Nippon's $15B bid for U.S. Steel could face climate group resistance
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Here's another wrinkle for Nippon Steel's nearly $15 billion bid for U.S. Steel: climate groups fear that the Japanese giant has inadequate plans to decarbonize.
Why it matters: The deal needs approval from U.S. regulators. And the steelworkers' union — another important Democratic political constituency — argues the plan requires its approval.
The big picture: Steel production fueled by coal is highly emissions-intensive, and finding carbon-cutting solutions at commercial scale is a major challenge.
- The group Industrious Labs calculated that U.S. Steel's active facilities produce around 19.5 million metric tons of CO2-equivalent annually, about the same as 5 coal-fired power plants.
State of play: Industrious, a group focused on industrial emissions, says Nippon should have a more aggressive timeline for deploying "green" steel technologies.
- They're not happy with Nippon's investor deck on the deal, which lays out a 2050 carbon neutrality goal via use of hydrogen, electric arc furnaces, CO2 capture and more.
The other side: The two steel giants are vowing strong steps to deploy emissions-cutting tech — and say they complement each other.
- The announcement notes both companies vow to fully decarbonize by 2050.
- "Our shared decarbonization focus is expected to enhance and accelerate our ability to provide customers with innovative steel solutions to meet sustainability goals," U.S. Steel CEO David Burritt said in a statement.
What they're saying: Hilary Lewis, steel director at Industrious Labs, said via email that "regulators and Congress alike need to be scrutinizing this deal" and ensuring Nippon is committed to investing in a "clean, modern" industry.
What we're watching: Potential pressure from the wider green movement.
- Yong Kwon, a Sierra Club industrial policy adviser, tells Axios via email that Nippon should "set more ambitious goals" on emissions and make use of climate law incentives for the U.S. holdings.
