Climate change strategy

Among the specific goals we set ourselves in pursuit of this vision was a target to reduce our carbon dioxide (CO2) emissions to less than 1.7 tonnes per tonne of crude steel by 2012. We also reported last year on a longer-term target to reduce our CO2 emissions to less than 1.5 tonnes for every tonne of crude steel produced by 2020.

The targets were based upon an internal scope for reporting CO2 emissions. To provide international comparability, we have now moved towards a World Steel Association (worldsteel) scope for reporting, under which reported emissions appear to be somewhat higher than when using the internal scope.

As an indicator, the vision target of 1.7 tonnes per tonne of crude steel based on the internal reporting scope equates to 1.9 tonnes using the worldsteel approach. Similarly, the 1.5 tonnes per tonne crude steel target for 2020 equates to 1.7 tonnes per tonne.

The unprecedented global financial crisis that started in 2008 had a profound impact on the steel sector. Tata Steel responded swiftly and decisively, cutting European production by idling blast furnaces to align production with demand. While production rates recovered to some extent towards the end of the reporting period, the year was still characterised by reduced output and this had an impact on our CO2 intensity, particularly in Europe. With increasing numbers of shutdowns and startups, a greater amount of energy is consumed (and more CO2 emitted) per tonne of liquid steel produced.

Another action we took to weather the economic storm was to reduce our capital expenditure programme by re‑phasing and deferring some of our initiatives. This prudent and necessary action has meant that some of our planned investments in CO2 reduction have had to be deferred, but we remain committed to making these improvements as soon as economic conditions allow.

Taking both the introduction of the worldsteel reporting scope and the profound impact of the economic downturn into account, we have accepted that our 2012 vision target is no longer attainable. For this reason, we are currently carrying out a root and branch review of our emission reduction targets, involving extremely detailed assessments of the reduction potential at all our steelmaking facilities. Based on this, we plan to review our targets during 2011.

Despite these constraints, we continued throughout the year to invest substantial effort and resources in relation to the five strategic priorities that underpin our vision with regard to climate change. These priorities remain:

To continue to achieve emission reductions

• To invest in longer-term breakthrough technologies for producing low-carbon steels
• To develop new products and services that generate lower CO2 emissions through the life cycle
• To actively engage our entire workforce in this challenge, and
• To lead by example within the global steel industry.