Sustainable Development and Climate Change

02 Oct 2008

Good morning ladies and gentlemen.

First allow me to congratulate Association of British Scholars for hosting this debating event.  They couldn't have chosen a better location but Jamshedpur to debate on "Sustainable Development and Climate Change", some thing that touches the lives of each and every one of us.  Secondly I feel honoured to be invited here and be amongst an august gathering of scholars, academia, students and people of Jamshedpur.

As we gather today in Jamshedpur, I would like to reflect on the legacy of Jamsetji Tata; a legacy that’s felt far beyond the city that owes such a lot to his vision.

On his deathbed, this visionary man made an important request of his son as he handed over the business. He said “If you cannot make it greater, at least preserve it. Do not let things slide. Go on doing my work and increasing it, but if you cannot, do not lose what we have already done.”

As in many things, he was ahead of his time, and all of us in the Tata Steel Group feel a strong sense of duty to honour this legacy. One way that we can demonstrate this is by remaining true to his ideals of corporate citizenship, a term that is only now in vogue, but one he would have recognised.

But what does corporate citizenship mean to us? Well, in its broadest sense, it means being responsible and sensitive to our employees, the countries, communities and environment in which we work. Businesses that demonstrate a high level of corporate citizenship make an important contribution to the goals of sustainable development, another term that would have been recognised by Jamsetji Tata and the one that you have been debating. If I add my contribution to the debate, I would define sustainable development as the process whereby society enjoys a high standard of living and where business flourishes but in a way that does not jeopardise the ability of future generations to enjoy the same standard of living. To that, I would add the point that these opportunities should be available to everyone, not just those in the industrialised world.

Tata Steel Group makes an enormous contribution to sustainable development, through the people it employs, through positive interaction with its neighbouring communities and through the inherent social and environmental advantages of the products it supplies.

Because my time is short and you have already spent a long time discussing the subject in general terms, I will illustrate this by focusing on climate change, which is probably the biggest challenge we are currently facing.

Before I describe our climate change vision and strategy, I’d like to deal with a few key questions that you have already debated. In particular: Is the climate changing? If so, is this to do with man’s activities and is it too late to do anything about it?

The Intergovernmental Panel on Climate Change, or IPCC, chaired by the famous Indian scientist Rajendra K. Pachauri produced a report last year that summarised its most recent assessment of the scientific facts surrounding climate change. The report is probably the most authoritative text on this subject and is being widely used by policy makers across the globe.

On the question of whether climate is changing, the report concludes, “Warming of the climate system is unequivocal”.

It goes on to say that: “Global atmospheric concentrations of carbon dioxide, methane and nitrous oxide have increased markedly as a result of human activities since 1750 and now far exceed pre-industrial values”.

It also says “Most of the observed increase in global temperatures since the mid-20^th century is very likely due to observed increases in man-made greenhouse gas concentrations.”

And, finally, on the question of whether it is too late to do anything to address the changing climate, the report concludes that many impacts can be reduced, delayed or avoided by mitigation, but that action is required over the next two or three decades. That is well within my lifetime and yours.  Society is demanding action.  We must respond.

Next, you may ask why, is the global steel industry so interested in climate change? This is easy to answer. We are seen as being part of the problem.  Globally, the industry emits approximately 2 billion tonnes of carbon dioxide each year. To put this figure into context, this is the same as the combined annual emissions from both India and the United Kingdom, and accounts for about four percent of global man made emissions.

So, you can see that climate change is a real issue and, potentially, it is a threat for our industry and our company. But, it is also an opportunity and where we can genuinely be part of the solution.

It is a threat because our emissions are high, and significant in a global context. But it is an opportunity because each time we provide the high strength steels that enable automotive manufacturers to make lighter and more fuel-efficient vehicles, and every time we provide the steels and design solutions to make energy efficient buildings, we become part of the solution to the global challenge.

So what are we going to do? Well, we have a plan:

In this cricket loving country, you will excuse me for making a small reference to the beloved national sport of both the UK and India. During last year and the early part of this, the Indian cricketing authorities were busy formulating their radical plans for a sport that was in need of a change. Crowds and revenues were falling globally and fewer people were taking up the sport in historic cricketing nations such as the West Indies. The situation was not sustainable and out of these circumstances the Indian Premier League was born. As we have seen, through the 20:20 version of the game, the sport of cricket has been revived. At the same time that these great changes were taking place in the world of cricket, we in Tata Steel Group were developing our own distinctive 20:20 vision. This is the name we have given to our plan to reduce our own carbon dioxide emissions by at least 20% by the year 2020. One important part of our overall climate change strategy.

We are not starting from a position of complete inaction: far from it. As an industry, we can be extremely proud of our track record. We have made impressive improvements over the course of the last forty years. During this period we have halved the energy needed to make each tonne of steel. But we accept that more can be done and that more needs to be done, and it is with this in mind that we at Tata Steel Group have developed a vision and a strategy related to climate change.

Our strategy for achieving our vision has five main elements:

1. Reducing our emissions through improving our current processes
2. Investing in longer-term breakthrough technologies that may yield a step change in emissions per tonne of steel
3. Developing new products and services which can be part of the solution to climate change
4. Engaging all of our employees so that everyone is encouraged to make a contribution
5. Leading by example within the global steel sector.

I would like to address some of these in a little more detail.

Overall, our steelmaking processes emit some 1.8 tonnes of CO2 per tonne of steel and we have set our target to reduce that number by 20% by 2020, compared to 1990.This equates to a target of less than one and a half tonnes of carbon dioxide per tonne of steel. We have also established an interim target of one point seven tonnes of carbon dioxide per tonne of liquid steel, to be achieved by 2012.

You may ask “are we in line with the targets?” Well, these are extremely challenging targets and there is still a gap. However, in the next three years we will invest 150 million pounds [approximately Rupees 1200 Crores] to help us to achieve the targets. This includes a scheme at one of our plants in the United Kingdom, at Port Talbot, where we are investing 60 million pounds (approximately Rupees 480 Crores) to capture gases from one part of the plant to be burned elsewhere on the site.

At our IJmuiden site in the Netherlands, we’ve recently launched the ‘Ym Green’ campaign, which calls for every employee to reduce his or her own carbon emissions. Similar initiatives are going on across the company and, through this coordinated approach, I’m confident that we will achieve our emissions reductions targets.

To make a change to the amount of carbon used, we must change the process. This lies behind our commitment to invest in research into breakthrough technologies.

The incremental improvements achieved through continuous process refinement and intelligent investment, are never likely to yield emissions reductions, per tonne of steel, greater than one to two percent per annum. We need breakthrough technologies. 

That’s why 48 organisations across Europe, including Corus, are partners in a major 59 million euros (approximately Rupees 370 Crores) research and development project known as ULCOS – which stands for Ultra Low CO₂ Steelmaking.

This project, which is now part-way through its first phase, aims to develop new technologies that will lead to a 50% reduction in emissions per tonne compared to today’s best production routes. It is moving towards a second phase in which we hope to take the four best technologies identified into a large-scale demonstration project. This will prove whether the new routes really work both technically and economically.

However, even if it is successful, ULCOS will not lead to widespread deployment of new technology until after 2020 at the earliest. In the meantime, Tata Steel Group is leading efforts to secure cooperation amongst the international steel community to work towards harmonised reporting protocols and improved best practice sharing.

Last but certainly not least; I would like to cover the part of our climate change strategy that relates to our products. We recognised some time ago that our products have a more profound role to play in addressing climate change than do our processes. We firmly believe that our products can contribute to global emissions reductions throughout their life-cycle that effectively offset the total emissions from their production. There are scores of examples of how this can happen and I will illustrate just a few.

Steel has long been recognised for the vital contribution it makes to modern society. Without it there would be no cars, large-span bridges and railway infrastructure to link communities, no power stations, oil and gas pipelines and electrical transmission infrastructure to provide us with heat and light and no operating theatres to treat the sick. Indeed, it is often said that if something isn’t made from steel, it is made using steel!

The unique contribution that steel makes to society doesn’t stop there: it will be a vital ingredient in the global response to climate change. It is the most recycled material in the world (after water!); it has a high strength to weight ratio; it is durable and adaptable.

By making better, cleaner and stronger steels, we can make cars that use less fuel, which last longer, and which are safer than those of only 10 years ago. The use of our Advanced High Strength Steels is enabling car-makers to produce vehicles that are typically 50 to 100 kilogrammes lighter than they would be with more conventional steels. We estimate that this light-weighting could equate to one tonne of carbon dioxide over the life of each car. With over ten million cars being registered in India alone last year and the rate of increase in car ownership predicted to rise, you can easily see how light-weighting of vehicles can have a quite profound impact on global emissions.

We are improving the energy efficiency of buildings with a target of developing products that will make the ‘zero carbon’ building become a reality. As you may know, steel buildings can more easily be adapted to new uses throughout their lives as well as being fully recyclable when they are no longer wanted.

For example, Corus’ specialist roofing business, Kalzip, has developed a product called AluPlusSolar, an integrated roofing sheet with a flexible thin film laminate containing a highly efficient solar energy technology. AluPlusSolar projects currently contribute 1,500 megawatt hours of electricity to Europe’s energy needs and this figure is growing rapidly.

Our high quality electrical steels will also play an essential supporting role in delivering the energy mix of the future. The advantage of electrical steels is that their application reduces carbon dioxide emissions by reducing energy losses in electricity transmission systems, transformers and motors.

These are but a few examples of where our products will play a key role in reducing global carbon dioxide emissions, but they illustrate clearly why our strategy goes way beyond the boundaries of our manufacturing facilities.

I’d now like to wrap up.

To summarise, we at Tata Steel Group care passionately about the world we live in – and we are committed to protecting both our business and the planet. Our Vision is to be good corporate citizens, and reducing global carbon emissions through our processes and products clearly contributes to this.

We still have time to make a difference – and we have a moral duty to do so. It is too late to be pessimistic.

I am personally very committed. I am very committed because respecting the environment is integral to the vision of Tata Steel Group. I am personally committed on behalf of the industry both at a European and at a worldwide level. We have ambitious objectives and I know we can achieve them. As a result, we can create a brighter future for ourselves, for our children, and for future generations.

In short, we will remain true to the ideals bestowed upon this company by its founding father.