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Severstal publishes its position on climate change

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PAO Severstal is a vertically integrated mining and metallurgical company with major assets in Russia.

Severstal's position on climate change

Committed to sustainable development Russian economy and climate change policy, the Company has set a target to reduce the carbon intensity of liquid steel by 3% by 2023 compared to the base year 2020. The total reduction in greenhouse gas emissions will amount to about 1 million tons of CO2-eq.

Welcoming the strategic goal of the state climate policy , we believe that measures of state support for research of low-carbon technologies for the steel industry should become an important component of climate policy and stimulating climate projects, including creating a regulatory environment (changing tax legislation, creating a national system of climate projects) and infrastructure (developing hydrogen energy, availability of long-term investments, subsidizing innovation, stimulating the development of the scrap metal market, etc.).

By contributing to global efforts to achieve the goals of the Paris Agreement, we are fulfilling the commitments already stated and taking on additional ones. We believe that targets for reducing GHG emissions should be consistent with the goals of the Paris Agreement, taking into account the nationally determined contributions (NDC). We believe that the rate of reduction in greenhouse gas emissions can vary significantly due to the geographical location of production facilities and differing opportunities, including access to disruptive technologies and the presence of low-carbon infrastructure. For the production of "primary" steel, a separate goal must be set, which is dictated by the specifics of the technological process and the lack of alternatives (not all steel grades can be produced from scrap metal).

Contributing to aligning financial flows with a low-carbon development strategy , the Company invests in renewable energy by participating in an international pilot project for the production of equipment for wind power plants in Russia. Severstal participates in a joint venture with Widar Reovables and Rusnano - BPC Bashny LLC, launched on December 12, 2018. The design production capacity of the enterprise is up to 300 MW per year. In addition, when considering investment projects, the Company takes into account the CO2 factor when making a decision.

Being a responsible company, we consider it necessary to assess the emissions of vaporized gases at all stages of raw materials extraction and production of products. We believe that carbon footprint and carbon intensity should be calculated using the same methodology approved by industry associations.

Understanding the importance of assessing the Company's contribution to global greenhouse gas emissions, we have calculated the greenhouse gas emissions of regions coverage 1, 2 and 3 and adhere to the opinion of mandatory verification of information on GHG emissions, which will allow us to objectively assess the contribution of companies in particular and the industry in general to greenhouse gas emissions.

Considering the need to adapt the Company's assets to the adverse effects of climate change , we recognize the physical risks for assets associated with climate change, and on a regular basis we monitor the condition of buildings and structures and the condition of permafrost on the territory of enterprises located in the Arctic zone.

Being open for cooperation in order to find optimal approaches to decarbonization of ferrous metallurgy, we are ready to consider cooperation for the purposes of reduction of greenhouse gas emissions within the framework of any legitimate mechanisms to reduce greenhouse gas emissions. At the same time, the Company supports the need to establish as soon as possible rules for the implementation of Article 6 of the Paris Agreement, including the requirements for bilateral (or multilateral) projects (clause 6.4).

Recognizing that due to the peculiarity of traditional technologies, black metallurgy is one of the industries for which it is difficult to reduce greenhouse gas emissions, we are considering offset measures that promote the absorption of greenhouse gases, including carbon capture and storage technologies, certificates of origin of electricity and the potential of projects in the sector “land use, land use change and forestry "(LULUCF).

Demonstrating its seriousness, the Company supports climate initiatives and takes an active part in the work of expert platforms : Net Zero Steel Iitiative Climate Actio100 + (an investor initiative to get the world's largest greenhouse gas emitters to take action to tackle climate change mata), The Net-zero Steel Pathway Methodology Project, Step up WSA (Best Available Techniques).

Taking into account the logic of the Paris Agreement, the Company strives to pay attention to all aspects of the struggle

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