1 00:00:00,040 --> 00:00:03,600 Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and 2 00:00:03,680 --> 00:00:08,080 Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, there's 3 00:00:08,119 --> 00:00:11,959 Speaker 1: some hard truths in this world. Steel is dirty. About 4 00:00:12,000 --> 00:00:14,920 Speaker 1: seven percent of global greenhouse gas emissions come from steel. 5 00:00:15,400 --> 00:00:17,360 Speaker 1: But it's also the most used metal in the world. 6 00:00:17,880 --> 00:00:20,680 Speaker 1: We need it and right now we can't live without it. 7 00:00:21,120 --> 00:00:23,760 Speaker 1: We have with us this afternoon, Erica Chan, general manager 8 00:00:23,760 --> 00:00:27,040 Speaker 1: of sustainability at US Steel, a four point for billion 9 00:00:27,040 --> 00:00:29,760 Speaker 1: dollar company with a market cap of four point four 10 00:00:29,800 --> 00:00:32,120 Speaker 1: billion dollars. She's with us right now in the Bloomberg 11 00:00:32,159 --> 00:00:35,159 Speaker 1: Interactive Broker's studio. Erica, it's good to have you with us. 12 00:00:35,200 --> 00:00:37,640 Speaker 1: How are you. I'm doing well. Thank you for having me. Yeah, well, 13 00:00:37,680 --> 00:00:39,839 Speaker 1: thanks for joining us. So how do we do this? 14 00:00:40,000 --> 00:00:42,920 Speaker 1: How do we make the steel industry not responsible for 15 00:00:42,960 --> 00:00:45,880 Speaker 1: seven percent of global emissions? Well, it's going to take 16 00:00:46,080 --> 00:00:49,440 Speaker 1: a lot of things for that to happen. And the 17 00:00:49,479 --> 00:00:52,159 Speaker 1: good news is is that everyone is coming together to 18 00:00:52,200 --> 00:00:56,040 Speaker 1: address this problem. So, um, I'll give you an example 19 00:00:56,080 --> 00:01:01,000 Speaker 1: of collaboration today, The Climate Aligned Fience with the R 20 00:01:01,040 --> 00:01:03,640 Speaker 1: and MY organization and several banks, including I n G, 21 00:01:03,880 --> 00:01:07,880 Speaker 1: launched these sustainable Steel Principles, and this is designed to 22 00:01:08,040 --> 00:01:12,920 Speaker 1: standardize how banks support and finance the steel sector in 23 00:01:13,000 --> 00:01:17,959 Speaker 1: order to accelerate a decarbonization journey. So that's one of 24 00:01:17,959 --> 00:01:20,120 Speaker 1: the ways. Another thing that we're doing at you is 25 00:01:20,160 --> 00:01:22,399 Speaker 1: still in particular is which is really unique, is that 26 00:01:22,640 --> 00:01:27,080 Speaker 1: we've integrated sustainability into our business strategy. So everything that 27 00:01:27,120 --> 00:01:30,960 Speaker 1: we do is integrated across our operations, across our enterprise. Okay, 28 00:01:31,000 --> 00:01:33,040 Speaker 1: I want to just step back because Katie and I 29 00:01:33,120 --> 00:01:36,360 Speaker 1: were talking a little bit earlier about science, and she 30 00:01:36,520 --> 00:01:40,520 Speaker 1: revealed to me, what are you going to say, has 31 00:01:40,560 --> 00:01:44,560 Speaker 1: never taken a physics class? No, it's okay, and it's okay. 32 00:01:44,600 --> 00:01:47,680 Speaker 1: Did you take chemistry? That's totally okay. I almost failed 33 00:01:47,680 --> 00:01:50,200 Speaker 1: the chemists. Okay, she almost sail chemistry. But you're really 34 00:01:50,200 --> 00:01:53,040 Speaker 1: good at writing about bonds. She knows everything about crypto 35 00:01:53,400 --> 00:01:55,320 Speaker 1: very specific time. But let's take a step back and 36 00:01:55,320 --> 00:01:57,760 Speaker 1: talk about how steel is made and why it's so 37 00:01:57,880 --> 00:02:00,040 Speaker 1: energy intensive. So take us through that and can I 38 00:02:00,040 --> 00:02:01,440 Speaker 1: don't know why I threw you under the bus, now, 39 00:02:01,520 --> 00:02:05,840 Speaker 1: it's fun. I should have tried harder, but I was 40 00:02:05,880 --> 00:02:08,240 Speaker 1: steel made. Yeah, well, I am not an engineer, but 41 00:02:08,280 --> 00:02:10,320 Speaker 1: I will tell you in from what I understand. So 42 00:02:10,400 --> 00:02:12,560 Speaker 1: you know, I joined you a steal about eight months ago, 43 00:02:12,600 --> 00:02:15,400 Speaker 1: and I knew nothing about steel. I worked for Dell Technologies. 44 00:02:15,960 --> 00:02:20,639 Speaker 1: But um, it's fascinating. Steel is made in one way, 45 00:02:20,680 --> 00:02:23,119 Speaker 1: which is a traditional way of integrated steel making that's 46 00:02:23,120 --> 00:02:25,720 Speaker 1: been done for over a hundred twenty years, where you 47 00:02:25,720 --> 00:02:28,799 Speaker 1: have a blast furnace, a lot of ingredients supporting and 48 00:02:28,840 --> 00:02:32,200 Speaker 1: then you've got liquid iron coming out and eventually steel. Um. 49 00:02:32,400 --> 00:02:36,680 Speaker 1: The newer technology uses what is called electric arc furnace technology, 50 00:02:36,760 --> 00:02:38,560 Speaker 1: and that is what is referred to as many mills, 51 00:02:38,800 --> 00:02:40,880 Speaker 1: and that has a lower carbon footprint, up to about 52 00:02:40,880 --> 00:02:45,760 Speaker 1: seventy reduction in carbon footprint for steel. So one of 53 00:02:45,800 --> 00:02:50,080 Speaker 1: the interesting things about steel is it's definitely recyclable. It 54 00:02:50,160 --> 00:02:53,400 Speaker 1: loses none of its properties. And so I like to 55 00:02:53,440 --> 00:02:56,560 Speaker 1: say that is that energy intensive go to recycle it? Um, 56 00:02:56,720 --> 00:02:58,640 Speaker 1: you know, we actually use it as an energy source. 57 00:02:59,360 --> 00:03:01,640 Speaker 1: So up to a percent of scrap steel can be 58 00:03:01,720 --> 00:03:05,519 Speaker 1: used in our electric arc furnaces. So we've been practicing 59 00:03:05,560 --> 00:03:08,960 Speaker 1: circular economy before circular economy became a thing. Um. We 60 00:03:09,040 --> 00:03:11,480 Speaker 1: recycled last year. We're five point two million tons of 61 00:03:11,480 --> 00:03:14,360 Speaker 1: steel and scrap. And so if I look at your notes, 62 00:03:14,680 --> 00:03:17,280 Speaker 1: this stat really jumped out to me that steel is, 63 00:03:17,960 --> 00:03:21,360 Speaker 1: of course an emissions intensive sector, counting for roughly seven 64 00:03:21,400 --> 00:03:25,240 Speaker 1: percent of global greenhouse gas emissions globally. And again I'm 65 00:03:25,280 --> 00:03:28,320 Speaker 1: a little shaky on the science, but the process you 66 00:03:28,440 --> 00:03:32,560 Speaker 1: just described what's realistic if we think about where that 67 00:03:32,680 --> 00:03:36,360 Speaker 1: seven percent can could go to. So you know it's 68 00:03:36,400 --> 00:03:38,080 Speaker 1: going to take a competation things. You know, we know 69 00:03:38,160 --> 00:03:40,040 Speaker 1: we can't do it alone, right, one company can't do 70 00:03:40,080 --> 00:03:42,160 Speaker 1: it alone. It is we've got to come together and 71 00:03:42,240 --> 00:03:45,400 Speaker 1: a lot of things have to happen, like government funding, 72 00:03:45,640 --> 00:03:49,119 Speaker 1: you know, policy to support it, UM, improve regulations and 73 00:03:49,400 --> 00:03:52,120 Speaker 1: all of that. But I think that the really important 74 00:03:52,200 --> 00:03:56,400 Speaker 1: thing on getting to that is exploration of technologies that 75 00:03:56,440 --> 00:03:59,080 Speaker 1: can help us get there, like green hydrogen. Have you 76 00:03:59,080 --> 00:04:05,720 Speaker 1: heard of green hydrogen? CEO Andy marsh On, Our program 77 00:04:06,120 --> 00:04:09,040 Speaker 1: works a lot with hydrogen and work with companies all over. Yeah, 78 00:04:09,280 --> 00:04:12,080 Speaker 1: So the availability of green hydrogen is going to help 79 00:04:12,440 --> 00:04:16,000 Speaker 1: lower the intensity of steelmaking. UM. A lot of other 80 00:04:16,040 --> 00:04:21,320 Speaker 1: technologies like electrification, UM direct reduced iron with hydrogen, A 81 00:04:21,320 --> 00:04:24,240 Speaker 1: lot of different technologies need to come to maturity and 82 00:04:24,440 --> 00:04:28,719 Speaker 1: carbon capture utilization storage as well. Earlier this week we 83 00:04:28,760 --> 00:04:32,960 Speaker 1: had on our program Dr Andrew Forrest of fortescuew uh 84 00:04:33,000 --> 00:04:36,520 Speaker 1: and he's uh, it's an holding company that owns a 85 00:04:36,560 --> 00:04:40,119 Speaker 1: bunch of minds in Australia. Uh. And their competitors include 86 00:04:40,160 --> 00:04:42,640 Speaker 1: real Tinto and more. And it's mining, so it's not 87 00:04:42,680 --> 00:04:47,040 Speaker 1: necessarily the processing of it, but they're looking to decarbonize completely. 88 00:04:47,520 --> 00:04:50,520 Speaker 1: What are your goals at us steel like like And 89 00:04:50,760 --> 00:04:54,000 Speaker 1: he's not talking carbon credits or carbon offsets here, he's 90 00:04:54,040 --> 00:04:57,960 Speaker 1: literally talking like, you know, moving completely away from fossil 91 00:04:58,000 --> 00:05:00,840 Speaker 1: fuels in a real way. Yeah, absolute lutely and that's 92 00:05:00,839 --> 00:05:03,680 Speaker 1: why we actually set last year are net zero goals. 93 00:05:03,680 --> 00:05:05,800 Speaker 1: So we've committed to become net zero. So that's an 94 00:05:05,839 --> 00:05:10,080 Speaker 1: absolute reduction in emissions absolute emissions production by and we 95 00:05:10,080 --> 00:05:12,120 Speaker 1: have an interim my missions intensity to go along the way. 96 00:05:12,160 --> 00:05:16,000 Speaker 1: But that is the same UM spirit that we're taking 97 00:05:16,200 --> 00:05:20,400 Speaker 1: is we have to invest and explore in the technologies 98 00:05:20,440 --> 00:05:24,359 Speaker 1: and energy usage as well that will absolutely decarbonize our 99 00:05:24,360 --> 00:05:28,040 Speaker 1: footprint UM. And we are not relying on carbon offset 100 00:05:28,160 --> 00:05:30,280 Speaker 1: to to get us there, but there are a lot 101 00:05:30,320 --> 00:05:32,520 Speaker 1: of things that we need right um to to support 102 00:05:32,560 --> 00:05:34,640 Speaker 1: us in that journey. We'll sit tight with us. Erica. 103 00:05:34,680 --> 00:05:36,640 Speaker 1: We're gonna be back with you in just a few minutes. 104 00:05:36,720 --> 00:05:39,760 Speaker 1: Erika Chan, general manager of Sustainability at U S Steal. 105 00:05:39,800 --> 00:05:43,240 Speaker 1: She's with us right now in the Bloomberg Interactive Broker's studio. 106 00:05:43,240 --> 00:05:47,119 Speaker 1: You're listening to Bloomberg Business Week and this is Bloomberg Radio. 107 00:05:49,760 --> 00:05:52,080 Speaker 1: Let's get right back to Erica Chan, general manager of 108 00:05:52,080 --> 00:05:54,839 Speaker 1: sustainability at US Steel. She's with us right now in 109 00:05:54,880 --> 00:05:58,760 Speaker 1: the Bloomberg Interactive Broker's studio. So, Erica, I want to 110 00:05:58,800 --> 00:06:01,400 Speaker 1: talk more about sustainability of course at US Steel and 111 00:06:01,440 --> 00:06:06,440 Speaker 1: specifically about the plan to eliminate carbon emissions from steel production. UM, 112 00:06:06,640 --> 00:06:10,280 Speaker 1: is it is it too early to completely like how 113 00:06:10,320 --> 00:06:13,359 Speaker 1: do you guys completely comply with E A S and 114 00:06:13,400 --> 00:06:15,839 Speaker 1: like go to mini malls that use all the scrap 115 00:06:15,880 --> 00:06:18,400 Speaker 1: steel to remailed into new steel. Talk about how that works. Yeah, 116 00:06:18,800 --> 00:06:22,039 Speaker 1: So you know, we have we acquire a Big River 117 00:06:22,080 --> 00:06:25,120 Speaker 1: Steel which actually was the first LEAD certified steel mill 118 00:06:25,200 --> 00:06:28,400 Speaker 1: in the US. UM and it's also the first US 119 00:06:28,480 --> 00:06:32,080 Speaker 1: based steel site to be persponsible steel certified. So um 120 00:06:32,080 --> 00:06:34,640 Speaker 1: that is our first electric arc furnace along with the 121 00:06:34,800 --> 00:06:38,640 Speaker 1: one that we have a ver tubular business in Fairfield, Alabama. 122 00:06:38,960 --> 00:06:42,839 Speaker 1: So the journey there is that it's it's a combination 123 00:06:43,040 --> 00:06:47,479 Speaker 1: of utilization of this improved technology for steelmaking UM, but 124 00:06:47,560 --> 00:06:51,440 Speaker 1: as well as investing in UM technologies that can help 125 00:06:51,480 --> 00:06:55,880 Speaker 1: actually decarbonize so UM carbon capture utilization and storage. That's 126 00:06:55,920 --> 00:06:58,920 Speaker 1: one method as well. We talked about green hydrogen earlier. 127 00:06:59,640 --> 00:07:02,400 Speaker 1: Um A electrification of the grid because steel is so 128 00:07:02,600 --> 00:07:05,440 Speaker 1: energy intensive, you know, we need more renewable energy in 129 00:07:05,480 --> 00:07:08,440 Speaker 1: the grid and the grid infrastructure that can support that 130 00:07:08,760 --> 00:07:11,560 Speaker 1: expanded power need. So UM, those are some of the 131 00:07:11,560 --> 00:07:13,280 Speaker 1: ways that we're looking at it. When it comes to 132 00:07:13,320 --> 00:07:16,320 Speaker 1: carbon capture with the current furnaces, you have the current 133 00:07:16,400 --> 00:07:20,920 Speaker 1: blast furnaces. Does that work? What research have you done there? Yeah? 134 00:07:20,960 --> 00:07:24,080 Speaker 1: So UM we actually have formed some partnerships and alliances 135 00:07:24,200 --> 00:07:26,840 Speaker 1: we're bringing together in a noncompetitive environment like peers in 136 00:07:26,880 --> 00:07:31,240 Speaker 1: academia UM as well as government agencies to look at 137 00:07:31,440 --> 00:07:34,200 Speaker 1: how do we escale and how do we implement that 138 00:07:34,240 --> 00:07:37,560 Speaker 1: infrastructure because it doesn't exist in a in a scale 139 00:07:37,560 --> 00:07:39,200 Speaker 1: at a level that we would need, you know, to 140 00:07:39,240 --> 00:07:41,320 Speaker 1: cover all of the last finn assess to our an 141 00:07:41,320 --> 00:07:43,840 Speaker 1: operation today in the US, what is the role of 142 00:07:43,840 --> 00:07:47,160 Speaker 1: the government here, and to what extent does the US 143 00:07:47,240 --> 00:07:50,880 Speaker 1: government need to step in and actually help you and 144 00:07:50,960 --> 00:07:54,440 Speaker 1: other American steel companies get to net zero? Yeah? Absolutely, 145 00:07:54,440 --> 00:07:55,920 Speaker 1: I mean I think we've seen a big signal from 146 00:07:55,960 --> 00:07:58,960 Speaker 1: the government, um, just in the past few weeks, right 147 00:07:59,000 --> 00:08:01,800 Speaker 1: with the IRA and I think that's going to be 148 00:08:01,840 --> 00:08:05,720 Speaker 1: a good first forward movement into making sure that the 149 00:08:05,760 --> 00:08:09,520 Speaker 1: US government enables the various levels that we need to 150 00:08:09,520 --> 00:08:13,280 Speaker 1: to carbonize across a number of different industries. And so, 151 00:08:13,440 --> 00:08:17,000 Speaker 1: what kind of relationship, what kind of conversations do you 152 00:08:17,040 --> 00:08:21,160 Speaker 1: have with politicians with the White House? What does that 153 00:08:21,200 --> 00:08:25,400 Speaker 1: look like? Yeah, well, we actually welcome engagement from policymakers 154 00:08:25,440 --> 00:08:28,160 Speaker 1: on all levels, federals. You know, we work very local 155 00:08:28,200 --> 00:08:32,000 Speaker 1: in our communities as well, and it's it's looking at 156 00:08:32,080 --> 00:08:35,000 Speaker 1: the policies that can enable like clean energy, right, like 157 00:08:35,080 --> 00:08:39,920 Speaker 1: renewable incentives for renewable energy, infrastructure and development. So we 158 00:08:40,200 --> 00:08:44,440 Speaker 1: do work with regulators and administrators and various agencies at 159 00:08:44,480 --> 00:08:47,000 Speaker 1: a federal and stand local level. Who are those regulators? 160 00:08:47,600 --> 00:08:50,520 Speaker 1: Who are the politicians that you're actually speaking to on 161 00:08:50,559 --> 00:08:54,400 Speaker 1: a regular basis, So it's a number of different ones. 162 00:08:54,440 --> 00:08:57,600 Speaker 1: And my colleagues who work in government affairs, are you know, 163 00:08:57,640 --> 00:09:00,200 Speaker 1: the ones who are the primary leads on that. My 164 00:09:00,360 --> 00:09:03,160 Speaker 1: role in sustainability and I focus on looking at the 165 00:09:03,200 --> 00:09:07,600 Speaker 1: overall corporate sustainability strategy and how do we meet our goals, 166 00:09:07,880 --> 00:09:12,640 Speaker 1: how do we advance on our commitments to UM, you know, 167 00:09:12,720 --> 00:09:16,479 Speaker 1: be more sustainable company, to offer more profitable steel solutions 168 00:09:16,480 --> 00:09:19,480 Speaker 1: for our customers. Because our customers are really the ones 169 00:09:19,520 --> 00:09:21,880 Speaker 1: who are also at the forefront of this, right because 170 00:09:22,040 --> 00:09:25,080 Speaker 1: in the sense that they're demanding exactly well, so how 171 00:09:25,160 --> 00:09:28,120 Speaker 1: much of this is driven internally versus externally? I think 172 00:09:28,120 --> 00:09:31,400 Speaker 1: it's a it's a good healthy combination. UM. So our 173 00:09:31,440 --> 00:09:34,719 Speaker 1: customers have their own expectations, like their own commitments. UM. 174 00:09:34,760 --> 00:09:38,120 Speaker 1: Whether you're an auto manufacturer and appliance manufacturer, you want 175 00:09:38,160 --> 00:09:41,440 Speaker 1: to offer more sustainable products to your customers, and in 176 00:09:41,520 --> 00:09:44,120 Speaker 1: order to do that, you need more sustainable materials, right, 177 00:09:44,160 --> 00:09:46,560 Speaker 1: whether it's steel or you know, some other material that 178 00:09:46,600 --> 00:09:48,880 Speaker 1: goes into making up and erico. I want to talk 179 00:09:48,880 --> 00:09:51,480 Speaker 1: a little bit about you, uh and Drew role at 180 00:09:51,559 --> 00:09:53,559 Speaker 1: u S Steel. You said that you joined eight months ago. 181 00:09:53,559 --> 00:09:55,880 Speaker 1: Where did you come from? So? I worked at Dell 182 00:09:55,920 --> 00:09:58,680 Speaker 1: Technologies that was also in corporate sustainability and I worked 183 00:09:58,720 --> 00:10:01,640 Speaker 1: there for over eleven years. Um So it was a 184 00:10:01,679 --> 00:10:05,520 Speaker 1: really interesting journey to come over to the steel sector, 185 00:10:05,559 --> 00:10:08,120 Speaker 1: which I knew nothing about. I'm not an engineer, I 186 00:10:08,160 --> 00:10:11,160 Speaker 1: don't have a PhD. And metallurgy. Yeah, I don't think 187 00:10:11,160 --> 00:10:14,200 Speaker 1: I failed my physics class though, but I didn't even 188 00:10:14,440 --> 00:10:19,040 Speaker 1: take I didn't even take physics. I failed chemistry. Mr 189 00:10:19,120 --> 00:10:21,360 Speaker 1: Harris from my high school was listening to this, maybe 190 00:10:21,480 --> 00:10:25,040 Speaker 1: so he would know how it wasn't so great. Um So, 191 00:10:25,240 --> 00:10:27,760 Speaker 1: I do think that's really interesting that you went from 192 00:10:27,920 --> 00:10:31,600 Speaker 1: Dell Technologies to U S. Steel sort of from uh, 193 00:10:31,679 --> 00:10:37,600 Speaker 1: you know, technology to an industrial industry. Why that leap 194 00:10:37,920 --> 00:10:41,720 Speaker 1: in particular? So what I saw in US Steel was 195 00:10:41,760 --> 00:10:45,880 Speaker 1: the opportunity to join an iconic company that I saw 196 00:10:46,080 --> 00:10:49,440 Speaker 1: was on a solid journey towards transformation. Right. It's not 197 00:10:49,520 --> 00:10:51,559 Speaker 1: just I'm going to announce these goals and do nothing 198 00:10:51,600 --> 00:10:54,480 Speaker 1: about it. There were solid plans in place and actions 199 00:10:54,520 --> 00:10:57,280 Speaker 1: being taken, and so I wanted to be part of that. 200 00:10:57,320 --> 00:11:00,760 Speaker 1: I wanted to, you know, bring my practice around sustainability 201 00:11:00,760 --> 00:11:04,000 Speaker 1: and my knowledge to kind of help evolve the foundation 202 00:11:04,040 --> 00:11:06,439 Speaker 1: already that was there. And so, um and I love 203 00:11:06,440 --> 00:11:09,440 Speaker 1: a good challenge. So yeah, we only have thirty seconds left. 204 00:11:09,440 --> 00:11:12,000 Speaker 1: But you've been there for eight months. Where how big 205 00:11:12,000 --> 00:11:14,080 Speaker 1: of the change has been since you've been there? What 206 00:11:14,120 --> 00:11:16,960 Speaker 1: can you tell us? So? Cultural wise it's different, right, 207 00:11:17,000 --> 00:11:20,240 Speaker 1: going from a hundred fifty thousand global you know company 208 00:11:20,320 --> 00:11:23,880 Speaker 1: to a twenty four thousand I think I'm gonna stet right, um, 209 00:11:24,120 --> 00:11:27,439 Speaker 1: employee world by both US and then you and Slovakia 210 00:11:27,480 --> 00:11:30,240 Speaker 1: and UM. What I found is that it is a 211 00:11:30,400 --> 00:11:36,760 Speaker 1: very warm and embracing culture. We have employees who have 212 00:11:36,920 --> 00:11:40,040 Speaker 1: worked there like for multi generations, like for four generations, 213 00:11:40,320 --> 00:11:42,880 Speaker 1: and that is something you really don't see in corporate 214 00:11:42,880 --> 00:11:46,720 Speaker 1: America today. So UM, the environment has been very warm 215 00:11:46,720 --> 00:11:49,640 Speaker 1: and welcoming. So it's been a really great experience. Well 216 00:11:49,720 --> 00:11:51,600 Speaker 1: please do come back and join us once again when 217 00:11:51,640 --> 00:11:53,559 Speaker 1: you are back in New York City. Very pleased to 218 00:11:53,559 --> 00:11:56,680 Speaker 1: have with us. Erika Chan, general manager of Sustainability at US, 219 00:11:56,760 --> 00:11:59,320 Speaker 1: deal with US in the Bloomberg Interactive Broker Studios in 220 00:11:59,360 --> 00:11:59,840 Speaker 1: New York