The steel and metal industry needs to decarbonize. Almost every company has therefore now set its own climate targets in order to reduce its CO₂-emissions. However, there is still no standardized definition for green steel. The main problem here is how the necessary carbon footprint of a product can be recorded, documentedand made transparent in a reliable and trustworthy manner. As always, the standardization mills grind very slowly. Meanwhile, some suppliers are forging ahead with their own certification solutions and are already creating the first de facto standards.
For the materials processing industries, it is mostly Scope 3 emissions that are responsible for up to two thirds of the total emissions of the companies. This means that in order to reduce their product carbon footprint (PCF), companies will have to rely increasingly on climate-friendly raw materials in the future, especially when procuring materials, but how can this be verified?
The Digital Material Passport (DMP) from Viennese software developer S1SEVEN GmbH brings transparency to material composition. It is the digital image of the material and is created specifically for each production batch. The DMP contains a wide range of data such as the origin of the material, the manufacturing process, the physical and chemical properties and the impact on the environment. It can also contain safety aspects relating to health, processing instructions or official approvals.
The DMP therefore provides the processing industry with a valid means of verification when making material procurement decisions. If raw material and primary product suppliers or subcontractors use the DMP to document their product carbon footprint, the downstream companies in the value chain can also use this data to calculate their PCF, but above all they can also use the data to optimize their supply chain in terms of CO₂emissions. In this way, a reduced emissions value also becomes a competitive differentiator.
DMP: the concept
The purpose of the Digital Material Passport is to replace traditional paper or PDF-based material test certificates. The new digital system with an open data format is based on the European standard EN10168 for test certificates. However, it can be expanded at any time to meet the growing requirements of the industry and thus offers a standardized data format for all users, whether steel companies, software developers or authorities. This open source strategy simplifies the inspection certificate process thanks to its standardized data processing.
The system should be easy to integrate into the existing IT systems of manufacturers and customers, who could also become manufacturers in a second step. For example, a steel customer receives an email with the test certificate data in PDF format and as a machine-readable JSON data set. This means that further processing can take place directly and, most importantly: errors when manually typing and transferring the data are a thing of the past.
The DMP comprehensively lists the composition of the material from the raw material to the finished part or end product ¬- but also thinks beyond this. It aims to systematically document the sustainable use of materials over their entire life cycle and also to promote the concept of sustainability itself by making DMP data available at the click of a mouse at any time. From use and reuse to recycling and reclaimed materials: the Digital Material Passport is intended to keep material data transparent and verifiable not only along the value chain, but also across circular "cradle to cradle" material cycles. This is particularly important, for example, when categorizing scrap or metal waste according to their PCF.
The DMP in practical use at Stahlo Stahlservice
Stahlo is a mill-independent steel service center that supplies materials for the thin sheet market. At the beginning of 2023, the classic test certificate was converted to DMP. As a result, every Stahlo customer now receives comprehensive information on the purchased material as a PDF and JSON document.
This gives the companies supplied by Stahlo the opportunity to better document and optimize their Scope 3 emissions and ultimately prove the PCF of their product.
With the STAHLKOMPASS, Stahlo also offers an analysis of the ecological footprint and draws up a route that meets the companies' sustainability goals: "The customers determine the target tension and we ‘green‘ the flat steel portfolio by specifically introducing the right amount of optimized products," explains Stahlo CEO Oliver Sonst.
Emissions management with AI
Another approach to help companies, especially large SMEs and major corporations, achieve their climate targets is the AI-supported approach of the Boston Consulting Group (BCG). According to BCG, the end-to-end software solution called "CO₂AI" ("CO₂ Artificial Intelligence") individually tracks the product carbon footprint of each product as a complete balance sheet "from cradle to customer entry gate", from raw material extraction and production to processing, storage and delivery to the customer. This is made possible by the world's largest emissions database, to which CO₂AI has exclusive access. On this data mining basis, the software solution documents the entire value chain, in particular of upstream raw materials such as nickel in the production of stainless steel, where the greatest CO₂ emissions are generated by the alloying elements. Depending on the material composition or steel recipe, CO₂AI calculates the proportionate emissions of all steps and creates an overall PCF balance sheet on this basis, which is traceable down to the last detail. It is precisely this meticulous proof of emissions that could be worth hard cash for steel producers in the future with regard to their customers' demand for green steel.
However, there is still a great deal of uncertainty in the market when it comes to green steel due to the lack of a precise and uniform definition. However, recent opinion polls clearly show a growing interest and willingness to pay for steel products with a proven lower CO₂ value, so-called Green Premium products. A freely accessible, transparent and trustworthy PCF would be the tool of choice and at the same time an increasingly important purchasing criterion, because it would classify green (premium) products as particularly sustainable. And it would also strengthen customer trust in the brand in question and give it a new positive charge.
Practical example Klöckner and Co.
The benefits of sophisticated CO₂ management with the help of AI are already visible at metal distributor Klöckner und Co. In January 2023, Europe's largest steel trader implemented the AI solution Nexigen PCF Algorithm in collaboration with the Boston Consulting Group. As a result, every customer now receives a Product Carbon Footprint Declaration at the time of purchase, in which every kilogram of emissions is specified and traceable based on the delivery number - "cradle to gate" thus becomes a concrete reality and, thanks to the underlying blockchain technology, the Product Carbon Footprint Declaration is also highly tamper-proof and unalterable for almost all 200,000 products in the company's portfolio at the same time. Another plus: the software suggests green alternatives to Klöckner customers and shows the reduction potential. In this way, Klöckner und Co. supports its customers in establishing a sustainably optimized value chain. On the other hand, it also decisively promotes competition for the lowest PCF value.