The banks financing the American steel industry have a message: You’re not very green, but we’re here to help.
While U.S. steelmakers have been quick to remind investors that their mills are among the cleanest in the world, including this week’s statement lauding a study that said they have the lowest emissions, their lenders say they’re not green enough and there’s still lots of work ahead.
A push to eliminate emissions in one of the world’s most polluting industries led Goldman Sachs Group, Citigroup Inc. and four other banks to come together to develop a climate-aligned finance agreement for the steel sector. The banks struck a working group led by ING Groep NV and Societe Generale SA and facilitated by RMI’s Center for Climate-Aligned Finance to craft an industry-backed agreement before November’s United Nations Climate Change Conference.
Steelmaking accounts for 6% of global carbon dioxide emissions and 8% of energy-related emissions, according to researchers at Columbia University’s Center on Global Energy Policy. The U.S. Environmental Protection Agency says the American iron and steel industry accounts for 72.2 million tons of direct carbon dioxide equivalent emissions, which is about a third of the emissions from all U.S. flights in 2019.