Mitigation of risks in low-carbon transition and seizing the corresponding opportunities

Note I：Each scenario considers the maximum rise of temperature with 50% confidence level at the end of the 21st century.

Transition risks Scenarios Scenario Analysis Impact on CSC's operations CSC's Response Metrics and Targets
Transition of raw materials Temperature rises 1.7℃ (IEA APS)
  • In the low carbon emission scenario, scraps and reduced iron may become critical sources of raw materials. Furthermore, the demand of high-quality iron ore is expected to increase, causing the prices of raw materials to fluctuate.
  • The increase of demand from the industry would stimulate the prices of emerging new raw materials, leading to the rise of operating costs.
  • Examine various alternative low-carbon iron sources and include them in the scope of assessment.
  • Deploy and develop low-carbon iron sources.
 Carbon emission targets of CSC:
  • Reduce carbon emissions by 7% in 2025
  • Reduce carbon emissions by 25% in 2030
  • Achieve carbon neutral in 2050
*The baseline year is 2018*
Implementation of carbon fee mechanism
  • CSC evaluates the impact of Carbon fees based on not only Fee-charging Rates of Carbon Fees by Taiwan's Ministry of Environment, but also international cases of carbon tax and carbon emission trading.
  • Products need to bear the cost of carbon emissions, resulting in the increase of operating costs.
  • Plan and propose Self-determined Reduction Plans to seek suitable designated reduction rates. (For more detail)
  • Advance the development of emerging steelmaking technologies to reduce CSC's carbon emissions and the carbon cost of its products.
Planning of low-carbon energy policy Temperature rises 1.4℃ (IEA NZE, in line with the Paris Agreement) 2025
  • In the low-carbon emission scenario, the demand for renewable energy may continue to grow in response to the long-term development of net-zero technologies in the steel industry.
  • If CSC continued to reduce purchased electricity through low-carbon energy, operational costs would increase.
  • Installed solar power system in plants to meet the short-term and mid-term demand for renewable energy.
  • Jointly establish an energy trading platform with major domestic companies to ensure renewable electricity sources and control costs.
  • Continue to review long-term carbon reduction strategies for low-carbon energy demand.
R&D of carbon neutral technology of the steel industry
  • In the low-carbon emission scenario, the steel industry may continue to invest in the research and application of low-carbon steelmaking technologies.
  • Investment in the R&D of new steelmaking technologies would lead to the increase of R&D cost.
  • Continue to conduct the coupling analyses of energy flow, carbon flow, material flow, and cost to advance carbon neutral pathways.
  • Continue to conduct tests for low-carbon emerging steelmaking technologies, with operability, safety, and functionality.
  • Actively engage in industry-academia collaboration projects and focus on emerging low-carbon steelmaking technologies, including: charging low carbon ferrous burden into BF, replacing coal injection with hydrogen injection, as well as implementing carbon capture and other applications.
Opportunities Scenario Scenario Analysis Impact on CSC Operations CSC's Responses Metrics and Targets
Entry to renewable energy/ automotive related supply chains Temperature rises 1.7℃ (IEA APS)
  • The installed capacity of global wind power generation is expected to increase by 220%, and electric vehicles are projected to constitute 40% of the automobile market in 2030.
  • The renewable energy and electric vehicle markets are flourishing, and if CSC developed products that are aligned with market trends, the revenue may increase.
  • Continue promoting electrical steel and advanced high-strength steel for electric vehicles to major automakers, including the development of corresponding product application technologies, and actively conduct product-related tests and verifications. (For more detail)
  • Optimize the performance of ultra-high efficiency electrical steel, as well as production adjustments and process development, based on the specific motor structures and functional requirements of domestic and international automakers.
  • Continue to develop high-strength, weldable, and highly resilient wind power structural steel plates needed for underwater foundations and wind turbine towers, to support the domestic production goals of wind power facilities.
  • Sales ratio of premium steel ≧ 50.3% in 2025.
  • Sales ratio of premium steel ≧ 51.6% in 2030.
Provision of high-strength steel to enhance climate resilience
  • In order to adapt to recurring climate hazards, governments worldwide would continue to strengthen the resilience of public infrastructure.
  • Strengthens public infrastructure and national resilience projects in line with policies, leading to the increase of steel demand CSC's revenue.
  • Provide high-strength structural engineering steel to meet construction safety requirements in extreme weather.
  • Continue to develop and promote high-strength structural steel products to assist in the planning of the country's medium- to long-term urban renewal and bridge reconstruction projects.