The global steel industry is under increasing pressure from regulators, customers, and investors to demonstrate measurable progress toward decarbonization. Yet, despite the growing number of frameworks for reporting greenhouse gas (GHG) emissions, many producers struggle to deliver reliable data that accurately reflects their environmental impact.
A major obstacle is the inconsistency of the data being collected and shared. This often stems from a lack of well-defined, transparent processes for measuring and reporting emissions. Without standardized methods, comparisons across the industry—or even within a single company—can be misleading or incomplete.
A more effective approach involves adopting rigorous life cycle assessments (LCAs) and environmental product declarations (EPDs). These tools are underpinned by well-defined ISO standards, definitions and procedures. When used properly, they provide clear, standardized data on the environmental impact of producing materials such as steel, not only in terms of GHG emissions, but across a broader range of environmental factors throughout the product’s life cycle.
This level of analytical rigor is increasingly important for regulatory compliance. In some government-funded infrastructure projects, for example, there are strict limits on the global warming potential (GWP) or carbon footprint of incorporated materials such as steel and concrete. These limits are tied to sustainability certifications such as LEED, which require verified environmental data.
Additionally, producers are now facing pressure from their customers. Many downstream manufacturers are conducting LCAs and producing EPDs for their final products and they need accurate, transparent data from their suppliers to do so. Steel producers are being asked to disclose the GWP of their materials using standardized, third-party verified methods.
Scope matters: Emissions need context
GHG direct emissions at the facility are a critical metric in assessing environmental impact. However, in the steel industry, reporting direct emissions alone doesn’t provide a complete picture. To accurately assess a product’s carbon footprint, emissions must be categorized and analyzed across three distinct scopes:
Scope 1: Direct emissions from operations, such as fuel combustion in furnaces.
Scope 2: Indirect emissions from purchased energy like electricity or steam.
Scope 3: Indirect emissions across the value chain, both upstream (raw materials) and downstream (product use and disposal).
While Scopes 1 and 2 are widely reported, Scope 3 emissions, which can account for a significant part of a steel product’s carbon footprint, are often tracked inconsistently. For example, integrated producers who generate their own coke must report those emissions under Scope 1. Meanwhile, competitors purchasing coke externally can appear cleaner if they fail to report these emissions under Scope 3. This is where LCAs provide clarity. By considering all upstream and downstream impacts, LCAs prevent selective reporting and reveal the true environmental impact of steelmaking.
EPDs take the technical findings of LCAs and translate them into a standardized, comparable format. This allows for a structured, side-by-side analysis of different products, such as comparing a product from one facility to another. For steel companies, this kind of comparison is becoming more important because customers want proof that the materials they’re buying are truly sustainable. EPDs help them choose products with a smaller carbon footprint and hold suppliers accountable for their environmental claims.
Data quality: The critical success factor
The credibility of an LCA depends heavily on the quality and granularity of the input data. A black box approach that only identifies overall emissions or facility-wide averages lacks the transparency needed to identify specific areas for improvement. If, for example, you have a single meter feeding three furnaces, the average fuel consumption may seem acceptable. However, if you meter each furnace separately, you may find that two are highly efficient while the other is performing poorly. Granular, process-level data collection reveals such issues and enables targeted decarbonization strategies. Without it, companies risk producing LCAs that lack actionable insight. This emphasis on data quality is becoming increasingly critical as the regulatory and methodological landscape for LCAs and EPDs evolves.
Recently, two major changes were made to product category rules, which are the detailed guidelines that govern how LCAs are conducted for specific products:
- Renewable energy credits: Producers can now account for renewable power purchases, allowing them to reflect actual facility actions to identify and use low-carbon power options rather than requiring the use of regional grid averages in the Scope 2 calculations.
- Co-product allocation: By reclassifying certain outputs, such as blast furnace slag, from a “waste” to a “co-product,” emissions are now shared more equitably across industries. Cement producers, for example, must now account for some of the carbon footprint associated with the slag they purchase, rather than treating it as carbon-free.
Both changes create a fairer and more transparent framework while rewarding companies that have already taken steps to lower emissions. They also highlight the importance of keeping LCAs aligned with evolving standards and industry best practices.
As the steel industry moves toward a low-carbon future, the ability to produce high-quality, verifiable environmental data will become a competitive advantage, not just a compliance requirement. Producers who invest in reliable data collection, transparent reporting, and third-party verification will be better positioned to meet regulatory demands, support their customers’ sustainability goals, and differentiate themselves in a market that values environmental responsibility.
In this new landscape, steelmakers must shift from reactive reporting to proactive strategy, where data isn’t just a record of past performance, but a roadmap for innovation, accountability, and long-term value creation.
Turning insight into impact
In the steel industry, effectively collecting, interpreting, and utilizing data for LCAs and EPDs is as important as any other information monitored to ensure an efficient and economically sustainable business. The key is to ensure the data is measurable, representative, and reliable. Doing so requires a deep understanding of the specific processes involved in the industry—the type of extensive experience, expertise, and cross-sector capabilities that Hatch brings to the table.
We have worked with numerous steelmakers to help them better understand the sources and impacts of their current operations, how their operational decisions impact these emissions and what opportunities exist to reduce these impacts. Some examples include:
- Identifying lowest emission facilities, products, or processes within an organization from which product can be supplied to the most demanding customers.
- Finding low or no-cost solutions to make meaningful reductions to a facility’s environmental impact.
- Demonstrating the impact of procured materials on the overall life cycle footprint of a production process and empowering clients to drive change to their suppliers.
- Reevaluating LCA studies for clients whose previous assessments were conducted by practitioners who lacked steel industry expertise.
From mining raw materials to the final production of steel products, Hatch supports clients across the full value chain. Our approach is deeply collaborative, combining expertise in the steelmaking process with insights from our climate change specialists. We help producers prepare rigorous GHG accounting using LCAs and EPDs, implement advanced green steel technologies, and develop tailored decarbonization strategies. Our integrated approach enables clients to accelerate sustainability goals while maintaining operational excellence.
Key Point Summary:
- The steel industry faces increasing pressure to provide transparent, standardized greenhouse gas (GHG) emissions data.
- Life Cycle Assessments (LCAs) and Environmental Product Declarations (EPDs) offer rigorous, ISO-based frameworks for accurate environmental reporting.
- Emissions must be categorized across Scopes 1, 2, and 3 to reflect the full carbon footprint.
- High-quality, granular data is essential for credible LCAs and actionable decarbonization strategies.
- Recent updates to product category rules improve fairness and transparency in emissions reporting.
- Hatch supports steelmakers with deep industry expertise, helping them collect reliable data, reduce emissions, and meet sustainability goals.
