Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, there's
Speaker 1: some hard truths in this world. Steel is dirty. About
Speaker 1: seven percent of global greenhouse gas emissions come from steel.
Speaker 1: But it's also the most used metal in the world.
Speaker 1: We need it and right now we can't live without it.
Speaker 1: We have with us this afternoon, Erica Chan, general manager
Speaker 1: of sustainability at US Steel, a four point for billion
Speaker 1: dollar company with a market cap of four point four
Speaker 1: billion dollars. She's with us right now in the Bloomberg
Speaker 1: Interactive Broker's studio. Erica, it's good to have you with us.
Speaker 1: How are you. I'm doing well. Thank you for having me. Yeah, well,
Speaker 1: thanks for joining us. So how do we do this?
Speaker 1: How do we make the steel industry not responsible for
Speaker 1: seven percent of global emissions? Well, it's going to take
Speaker 1: a lot of things for that to happen. And the
Speaker 1: good news is is that everyone is coming together to
Speaker 1: address this problem. So, um, I'll give you an example
Speaker 1: of collaboration today, The Climate Aligned Fience with the R
Speaker 1: and MY organization and several banks, including I n G,
Speaker 1: launched these sustainable Steel Principles, and this is designed to
Speaker 1: standardize how banks support and finance the steel sector in
Speaker 1: order to accelerate a decarbonization journey. So that's one of
Speaker 1: the ways. Another thing that we're doing at you is
Speaker 1: still in particular is which is really unique, is that
Speaker 1: we've integrated sustainability into our business strategy. So everything that
Speaker 1: we do is integrated across our operations, across our enterprise. Okay,
Speaker 1: I want to just step back because Katie and I
Speaker 1: were talking a little bit earlier about science, and she
Speaker 1: revealed to me, what are you going to say, has
Speaker 1: never taken a physics class? No, it's okay, and it's okay.
Speaker 1: Did you take chemistry? That's totally okay. I almost failed
Speaker 1: the chemists. Okay, she almost sail chemistry. But you're really
Speaker 1: good at writing about bonds. She knows everything about crypto
Speaker 1: very specific time. But let's take a step back and
Speaker 1: talk about how steel is made and why it's so
Speaker 1: energy intensive. So take us through that and can I
Speaker 1: don't know why I threw you under the bus, now,
Speaker 1: it's fun. I should have tried harder, but I was
Speaker 1: steel made. Yeah, well, I am not an engineer, but
Speaker 1: I will tell you in from what I understand. So
Speaker 1: you know, I joined you a steal about eight months ago,
Speaker 1: and I knew nothing about steel. I worked for Dell Technologies.
Speaker 1: But um, it's fascinating. Steel is made in one way,
Speaker 1: which is a traditional way of integrated steel making that's
Speaker 1: been done for over a hundred twenty years, where you
Speaker 1: have a blast furnace, a lot of ingredients supporting and
Speaker 1: then you've got liquid iron coming out and eventually steel. Um.
Speaker 1: The newer technology uses what is called electric arc furnace technology,
Speaker 1: and that is what is referred to as many mills,
Speaker 1: and that has a lower carbon footprint, up to about
Speaker 1: seventy reduction in carbon footprint for steel. So one of
Speaker 1: the interesting things about steel is it's definitely recyclable. It
Speaker 1: loses none of its properties. And so I like to
Speaker 1: say that is that energy intensive go to recycle it? Um,
Speaker 1: you know, we actually use it as an energy source.
Speaker 1: So up to a percent of scrap steel can be
Speaker 1: used in our electric arc furnaces. So we've been practicing
Speaker 1: circular economy before circular economy became a thing. Um. We
Speaker 1: recycled last year. We're five point two million tons of
Speaker 1: steel and scrap. And so if I look at your notes,
Speaker 1: this stat really jumped out to me that steel is,
Speaker 1: of course an emissions intensive sector, counting for roughly seven
Speaker 1: percent of global greenhouse gas emissions globally. And again I'm
Speaker 1: a little shaky on the science, but the process you
Speaker 1: just described what's realistic if we think about where that
Speaker 1: seven percent can could go to. So you know it's
Speaker 1: going to take a competation things. You know, we know
Speaker 1: we can't do it alone, right, one company can't do
Speaker 1: it alone. It is we've got to come together and
Speaker 1: a lot of things have to happen, like government funding,
Speaker 1: you know, policy to support it, UM, improve regulations and
Speaker 1: all of that. But I think that the really important
Speaker 1: thing on getting to that is exploration of technologies that
Speaker 1: can help us get there, like green hydrogen. Have you
Speaker 1: heard of green hydrogen? CEO Andy marsh On, Our program
Speaker 1: works a lot with hydrogen and work with companies all over. Yeah,
Speaker 1: So the availability of green hydrogen is going to help
Speaker 1: lower the intensity of steelmaking. UM. A lot of other
Speaker 1: technologies like electrification, UM direct reduced iron with hydrogen, A
Speaker 1: lot of different technologies need to come to maturity and
Speaker 1: carbon capture utilization storage as well. Earlier this week we
Speaker 1: had on our program Dr Andrew Forrest of fortescuew uh
Speaker 1: and he's uh, it's an holding company that owns a
Speaker 1: bunch of minds in Australia. Uh. And their competitors include
Speaker 1: real Tinto and more. And it's mining, so it's not
Speaker 1: necessarily the processing of it, but they're looking to decarbonize completely.
Speaker 1: What are your goals at us steel like like And
Speaker 1: he's not talking carbon credits or carbon offsets here, he's
Speaker 1: literally talking like, you know, moving completely away from fossil
Speaker 1: fuels in a real way. Yeah, absolute lutely and that's
Speaker 1: why we actually set last year are net zero goals.
Speaker 1: So we've committed to become net zero. So that's an
Speaker 1: absolute reduction in emissions absolute emissions production by and we
Speaker 1: have an interim my missions intensity to go along the way.
Speaker 1: But that is the same UM spirit that we're taking
Speaker 1: is we have to invest and explore in the technologies
Speaker 1: and energy usage as well that will absolutely decarbonize our
Speaker 1: footprint UM. And we are not relying on carbon offset
Speaker 1: to to get us there, but there are a lot
Speaker 1: of things that we need right um to to support
Speaker 1: us in that journey. We'll sit tight with us. Erica.
Speaker 1: We're gonna be back with you in just a few minutes.
Speaker 1: Erika Chan, general manager of Sustainability at U S Steal.
Speaker 1: She's with us right now in the Bloomberg Interactive Broker's studio.
Speaker 1: You're listening to Bloomberg Business Week and this is Bloomberg Radio.
Speaker 1: Let's get right back to Erica Chan, general manager of
Speaker 1: sustainability at US Steel. She's with us right now in
Speaker 1: the Bloomberg Interactive Broker's studio. So, Erica, I want to
Speaker 1: talk more about sustainability of course at US Steel and
Speaker 1: specifically about the plan to eliminate carbon emissions from steel production. UM,
Speaker 1: is it is it too early to completely like how
Speaker 1: do you guys completely comply with E A S and
Speaker 1: like go to mini malls that use all the scrap
Speaker 1: steel to remailed into new steel. Talk about how that works. Yeah,
Speaker 1: So you know, we have we acquire a Big River
Speaker 1: Steel which actually was the first LEAD certified steel mill
Speaker 1: in the US. UM and it's also the first US
Speaker 1: based steel site to be persponsible steel certified. So um
Speaker 1: that is our first electric arc furnace along with the
Speaker 1: one that we have a ver tubular business in Fairfield, Alabama.
Speaker 1: So the journey there is that it's it's a combination
Speaker 1: of utilization of this improved technology for steelmaking UM, but
Speaker 1: as well as investing in UM technologies that can help
Speaker 1: actually decarbonize so UM carbon capture utilization and storage. That's
Speaker 1: one method as well. We talked about green hydrogen earlier.
Speaker 1: Um A electrification of the grid because steel is so
Speaker 1: energy intensive, you know, we need more renewable energy in
Speaker 1: the grid and the grid infrastructure that can support that
Speaker 1: expanded power need. So UM, those are some of the
Speaker 1: ways that we're looking at it. When it comes to
Speaker 1: carbon capture with the current furnaces, you have the current
Speaker 1: blast furnaces. Does that work? What research have you done there? Yeah?
Speaker 1: So UM we actually have formed some partnerships and alliances
Speaker 1: we're bringing together in a noncompetitive environment like peers in
Speaker 1: academia UM as well as government agencies to look at
Speaker 1: how do we escale and how do we implement that
Speaker 1: infrastructure because it doesn't exist in a in a scale
Speaker 1: at a level that we would need, you know, to
Speaker 1: cover all of the last finn assess to our an
Speaker 1: operation today in the US, what is the role of
Speaker 1: the government here, and to what extent does the US
Speaker 1: government need to step in and actually help you and
Speaker 1: other American steel companies get to net zero? Yeah? Absolutely,
Speaker 1: I mean I think we've seen a big signal from
Speaker 1: the government, um, just in the past few weeks, right
Speaker 1: with the IRA and I think that's going to be
Speaker 1: a good first forward movement into making sure that the
Speaker 1: US government enables the various levels that we need to
Speaker 1: to carbonize across a number of different industries. And so,
Speaker 1: what kind of relationship, what kind of conversations do you
Speaker 1: have with politicians with the White House? What does that
Speaker 1: look like? Yeah, well, we actually welcome engagement from policymakers
Speaker 1: on all levels, federals. You know, we work very local
Speaker 1: in our communities as well, and it's it's looking at
Speaker 1: the policies that can enable like clean energy, right, like
Speaker 1: renewable incentives for renewable energy, infrastructure and development. So we
Speaker 1: do work with regulators and administrators and various agencies at
Speaker 1: a federal and stand local level. Who are those regulators?
Speaker 1: Who are the politicians that you're actually speaking to on
Speaker 1: a regular basis, So it's a number of different ones.
Speaker 1: And my colleagues who work in government affairs, are you know,
Speaker 1: the ones who are the primary leads on that. My
Speaker 1: role in sustainability and I focus on looking at the
Speaker 1: overall corporate sustainability strategy and how do we meet our goals,
Speaker 1: how do we advance on our commitments to UM, you know,
Speaker 1: be more sustainable company, to offer more profitable steel solutions
Speaker 1: for our customers. Because our customers are really the ones
Speaker 1: who are also at the forefront of this, right because
Speaker 1: in the sense that they're demanding exactly well, so how
Speaker 1: much of this is driven internally versus externally? I think
Speaker 1: it's a it's a good healthy combination. UM. So our
Speaker 1: customers have their own expectations, like their own commitments. UM.
Speaker 1: Whether you're an auto manufacturer and appliance manufacturer, you want
Speaker 1: to offer more sustainable products to your customers, and in
Speaker 1: order to do that, you need more sustainable materials, right,
Speaker 1: whether it's steel or you know, some other material that
Speaker 1: goes into making up and erico. I want to talk
Speaker 1: a little bit about you, uh and Drew role at
Speaker 1: u S Steel. You said that you joined eight months ago.
Speaker 1: Where did you come from? So? I worked at Dell
Speaker 1: Technologies that was also in corporate sustainability and I worked
Speaker 1: there for over eleven years. Um So it was a
Speaker 1: really interesting journey to come over to the steel sector,
Speaker 1: which I knew nothing about. I'm not an engineer, I
Speaker 1: don't have a PhD. And metallurgy. Yeah, I don't think
Speaker 1: I failed my physics class though, but I didn't even
Speaker 1: take I didn't even take physics. I failed chemistry. Mr
Speaker 1: Harris from my high school was listening to this, maybe
Speaker 1: so he would know how it wasn't so great. Um So,
Speaker 1: I do think that's really interesting that you went from
Speaker 1: Dell Technologies to U S. Steel sort of from uh,
Speaker 1: you know, technology to an industrial industry. Why that leap
Speaker 1: in particular? So what I saw in US Steel was
Speaker 1: the opportunity to join an iconic company that I saw
Speaker 1: was on a solid journey towards transformation. Right. It's not
Speaker 1: just I'm going to announce these goals and do nothing
Speaker 1: about it. There were solid plans in place and actions
Speaker 1: being taken, and so I wanted to be part of that.
Speaker 1: I wanted to, you know, bring my practice around sustainability
Speaker 1: and my knowledge to kind of help evolve the foundation
Speaker 1: already that was there. And so, um and I love
Speaker 1: a good challenge. So yeah, we only have thirty seconds left.
Speaker 1: But you've been there for eight months. Where how big
Speaker 1: of the change has been since you've been there? What
Speaker 1: can you tell us? So? Cultural wise it's different, right,
Speaker 1: going from a hundred fifty thousand global you know company
Speaker 1: to a twenty four thousand I think I'm gonna stet right, um,
Speaker 1: employee world by both US and then you and Slovakia
Speaker 1: and UM. What I found is that it is a
Speaker 1: very warm and embracing culture. We have employees who have
Speaker 1: worked there like for multi generations, like for four generations,
Speaker 1: and that is something you really don't see in corporate
Speaker 1: America today. So UM, the environment has been very warm
Speaker 1: and welcoming. So it's been a really great experience. Well
Speaker 1: please do come back and join us once again when
Speaker 1: you are back in New York City. Very pleased to
Speaker 1: have with us. Erika Chan, general manager of Sustainability at US,
Speaker 1: deal with US in the Bloomberg Interactive Broker Studios in
Speaker 1: New York