencies already achieved at our micro mills, CMC Steel Arizona commenced operations of the Q-One power system for its ladle furnace.

The innovative Q-One design is configured so that it can accept renewable energy directly from the source, meaning that on-site solar power could be connected to the steel mill power system. Cutting-edge Q-One technology can reduce electricity transmission losses up to 10% which means better overall efficient use of generated electricity.

The ladle furnace Q-One system is a smaller power system and acts as a proof-of-concept for the upcoming Arizona2 project, which will include Q-One power systems for both the EAF and ladle furnaces. We are exploring the possibility of building a solar array on the plant site to provide a portion of the facility’s power.

A Year of Energy Improvements

As part of our ongoing efforts to reduce the energy usage of our EAFs, we engaged an industry expert to review the chemical energy systems at five of our sites. Following their review, they will provide recommendations on how to potentially improve chemical energy efficiency. Similar reviews will follow at our other melt shops.

Identifying opportunities to improve energy efficiency is only a first step. Many of our improvements were achieved through our operators traveling to other facilities to discuss and compare best practices. We train our teams to understand the why and how of processes so that our best practices quickly become our standard operating procedures. We benchmark our facilities against each other and share lessons learned from high-performing locations. We also educate our teams to help them better understand the opportunities in energy efficiencies and how innovations can lead to better pricing and products.

Other notable operations improvements completed in 2022 include the following:

  • CMC Steel New Jersey reduced the energy consumption of its electric furnace by more than 8% through specialized operator training and program improvements.
  • CMC Steel Tennessee enhanced the automation for the EAF chemical energy system during a planned outage earlier in 2022. The facility now has better control over carbon injection, and its energy consumption has decreased.
  • CMC Steel Florida is improving its chemical and electrical energy practices at the EAF to reduce overall energy consumption.
  • CMC Steel South Carolina took delivery of multiple replacement ladle preheaters that offer greater energy efficiency and associated reductions in the facility’s natural gas requirements.
  • CMC Steel Oklahoma uses electrical metering throughout the facility to help quantify and reduce energy consumption for each operating area.

Identifying opportunities to improve energy efficiency is only a first step. We train our teams to understand the why and how of processes so that best practices at our facilities quickly become standard operating procedures across the enterprise. We benchmark our facilities against each other and share lessons learned from high-performing locations. We also educate our teams to help them better understand the opportunities in energy efficiencies and how innovations can lead to better pricing and products.

Energy Consumption

  • 302-1 Energy consumption within the organization
  • 302-3 Energy intensity
  • 302-4 Reduction of energy consumption
Metric Unit 2022 2021 2020
Total Energy Consumption GJ 22,056,632 20,984,140 20,969,188
   Natural Gas Consumption GJ 8,482,268 8,039,248 8,220,949
   Diesel Consumption GJ 834,090 616,360 634,689
      Facility Diesel Consumption GJ 392,078 177,203 183,203
      OTR Diesel GJ 442,012 439,157 451,486
   Electricity Consumption GJ 12,740,274 12,328,532 12,113,550
Total Energy Intensity GJ/MT 3.856 3.706 3.783
Renewable Electricity Consumption % 23.2% 18.0% 12.9%
Renewable Energy Consumption % 13.4% 10.6% 7.7%

Goal

Increase our renewable energy
usage by 12 percentage points

Percent Renewable Energy Usage (%)

Since 2019, we increased the percentage of our total energy usage that comes from renewables by almost three percentage points from 7.1% to 13.4%; this is a 88.7% increase in renewable energy usage. We attribute our progress to our renewable energy usage at CMC Steel Arizona in Mesa and our expansion of renewable energy usage in Poland. We expect the percentage of our energy from renewable sources to increase as our new supply agreement in Texas goes into effect and we move forward with the construction of our third micro mill.

Current Progress Towards Goal

2022 2021 2020

Results

88.7%

increase
since 2019*

*Based on 2019 baseline value of 7.1%.

Transitioning Our Energy Mix

  • 302-4 Reduction of energy consumption

Not all GHG emissions can be mitigated by efficiencies and technology. The sourcing and mix of our energy supply plays a critical role in determining our carbon performance. To that end, CMC continually investigates and implements new energy sourcing options that better serve our business and our customers, including the use of renewable energy sources.

Important considerations for our procurement teams as we seek energy supply for our operations include:

  • Ensuring we have an adequate supply of power
  • Diversifying our sources of power, and
  • Securing the economic purchase of renewable power.

In addition, CMC continues to transition toward more renewable power in our operations. CMC’s strategy of expanding energy supply options helps mitigate supply certainty, price risk and environmental impacts.

This year, our Arizona and Texas mills offset more of our Scope 2 GHG emissions by entering into new power supply agreements that will increase their renewable electricity usage. Even as the electricity grid continues to increase renewable generation, power purchase agreements, like those highlighted below, have a direct effect on achieving our goal of 25% renewable electricity by 2030.:

  • In Arizona, CMC is a partial consumer of the 100MW Salt River Solar Project through a 15-year power purchase agreement (PPA) that provides CMC Steel Arizona with the environmental benefits of carbon free electricity.
  • In Texas, CMC is a partial consumer of the Flying Jays Solar Project in ERCOT through a 5-year PPA. CMC Steel Texas receives power along with the benefits of carbon- free electricity.

GHG Emissions Intensity

Scope 1-3

65%

less than the industry average

Greenhouse Gas Emissions

(MT CO2e/MT)

CMC 2022 Industry Average¹
0.413
(Scope 1-2)
0.252
(Scope 3²)
1.89
(Scope 1-3)

1 Industry averages taken from the World Steel Association indicators 2020 data

2 Scope 3 estimated emissions from audited product lifecycle analysis of GWP100
conducted according to ISO 21930 and ISO 14025

Scope 1, 2 & 3 GHG Emissions

  • 305-1 Direct (Scope 1) GHG emissions
  • 305-2 Energy indirect (Scope 2) GHG emissions
  • 305-3 Other indirect (Scope 3) emissions
  • 305-4 GHG emissions intensity
  • 305-5 Reduction of GHG emissions
Metric Unit 2022 2021 2020
Scope 1 GHG Emissions MT CO2e 1,082,528 1,063,751 1,032,359
   Scope 1 GHG Emissions Intensity MT/MT 0.188 0.188 0.188
   % of CO2e Covered Under Emissions-limiting Regulations % 3.88% 4.31% 4.24%
Scope 2 GHG Emissions MT CO2e 1,297,667 1,441,611 1,491,490
   Scope 2 GHG Emissions Intensity MT/MT 0.225 0.255 0.271
Scope 1 & 2 GHG Emissions MT CO2e 2,380,195 2,505,362 2,523,849
   Scope 1 & 2 GHG Emissions Intensity MT/MT 0.413 0.442 0.459
Scope 3 GHG Emissions MT CO2e 1,450,639 1,398,502 1,357,590
   Scope 3 GHG Emissions Intensity MT/MT 0.252 0.247 0.247
Total GHG Emissions (Scope 1, 2 & 3) MT CO2e 3,830,834 3,903,864 3,881,439
   Total GHG Emissions Intensity (Scope 1, 2 & 3) MT/MT 0.665 0.689 0.706

Goal

Decrease our Scope 1 & 2
GHG emissions intensity by 20%

Scope 1 & 2 GHG Emissions Intensity (MT CO2e/MT)

We steadily decreased our Scope 1 and 2 GHG emissions intensity by 13.8% since 2019. Our mills are continuing to investigate new ways to further improve efficiency in order to reduce emissions intensity.

2022 2021 2020

Results

13.8%

decrease
since 2019*

*Based on 2019 baseline value of 0.479 MT CO2e/MT.

Poland's Changing Perspective on Energy

Traditionally, preferring green energy options equated to increased spending, forcing companies to choose between lower costs or environmentally conscious business choices. Our CMC Poland operations are changing the “or” into “and.”

Due to recent EU legislation, the greener we are, especially from an emissions standpoint, the more cost savings we see.

The energy purchased by CMC Poland is at least 30% renewable. We reached this result by utilizing PPAs with utilities and tapping into renewable generation.

CMC Poland and our power utility partner, PGE Obrót, were recognized for the successful implementation of a PPA agreement that incorporated an ecological and economic response to the needs of energy-intensive companies.

Efficient Retrofits for Tensar

Following the acquisition of Tensar, CMC teams immediately put their energy efficiency expertise to work.

We removed older light fixtures from the manufacturing plant in Morrow, Georgia, and replaced them with new, energy-efficient fixtures, benefitting both the company’s bottom line and efficiency goals, as well as improving the working environment.

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