On 26 Nov 2024, ACRS held an event to further the industry discussion on embodied carbon in steel production, supply and use. Experts shared their insights on the demand for sustainability credentials, how this information is used for design and procurement, and the roadmap for decreasing embodied carbon in construction.

Below is a brief summary of the topics covered, as well as access to the presentation documents.

If you were unable to attend this event, but would like to receive more information – please contact info@steelcertification.com.au

Steel can’t exist without carbon. But embodied carbon addresses the global warming and sustainability impacts of the steel supply chain, which is one of the biggest contributors to climate change and environmental issues. It is not ‘low carbon steel’, but low carbon emissions that are in focus.

Since NSW and Federal Governments have introduced mandatory decarbonising infrastructure project policies, and Ministers have agreed to include voluntary embodied carbon reporting in the National Construction Code (NCC) from 2025 for commercial buildings, understanding embodied carbon measurement is more crucial than ever.

Ministers have also requested the ABCB investigate and potentially fund the inclusion of a minimum standard for embodied carbon in the NCC from 2028, further supporting Australia’s transition to net zero.

A digital solution

In 2021, ACRS introduced its Sustainable Constructional Steel Certification Scheme, to enable consumers, industry & government to confidently source high quality constructional steels produced under high ESG standards and combat ESG confusion through the steel supply chain.

The Scheme ensures that construction steel entering Australia and New Zealand meets the UN guidelines on global environmental, social and ethical standards, using independent certification of ESG criteria and performance indicators. It provides a means for steel suppliers to declare product and organisational level sustainability performance and achieve credits in green building rating systems, recognised by numerous bodies around the world including BREEAM and the Green Building Council of Australia under the Green Star Responsible Products Program. ACRS/CARES can offer third-party verified EPDs using industry experts familiar with the steel manufacturing processes and requirements.

The Scheme has now been updated to offer a version tailored to fabricators and traders, to help accelerate industry-wide measurement and use of sustainable practices in the steel industry.

ACRS launched ACRS Cloud in 2023 with digital traceability for steel products, allowing for better transparency through the supply chain journey to confirm compliance – this traceability is also essential for sustainability measurements. ACRS Cloud now can provide traceability down to batch level with further roll outs and enhancements on the horizon.

[See more details in pp.1-5 of the presentation document]

The roadmap for tackling embodied carbon in the built environment

Jeremy Mansfield of Mansfield Advisory shared the preliminary findings for Australia’s policy roadmap to reduce upfront carbon in the built environment.

In 2019, embodied carbon accounted for 16% of all CO2 emissions in Australian Buildings – but by 2050 it will comprise 85% due to efficiencies and reductions in operations. Upfront carbon – the emissions from construction – accounts for 75% of a building’s total contribution, and addressing it is therefore a priority. The goal is a minimum 60% reduction of upfront embodied carbon in the built environment by 2035.

Australia is still working to catch up to other leading markets, but there is lots of progress happening from industry associations and stakeholders. ASBEC, in collaboration with many industry bodies, is creating a framework to do so, with the first Issues Paper released in June this year, and the goal of delivering a Comprehensive Policy Framework by the end of the year. The Project supports the adoption of NABERS’ Embodied Carbon tool released this month.

Tackling the embodied carbon in materials used (and their supply chain) is just one aspect of reducing embodied carbon – building design and material efficiency; fossil fuel-free transport and construction; and better planning and procurement will all contribute, as well as big picture changes - such as decisions to not demolish an existing asset and instead refurbish or repurpose, which would save not just a building's end-of-life emissions, but significantly reduce the need for carbon emissions being generated upfront.

[See more details in pp.6-28 of the presentation document]

Sustainable Constructional Steel Certification for processors

Dr. Leo Frawley explained how ACRS’ Sustainable Constructional Steel Certification Scheme works and has been adapted for the steel downstream value chain.

With Australia committing to reduce emissions 43% from 2005 levels by 2030 in the Paris agreement, and much of those emissions attributed to embodied carbon from building materials, the demand for low embodied carbon steel continues to grow. Sustainability will become a key factor in procurement decision making, alongside quality, price, and availability.

The ACRS SCS Scheme application process for steel processors/fabricators and traders is now as follows:

1. Applicant contacts ACRS to receive the Scheme Rules, guidance document, and self-assessment workbook.
2. Applicant completes the application document & self-assessment workbook
3. ACRS reviews and identifies gaps
4. ACRS performs an on-site verification audit, issues NCs
5. ACRS Audit Committee reviews documentation, issues certification and score card

[See more details in pp.19-34 of the presentation document]

A builder's perspective on ESG requirements

From John Holland, Patrick Campbell shared how building contractors view and manage sustainability as a key consideration of projects.In addition to John Holland’s internal commitment to sustainability, sustainability reporting by contractors is driven by

1. Asset Owners – with ESG reporting mandates, internal carbon reduction targets, and social procurement targets
2. Mandatory climate-related financial disclosure requirements
3. Third-party certification (Green Star, ISC, and NABERS Embodied Carbon tool)

Green Star Building certification pathways may include the following credits that relate to Steel sustainability: Responsible Products (Credit 5 & 6), Upfront Carbon (Credit 21), and Leadership. In addition to the role of steel in responsible product procurement, suppliers and fabricators can consider how their operations might relate to any of these other credits, such as Positive: Credit 26 Life Cycle Impacts via an EPD; People: Credit 33 Procurement and Workforce Inclusion via contribution to social impact and workplace inclusion when employing staff. With the launch of the NABERS Embodied Carbon tool, which includes a comprehensive database of product EPDs, there will be increased transparency over construction materials’ embodied carbon emissions intensity. Therefore, the verification of accurate material carbon emissions intensity via EPDs will become increasingly important.

Patrick noted in particular how fast the uptake of sustainability and embodied carbon awareness and literacy can occur. On one project, a client set an embodied carbon reduction target of 40%. By the end of the tender period, the tender team were rattling off embodied carbon numbers and terminology – key decisionmakers quickly understood what information to ask for regarding building materials, so that comparisons between steel suppliers / manufacturers included those metrics.

As a head contractor, John Holland calls on the industry to participate in shared responsibility – the only way that emissions reduction targets will be reached. Head Contractors need low carbon emissions materials – and this includes steel that is not just low emission at manufacturing, but also considers the overall emissions from manufacturing through to the construction gate.

[See more details in pp.35-47 of the presentation document]

Supplying processed steel with sustainable credentials

Julian Borgert explained that when it comes to emissions, most steel mills really want to make a difference – but the challenge is doing so a verifiable format.

In this regard, ACRS Cloud makes life so much easier. It allows people all along the supply chain to scan the tag on a bundle of steel, verify that it’s ACRS certified, and access all the data and EPDs.

That data transfer will be so important in the drive for sustainable steel and help with the circular economy. Julian shared his experience of getting ACRS Sustainable Constructional Steel certified as a steel processor and distributor

The push for ESG in construction will only continue – currently driven even more by private equity than by government, in Julian’s experience. The biggest hinderance to steel processors in addressing embodied carbon is the lack of uniformity of requirements from asset owners and steel procurers. ACRS SCS Scheme provides a level playing field for sustainability performance and measurement, but will only be end to end when all supply chain players get accredited.

[See more details in pp.48-57 of the presentation document]

Sustainable design and construction

As the speakers gathered to discuss the topic in a final panel, some key takeaways emerged. Ultimately there are multiple factors at play when procuring steel for built environment projects - embodied carbon just one, alongside price, mandates for higher local content, and others.

Above all, the industry in Australia needs to continue its active involvement with the international community to ensure like-for-like comparison is possible. Harmonisation will take a while, but there are already a lot of common features and standards between sustainability reporting.

Transparency and disclosure will be key, as steel suppliers can’t claim ESG credentials without third-party validation or certification. This puts an end greenwashing.

On the procurer side, using sustainable steel requires planning ahead, as it may entail a specialised run from supplier to get steel with low carbon emissions credentials.