Brazil-based Vale and Chinese steel producer Jiangsu Shagang have signed an MoU to jointly work on decarbonizing steel production, Vale said in a statement.
The two companies will develop economic feasibility studies for two projects: using products such as high-grade iron ore products which generate lower emissions; and cooperating on plants at Vale subsidiary Tecnored, based in Brazil.
Jiangsu Shagang has five production sites in Jiangsu, Liaoning, and Henan Provinces, producing a wide range of steel products used in infrastructure, manufacturing, and high-end equipment.
Vale has committed to reducing 15% of net Scope 3 emissions by 2035, and would like to decrease its absolute Scope 1 and Scope 2 emissions by one-third by 2030. Scope 3 emissions accounted for 97.9% of Vale's emissions in 2020, the company said. It aims to achieve carbon neutrality by 2050, a goal outlined in the Paris Agreement.
Steel production worldwide accounts for between 7% and 9% of total global emissions, according to the World Steel Association.
Vale produced 300.4 million tonnes of steel in 2020, while Jiangsu Shagang produced 42 Mt last year.