The IRA (Inflation Reduction Act) and other government stimuli are boosting EV (electric vehicle) consumer interests and renewing a manufacturing focus in the U.S., reverberating through the industry and helping to support other sustainability initiatives. Yesterday, U. S. Steel Corp. provided second quarter 2023 adjusted net earnings per diluted share guidance upward, with President and Chief Executive Officer David Burritt providing a bit of commentary.
“We continue to execute our strategy from a position of strength as our Best for All strategic investments remain on-time and on-budget,” he said. “Our next critical strategic milestone is the start-up of the non-grain oriented (NGO) electrical steel line at Big River Steel in the third quarter of this year. Once on-line, the NGO electrical steel line is expected to strengthen domestic supply chains and bring advanced manufacturing back to our shores as we serve our automotive customers with state-of-the-art electrical steel that is sustainable and exclusive to U. S. Steel.”
In March, U. S. Steel announced that its new electrical steel product, InduX, will begin production at its Big River Steel facility in Osceola, AK, with the commissioning of its new NGO electrical steel line. InduX electrical steel is a very wide, ultra-thin, and lightweight steel having all the magnetic properties necessary for EVs—as well as generators and transformers. In an EV, the better the magnetic properties, the better the motor efficiency and, ultimately, vehicle range.
The product unveiling was made during the Corporate Climate Leadership panel at the Ceres Global conference in New York City in March. U. S. Steel Senior Vice President and Chief Strategy and Sustainability Officer, Richard Fruehauf, joined others who emphasized the need for partnerships in advancing decarbonization efforts.
“We know achieving our goal of net-zero GHG emissions by 2050 requires extraordinary action from everyone, and we are doing our part by collaborating to find new business approaches and to develop new technologies,” said Fruehauf. “Moreover, steel’s adaptability and near-infinite recyclability make it the ideal material to build safe, modern, and sustainable societies.”
U. S. Steel says it was the first North American headquartered steel company to announce a 2050 net-zero greenhouse gas (GHG) emissions goal (Scope 1 and Scope 2) and to join ResponsibleSteel, but the benefits of its strategic initiatives go beyond the steel industry.
“Our customers, including the EV manufacturers, have announced their own decarbonization goals,” said Kenneth Jaycox, U. S. Steel Senior Vice President and Chief Commercial Officer. “While we’re advancing on our sustainability goals, we’re also helping our customers meet theirs. That mutual benefit is inherent to our Best for All strategy.”
By producing InduX steel in the U.S., the company says it is making a significant investment in American jobs and bolstering the resilience of the country’s domestic supply chain. When fully operational, the NGO line will produce up to 200,000 tons of InduX steel per year. Total expected capital expenditures for the line of about $450 million is funded by cash generated from Big River Steel. Additional details on InduX electrical steel are expected soon.
In the meantime, U. S. Steel has gotten support and announced the closing of $240 million in unsecured environmental improvement revenue “Green Bonds” through Arkansas Development Finance Authority, the proceeds from which are partially funding work related to its new technologically advanced flat rolled steelmaking facility, Big River 2 (BR2), currently under construction near Osceola.
Once completed in 2024, the company says that BR2 will be the most advanced steelmaking facility in North America, featuring two EAFs (electric arc furnaces), with a total three million tons per year of advanced steelmaking capability, a state-of-the-art endless casting and rolling line, and advanced finishing capabilities. BR2 is expected to operate with up to 70-80% fewer greenhouse gas emissions compared to the traditional integrated steelmaking approach and directly support the company’s sustainability commitments.
The U. S. Steel sustainability efforts also got a boost from General Motors in February, when it was announced that the steel maker would supply the automaker with VerdeX steel, which is manufactured with up to 75% fewer emissions compared to traditional blast furnace production. It is made with up to 90% recycled content and is endlessly recyclable without degradation.
VerdeX steel will be manufactured at the Big River Steel facility, which is LEED certified to USGBC (U.S. Green Building Council) standards and meets the ResponsibleSteel standard, and will begin shipping to GM manufacturing facilities this year.
“As part of our Best for All strategy, we are committed to helping our customers reduce their carbon footprint by providing American-made advanced steel products that are manufactured with fewer emissions and can be recycled repeatedly,” said Jaycox. “Our VerdeX steel offers both the advantages of advanced high strength steel and low manufacturing emissions.”
“This agreement is an example of how we are innovating with our suppliers to create lower-emission products for our customers,” said Jeff Morrison, Vice President of Global Purchasing and Supply Chain at General Motors. “It also highlights how strong supplier relationships can help build a better future.”
When complete, U. S. Steel will have spent $3 billion on the new facility currently under construction in Osceola to expand production of sustainable advanced high-strength and electrical steels, including the expansion of the VerdeX steel offering to make it more widely available to manufacturers and help them lower their carbon footprint.
