President Joe Biden cited national security concerns on Friday as he blocked the proposed takeover of U.S. Steel, but Biden's move to scuttle Nippon Steel's $14.9 billion deal also carries enormous implications for climate change and clean air.
The global steel industry is a major source of greenhouse gas emissions, producing more CO2 than many major countries, and some U.S. Steel mills are among the biggest sources of toxic air pollution in their states.
As some steelmakers are beginning to embrace cleaner technology, climate and clean air advocates say Nippon's plan would have slowed the transition to greener steel by extending the life of dirty, old coal-burning furnaces.
"Whoever owns and operates U.S. Steel facilities must invest in clean, modern iron and steel production that protects public health and good union jobs," Hilary Lewis, steel director at Industrious Labs, told Newsweek via email.
Industrious Labs is a research and advocacy group working to clean up heavy industry such as steel, aluminum and cement. By analyzing industry data, the group found that U.S. Steel's blast furnaces and coke ovens—the source of coal-based fuel—belched 14 million tons of greenhouse gases a year.
"Nippon had planned to continue this health-harming, and climate-harming pollution," Lewis said.
Nippon's proposed deal with U.S. Steel included investments for upkeep of the coal-fired furnaces, a move that Lewis argued would lock in coal consumption and pollution for more than a decade. Her group and others in clean tech instead want the steel industry to invest in emerging cleaner alternatives.
"Clean steelmaking is the future, and making these investments now is a critical step to ensuring our global competitiveness for generations to come," Lewis said.
The Industrious Labs report also found that annual toxic air pollution from those steel and coke coal facilities contributed to an estimated 200 premature deaths and 55,000 asthma attacks.
The U.S. has seven coal-based steel mills in Indiana, Michigan, Ohio and Pennsylvania.
Susan Thomas lives near some of the U.S. Steel facilities in northern Indiana where she works with the community group Just Transition Northwest Indiana.
U.S. Steel Gary Works is a major polluter in the state, and residents often complain of soot and a "rotten egg" smell. Federal and state data shows that Gary Works is Indiana's biggest emitter of carbon monoxide and the state's fourth-largest source of fine particulate matter pollution, both linked to illnesses such as lung and cardiovascular disease.
"The ultimate owner of U.S. Steel must implement technologies that future-proof steel industry jobs, community health, and the environment," Thomas said in a statement emailed to Newsweek on behalf of the group.
Nippon Steel and U.S. Steel issued a joint statement that the companies are "deeply disappointed" with Biden's decision and intend to fight it. However, the companies will still face political headwinds, as incoming President Donald Trump also opposed the Nippon deal.
Climate advocates expressed hope that the end of the Nippon takeover could increase the chances for another company to buy U.S. Steel and convert its facilities to cleaner technology.
"Nippon Steel was offering a bad deal for the climate," Roger Smith, Asia lead with the group SteelWatch, told Newsweek via email.
The International Energy Agency estimates that the energy-intensive production of iron and steel accounts for about 25 percent of global industrial emissions of CO2, and steel makes up roughly 7 percent of all of humanity's greenhouse gas emissions by some estimates.
As the surge in renewable energy begins to reduce the emissions from our supply of electricity, attention is turning to the heavy industry sectors such as steel that are harder to decarbonize.
Last March, the U.S. Department of Energy announced a $575 million award to help the Cleveland-Cliffs Middletown Works steel plant in Ohio install cleaner electric furnaces.
In 2023, Cleveland-Cliffs made an offer to purchase U.S. Steel, and the demise of the Nippon takeover could revive interest. (A Cleveland-Cliffs spokesperson had not responded to a request for comment by the time of this story's publication.)
Elsewhere in the world, some steel companies are exploring the addition of carbon capture and storage technology to stop CO2 emissions before they escape and either store the CO2 underground or convert it into other useful products.
An ambitious startup company in Sweden, Stegra—formerly called H2 Green Steel—plans to use hydrogen in place of coke to draw oxygen out of iron ore, a critical part of the steelmaking process. Carbon-free electricity from hydropower will both power the mill and produce its green hydrogen.
Nippon has its own plan for decarbonizing steel operations by midcentury, but watchdog groups such as SteelWatch have criticized the company's approach as too slow and insufficient to meet global targets for emissions reductions.
Smith of SteelWatch said the apparent end of the U.S. Steel deal could cause Nippon—the world's fourth-largest steelmaker—to rethink its approach.
"The opportunities for green iron and green steelmaking are vast for a global company," he said, "if it's ready to embrace the future."
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