Rising Carbon-Emissions Costs Lead Cleveland-Cliffs to Change Fuels

September 30, 2020October 3rd, 2020
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Reducing coal inputs into blast furnaces can reduce carbon emissions

“[The acquired ArcelorMittal] furnaces typically use iron ore pellets and coking coal, [but Cleveland-Cliffs] will substitute hot-briquetted iron for some of the pellets, allowing them to use less coal... .”

Bloomberg, 9/28/2020

Article Summary

  • Cleveland-Cliffs announced on September 28 it would acquire ArcelorMittal’s U.S. assets
  • The acquired blast furnaces could use more hot-briquetted iron instead of coking coal and save on emissions
  • Cliffs’ CEO, who made the fuels announcement, did not disclose or estimate the emissions or costs savings


Without the hard and soft benefits of moving away from coal and carbon-emitting fuels in general, costs of producing steel would likely be lower. Coking coal’s abundance makes it the most profitable fuel if externalities are not included. Increased costs usually translate to higher commodity costs if the burden is on the producer, rather than the consumer. Expect more of these moves as steel producers look to comply with regulations and seek the lowest costs net of emissions penalties.

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