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Climate and Energy

 

The severity and urgency of the climate crisis has become increasingly clear. The global economy needs to rapidly reduce carbon emissions, halving them by 2030 and reaching net-zero by 2050. RHI Magnesita is accelerating the Company’s climate action.

Climate Governance and Risk

Our climate strategy and progress is regularly reviewed by both the Board and our senior leadership. We have completed an in-depth assessment of climate risks to our business. These include physical risks, such as extreme weather events, disruption to operations and supply chain; as well as transitional risks, such as current and emerging regulations, technology, marketplace and reputation.

We completed our first climate submission to the CDP (formerly the Carbon Disclosure Project) in 2019, gaining a C rating. We are also exploring how to implement the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).

 

  Targets by 2025 verssus 2018 Progress in 2019
CO2 emissions Reduce by 15% per tonne of product (Scope 1. 2,3 (raw materials) Reduced by 5%
Energy Reduce by 5% per tonne product Energy efficiency projects implemented: saving not yet seen due to softer production volumes
NOx and SOx emissions Reduce by 30% by 2027 (vs 2018), starting with China by 2021 Achieved in all pre-existing China sites – under implementation in Chizhou plants
Recycling Increase use of secondary raw materials to 10% Secondary raw materials accounted for 4.7% in 2019
Diversity Increase women on our Board and in senior leadership to 33% Board: 23% female EMT & direct reports: 17%
Safety Maintain LTIF at <0,5 (goal: zero accidents) Achieved LTIF of 0.28 in 2019

 

 

Our Target and Progress

In 2019, we revised upward our emissions reduction target, almost doubling it by including Scope 3 emissions from raw materials. Our commitment is now to reduce Scope 1, 2 and 3 emissions (raw materials) by 15% by 2025, while improving energy efficiency by 5%. We are also investigating how RHI Magnesita could adopt a Science-Based Target for carbon emissions reduction.

 

CO2 Emissions   Absolute Emissions (tonne of CO2)     Relative Emissions (t CO2 per tonne of product)  
 

2018
(base year)

2019 Change vs
2018
2018 2019 Change vs
2018
Scope 1 2,629,000 2,275,000 -354,000 0.85 0.81 -4,5%
Of which geogenic emissions 1,413,000 1,194,000 -219,000 0.46 0.43 -6.7%
Of which fuel-based emissions 1,165,000 1,051,000 -114,000 0.38 0.37 -0.4%
Scope 2 207,000 190,000 -17,000 0.07 0.07 1.3%
Scope 3 (raw materials) 2,536,000 2,157,000 -379,000 0.82 0.77 -6.1%
Total 5,372,000 4,622,000 -750,000 1.74 1.65 -5.0%

 

Our Approach

Our climate strategy spans our value chain and includes the following elements:

  • Providing innovative solutions to reduce customer emissions
  • Decreasing the carbon footprint of our raw materials
  • Increasing energy efficiency in our operations and
  • Reducing the carbon intensity of our energy sources.

Innovative Customer Solutions

The steel and cement industries represent approximately 80% of our customers. They are also major carbon emitters. Helping these customers improve energy efficiency in production can thereby reduce associated emissions.

Our new full-service solutions include:

  • Recycling services that help customers optimise production, increasing energy and resource efficiency
  • Working with customers to reduce consumption by extending the life of refractories
  • Coating technologies that improve refractory performance and energy efficiency in customer production processes
  • Digital solutions such as our Automated Process Optimisation (APO) that can reduce energy-intensive stoppages and optimise production
  • Helping customers digitise operational control to increase productivity and energy savings.

Reducing Raw Material Emissions

Geogenic emissions from raw materials represent almost half of our direct emissions (Scope 1 and 2). Carbon dioxide (CO2) is released when the raw magnesite (MgCO3) is processed into magnesium oxide (MgO), the basis for many refractory products.

These process emissions represent another major focus area of R&D investment, increasing recycled content in particular. By using recycled content, we avoid the geogenic emissions of virgin materials. We are increasing our use of recycled content and expanding our global recycling capacity. Find more information here.

We also research the best ways to capture and manage process emissions.

To develop breakthrough technologies, we work with others, such as the European Cement Research Academy (ECRA) and the K1-MET consortium which includes steel manufacturers, universities, start-ups and open-innovation platforms. In addition, we are setting up research partnerships with universities and others, including accelerators, start-ups and open innovation platforms.

Reducing the Carbon Intensity of Energy

We are assessing our potential to reduce Scope 3 emissions from electricity consumption. In addition, we aim to increase the proportion of renewables in our energy mix through on-site generation and purchasing.

At present, we cannot use renewables as our primary source of energy, given the high temperatures and quantities required by our business. Our production sites therefore still depend on carbon-intensive fossil fuels. Switching to alternatives is a highly challenging transition which we continue to explore.

Where feasible, we are moving from petroleum coke and oil to natural gas, the cleanest fossil fuel. In 2019, gas accounted for 53% of fuel used by our business.

Increasing Energy Efficiency

New production techniques are allowing us to improve energy efficiency. For example, we can now dry pre-cast shapes for 2.5 hours compared to the traditional five days.

In addition, we now achieve the same performance from refractory bricks tempered at 200°C that was previously possible only by firing at temperatures exceeding 1,500°C.

Energy efficiency initiatives are expected to save up to 61 GWh per year, more than 1% of our energy consumption in 2019.

Energy

 

2018

2019

 

Energy use by source

Consumption (GWh)

Percentage of total

Consumption (GWh)

Percentage of total

change in absolute consumption 2018

Natural gas

2.992

59,6%

2.766

61,3%

-7,6%

Fuel oil

995

19,8%

847

18,8%

-14,9%

Diesel/petrol

78

1,6%

73

1,6%

-6,5%

Liquid gas

16

0,3%

23

0,5%

46,0%

Coal, coke & petcoke

935

18,6%

806

17,9%

-13,8%

Total energy consumption

5.017

100,0%

4.515

100,0%

-10,0%

             

 

NOx and SOx Emissions

Our programme to reduce emissions of nitrogen oxides (NOx) and sulphur oxides (SOx) is progressing well. We are targeting a 30% reduction by 2027 and have achieved this for pre-existing plants in China already, with our new Chizhou plant to follow in 2020. We will achieve the same in our US business by 2025, followed by Europe and South America.