CMC 2023 Sustainability Report
  1. Environmental
  2. Environmental Stewardship
  3. Energy & Climate
energy efficiency tab

Energy & Climate

  • 3-3 Management of material topics

CMC mills account for more than 95% of our company’s total energy consumption. Still, we have a significantly smaller energy footprint compared to traditional integrated steelmaking producers.

We owe that in large part to the energy-efficient EAF technology we’ve used since we began melting and producing steel over 60 years ago. 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. Micro mills eliminate the need for burning natural gas in a reheat furnace, resulting in significant fuel use reductions.

Ultimately, we reduce our energy requirements, and the associated climate impacts, through a two-pronged strategy. We address both our energy demand and supply by focusing on operational efficiencies to reduce our overall energy needs while simultaneously working with our utility providers to secure a higher level of renewable energy.

At each CMC facility, we explore practical technology options and methods to lower our costs, reduce emissions and increase satisfaction among customers looking to lower their own emissions. Staying proactive also helps address potential business risks from changing regulations.

Since our core mill-related operations and activities drive most of our energy consumption, costs and GHG emissions, we consider them the pathway to achieving our Scope 1 and Scope 2 GHG emission targets. Energy efficiency and material efficiency directly impact our emissions and our bottom line.

Our focus to reduce energy usage at our mills includes:

  • Selecting lower impact and more efficient raw materials
  • Analyzing data generated during operations to identify periods of high and low efficiency and to investigate causes of performance issues
  • Configuring automatic controls to reduce or eliminate inefficient modes of operation
  • Training managers, engineers and operators to expand best practices
  • Increasing the reporting of efficiency benchmarks

While others in the industry are changing their processes to become more sustainable, CMC’s steelmaking has been that way for decades. Our EAF technology enables us to generate some of the lowest steelmaking GHG emissions in the world.

Since 2019, we have reduced our energy consumption intensity by 4.4%

Energy Consumption Intensity

82%

less than the industry average

Energy Intensity

(GJ/MT)

CMC 2023 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 4.4% 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

2023 2022 2021

Results

4.4%

decrease
since 2019*

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

Innovating with Q-One Power Technology

In 2022, CMC Steel Arizona began using the Q-One power system for its ladle metallurgical station at the AZ1 micro mill.

Q-One technology is configured to accept renewable energy right from the source, a critical attribute as CMC looks to increase the use of renewables across our steel mill power systems. Q-One reduces electricity transmission losses by up to 10%, leading to the more efficient use of generated electricity.

AZ1 served as a test platform for future micro mills. Since Q-One has proven to reduce power and electrode consumption, retain high power and provide renewable energy, we selected the technology as the power system for the EAF and ladle metallurgical station at AZ2, which began operations in Spring 2023. Looking ahead, we will work to expand Q-One usage as we build more micro mills.

A Year of Energy Improvements

Across the enterprise, we train our teams on overall best practices and benchmark performance at our facilities. We also share lessons from high-performing locations and help employees recognize opportunities for improvements that lead to better efficiency.

Among the CMC facilities that made operational improvements over 2023:

  • Steel Florida installed new ladle preheaters and made some changes to its electric arc furnace energy recipe, reducing electrical energy consumption by about 2.5% year over year.
  • Steel South Carolina installed a new chemical energy package in their EAF and revised their chemical automation program and practices to improve their chemical energy efficiency.
  • Steel Arizona has changed their scrap recipe, which has reduced the use of injection carbon.

To connect operations across the country and around the world, we have Operational Excellence Teams to help foster cross-facility collaboration. These groups meet virtually every month and in person once a year to discuss challenges and share best practices and insights into what works at their different locations.

Other enhancements for 2023 include new corporate hires such as a melt shop expert, graduating process engineer and automation engineer. Filling these positions improves our ability to support all of our operations with analysis and site assistance and to seize opportunities for improvement.

Meanwhile, at our Tensar facilities, we’re also improving processes and finding new ways to achieve our overall goals. For instance, we’re exploring upgrades to all of our lighting for better cost savings and major gains in energy efficiency.

Energy Consumption

  • 302-1 Energy consumption within the organization
  • 302-3 Energy intensity
  • 302-4 Reduction of energy consumption
Metric Unit 2023 2022 2021
Total Energy Consumption GJ 19,646,096 22,056,632 20,984,140
   Natural Gas Consumption GJ 8,329,192 8,482,268 8,039,248
   Diesel Consumption GJ 622,954 834,090 616,360
      Facility Diesel Consumption GJ 185,000 392,078 177,203
      OTR Diesel GJ 437,954 442,012 439,157
   Electricity Consumption GJ 12,118,414 12,740,274 12,328,532
Total Energy Intensity GJ/MT 3.84 3.83 3.71
Renewable Electricity Consumption % 22.8% 23.2% 18.0%
Renewable Energy Consumption % 13.2% 13.4% 10.6%

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 13.2%; this is a 85.9% 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

2023 2022 2021

Results

85.9%

increase
since 2019*

*Based on 2019 baseline value of 7.1%.

Transitioning Our Energy Mix

  • 302-4 Reduction of energy consumption

Process efficiency and technology can’t mitigate all GHG emissions. The sourcing and mix of our energy supply plays a critical role in our carbon footprint. That’s why CMC continually investigates and implements new energy sourcing options that better serve our business and our customers, including the use of renewable energy sources.

At the same time, we work with our suppliers to minimize indirect energy use at our facilities. Our energy teams strive to:

  • Ensure we have an adequate and reliable supply of power
  • Diversify our sources of power
  • Secure the economic purchase of renewable power

We’re also continuing our transition toward more renewable power across all operations. Our strategy of expanding energy supply options helps mitigate supply uncertainty, price risk and environmental impacts. This effort is exemplified by our recent work toward securing a Virtual Purchase Power Agreement (VPPA) for our Steel Alabama site, which is scheduled to begin in 2025. The VPPA will allow our Alabama site to consume up to 12% of its annual energy consumption from a local solar farm.

In 2023, we enhanced our strategies for supplying electricity and natural gas to our mini and micro mills. The goal was to address all facilities’ energy requirements based on their activities, location and demand. To accomplish this, our procurement teams are engaging more directly with suppliers and utilities and working to balance the price and the reliability of the energy source—ensuring we retain clean energy at the right price that will guarantee consistent power to our operations, even in extreme weather.

GHG Emissions Intensity

Scope 1-3

64%

less than the industry average

Greenhouse Gas Emissions

(MT COe/MT)

CMC 2023 Industry Average¹
0.42
(Scope 1-2)
0.26
(Scope 3)
1.9
(Scope 1-3)

1 Industry averages taken from the World Steel Association indicators data

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 2023 2022 2021
Scope 1 GHG Emissions MT CO2e 1,056,191 1,082,528 1,063,751
   Scope 1 GHG Emissions Intensity MT/MT 0.2 0.19 0.19
   % of CO2e Covered Under Emissions-limiting Regulations % 4.27% 3.88% 4.31%
Scope 2 GHG Emissions MT CO2e 1,232,430 1,297,667 1,441,611
   Scope 2 GHG Emissions Intensity MT/MT 0.23 0.23 0.26
Scope 1 & 2 GHG Emissions MT CO2e 2,288,621 2,380,195 2,505,362
   Scope 1 & 2 GHG Emissions Intensity MT/MT 0.42 0.41 0.44
Scope 3 GHG Emissions MT CO2e 1,387,937 1,450,639 1,398,502
   Scope 3 GHG Emissions Intensity MT/MT 0.26 0.25 0.25
Total GHG Emissions (Scope 1, 2 & 3) MT CO2e 3,676,558 3,830,834 3,903,864
   Total GHG Emissions Intensity (Scope 1, 2 & 3) MT/MT 0.68 0.67 0.69

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 11.9% since 2019. Our mills are continuing to investigate new ways to further improve efficiency in order to reduce emissions intensity.

2023 2022 2021

Results

11.8%

decrease
since 2019*

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

Conservation Champions

At CMC, we engage employees at all levels in discussions to improve operations and environmental efficiencies.

Every year, CMC allocates $400,000 for energy savings projects and $100,000 for energy savings studies at our facilities. We encourage individuals at our sites to act as “champions” and share their ideas for energy-efficient programs with the CMC energy team.

We look for projects that balance the environmental impact reductions they make with the operational and cost efficiencies associated with sustainable business practices. Previous projects include lighting upgrades, compressed air studies to identify opportunities for improvement and building a conceptual design for an optimized air compression system.

By involving all employees in the process, we create a culture of accountability and company-wide support for increasing our operational efficiency and mitigating environmental risk.

Sharing the Benefits of Renewable Energy

In 2023, CMC Steel Tennessee demonstrated our companywide commitment to creating steel in sustainable ways that benefit the environment while engaging the communities we serve.

The facility participated in the Knoxville Utilities Board Community Solar Project, which offered 1,000 renewable energy certificates (RECs) to the area, from which we purchased 528 RECs. We further supported the local effort by making the project possible and educating the community about CMC’s steelmaking process.

In total, CMC Steel Tennessee bought 20% of our energy and electricity through the solar project this past year.