USTR asks for Metals Greenhouse Report

Last week saw a request by the United States Trade Representative (USTR) Katherine Tai to the United States International Trade Commission (USITC) to investigate and report on the greenhouse gas emissions intensity of steel and aluminum produced in the United States.

The information obtained from this investigation will guide discussions with the European Union (EU) regarding the Global Arrangement on Sustainable Steel and Aluminum, a plan aimed at discouraging trade in emissions-intensive products and reducing non-market excess capacity from other countries.

The report that Tai has requested should cover the average and top percentiles of GHG emissions intensity for these metals produced in the U.S. during 2022. The emissions will be classified into three scopes:

1. Scope 1 GHG emissions are direct emissions from the facility's owned or controlled sources, such as fuel combustion emissions, process emissions, and emissions from the facility’s own electricity generation.

2. Scope 2 GHG emissions refer to indirect emissions from the generation of the facility’s purchased energy, which could include electricity, steam, heat, or cooling.

3. Scope 3 GHG emissions are indirect emissions not included in Scope 2 that occur in the value chain of the reporting company. For this study, only a specific subset of upstream Scope 3 GHG emissions will be analyzed, particularly those associated with material and resource inputs for the production of steel and aluminum.

The report is expected to be delivered no later than January 28, 2025.

This request signifies a serious commitment to environmental sustainability from the United States and the EU, who are taking joint action to address issues of overcapacity and climate change.

The data obtained will also help these economies to negotiate the Global Arrangement, inviting other like-minded economies to participate and contribute towards the goal of reducing trade in emissions-intensive steel and aluminum products. The conclusion of the negotiations on the Global Arrangement is planned for October 2023.

"Emissions-intensive products"  and "reducing non-market excess capacity"  often refers to smelters and processors in Brazil, Russia, China and India.  Primary steelmaking from ore generates more greenhouse gas per ton than that of the the scrap recyclers in the west.

[USTR Request]