Alejandro de Keijser Torres, Chair of ICC Mexico Energy Commission & Sustainability Director of DeAcero Group
Magdalena García Flores, Head of ESG in the sustainability team of DeAcero Group
Paulina Terrazas Valdés, Outreach and Advocacy Manager, Deacero Group 


Establishing clear and measurable sustainability criteria for the procurement of steel and other materials with significant embodied carbon is crucial to address the challenge of aligning sustainability commitments with procurement decisions”

To address sustainability challenges, it is crucial for the public and financial sectors to align their commitments with specific procurement decisions. This becomes even more relevant as countries update their Nationally Determined Contributions (NDCs) for 2025. However, these decisions often lack rigorous environmental criteria. Despite annual COP meetings and commitments to improved financing, many procurement and investment processes do not critically consider the carbon intensity of products and services.

Steel, with its essential role in infrastructure and daily life, exemplifies this gap. The steel industry is responsible for over 8% of global CO2 emissions, producing more than 1,700 million tons of crude steel annually. The efforts from this sector are pivotal for decarbonization, especially since around 52% of steel is linked to buildings and infrastructure.

Steel can be produced through two main methods, each with very different environmental implications. While the traditional Blast Furnace or Basic Oxygen Furnace (BF-BOF) method generates nearly 2 tons of CO2 per ton of crude steel, the Electric Arc Furnace (EAF) method emits from 0.4 to 1.2 tons (depending on the percentage of recycled materials). Despite these differences, how often do public procurement efforts inquire about the production process of the steel used in infrastructure projects? And how many sustainability-linked bonds include requirements for low-emission products?

The United Kingdom has made notable progress towards sustainable procurement. Its Sustainable Procurement Toolkit for Local Governments is a good example of how limited resources can be allocated more effectively through ethical procurement, incorporating social and environmental considerations like climate change, circular economy, and well-being. The case for recycled materials is also compelling: “The focus is on whether the embodied carbon can be reduced throughout the lifecycle or if a product with a lower embodied carbon value can fulfill the required function. This involves reducing the use of virgin raw materials, minimizing waste, and maximizing the useful life and value of products, supporting the transition to a circular economy.”

Similarly, the Steel Procurement in Major Projects guidelines, established by the UK Government, outline key outcomes and actions for contracting authorities to consider when steel is a critical component, including “Ensuring that the steel is being produced in a responsible and sustainable way.” However, the multiple definitions of what constitutes sustainable or responsible steel often make it challenging to apply this principle in practice.

Establishing clear and measurable sustainability criteria for the procurement of steel and other materials with significant embodied carbon is crucial to address the challenge of aligning sustainability commitments with procurement decisions. One approach is to define specific characteristics that help guide these decisions:

  • CO2 intensity: A target of less than 0.48 tons of CO2 per ton of crude steel, effectively prioritizing lower-emission production methods like the Electric Arc Furnace (EAF) over traditional Blast Furnace or Basic Oxygen Furnace (BF-BOF) routes.
  • Recycled content: A minimum threshold of 80% recycled scrap in steel production, which would support the transition to a circular economy by reducing the use of virgin raw materials.
  • Clean energy usage: A requirement for a significant percentage of clean energy in the production process, ensuring that the environmental impact is minimized at each stage of manufacturing.
  • Public climate commitments: Participation in initiatives like the Science Based Targets initiative (SBTi) the Global Steel Climate Council (GSCC) standard or similar frameworks, signaling a commitment to long-term decarbonization goals.
  • Performance in sustainability ratings: Positive evaluations in recognized sustainability ratings, which provide third-party validation of a company’s environmental and social performance.

Defining and implementing such criteria can ensure that public and financial sectors make procurement decisions that align with their sustainability commitments. By emphasizing low-emission products, such as steel produced through the EAF route or using a high percentage of recycled materials, these sectors can foster a more sustainable and resilient global value chain.

As there is not enough low carbon steel in the world to meet the global demand, we should promote consumption of low carbon steel that is currently available first. We should take advantage of the overcapacity of steel smelters for the planet’s sake.  This could be achieved by implementing emissions information disclosures and eventually purchasing requirements throughout the type of steel that meets the above or similar conditions.

This approach not only supports the broader objectives of climate action but also accelerates the transition to a circular economy, creating a foundation for more sustainable economic growth.