Description: Nick is joined by Tim Hill, the General Manager of Sustainability Solutions for Nucor Corporation. Nucor is the largest steel producer and recycler in North America. Plus, Nucor produces steel via a larger circular and electricity-powered process; their steel uses recycled scrap and is made in electric arc furnaces (EAF) instead of blast and basic oxygen furnaces (BF/BOF). This makes Nucor not just one of the largest steel producers in the world, but a leader in steel decarbonization. Whereas green steel is often something that’s referred to as a future possibility, much greener steel is already available domestically today. In addition to these points, Nick and Tim discuss the following…:

1. Misconceptions about ‘hard to abate’: A necessary reframe for the fact that steel is often seen as a ‘hard to abate’ sector, given that Nucor already offers steel that In comparison, emits only 0.77* tons of CO2 per ton of steel produced for Scopes 1-3. That’s less than one third the GHG intensity of BF-BOF steelmaking (Worldsteel).
2. Additional decarbonization: There are many areas where Nucor can achieve additional emissions reductions along their supply chain, including in sourcing renewable and cleaner power. This is an area where Nucor is leading the market with numerous technological partnerships. 
3. Global leadership: How can Nucor’s expertise in greener steel manufacturing spread to the rest of the world? There’s a lot of work to do to decarbonize steel; Nucor finds itself in a powerful leadership position, not just to export greener steel to markets globally, but to shape and influence how the entire world approaches decarbonization.

… and much more!

Timestamps:

00:02:17 - Guest Introduction: Tim's Career at Nucor

00:04:47 - Nucor's Enterprise Strategy and Decarbonization

00:05:08 - Common Misconceptions About U.S. Steel Industry

00:07:08 - Nucor's Leadership in Steel Recycling

00:11:19 - U.S. vs. Global Steel Production Methods

00:14:17 - Nucor's CO2 Emissions Compared to Global Averages

00:17:06 - History of Nucor's Decarbonization Journey

00:21:46 - Market Evolution and Customer Demand

00:25:56 - Catalytic Demand for Clean Energy

00:28:12 - Decarbonizing Remaining Emissions

00:31:05 - Investments in Fusion and Hydrogen Technologies

00:34:42 - Policy and Regulatory Frameworks

00:38:39 - Opportunities for Nucor in Global Markets

00:42:26 - Broader Climate and Energy Topics

Learn more about Nucor and their sustainability efforts here: https://nucor.com/sustainability

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Nick: Welcome to The Keep Cool Show, the podcast in which we cover how cutting edge climate technologies connect to the world in which we live. I'm your host, Nick Van Osdaal. Is it correct to say that new core on average is closer to, you know, say 700 kgs of CO2 per ton of steel produced?

Nick: Yeah, I mean, that to me was when I first learned that it was very striking, because if you're looking at new core versus a global average, for instance, not even necessarily just the dirtiest blast furnaces, it's already close to a 50 percent reduction in CO2 emissions. And incidentally, like if you look at a lifecycle analysis of trading, you know, an internal combustion engine car for an EV, that's not like a 100% reduction either. Often that's closer to the similar range of 50 to 60%. So that sort of is the genesis of, you know, some of my thinking and certainly I'm sure you're all thinking is around, okay, like yes, getting to a true net zero for steel is certainly will take a lot more work and a lot more capital investment. But as far as actually driving meaningful decarbonization results, like we can already do that today and Nucor's already proven that.

Tim: We absolutely have. And that I love how you just said that, Nick, because that is the message that we're preaching. You know, I kind of consider myself to be, you know, one of I'm not the only one inside this company, but certainly one of these decarbonization evangelists that I mean, essentially, that's what we're doing. We're telling people, you know, yes, do we have more to do? For sure. We have more to do. We're not at zero. Right. And there needs to be massive investment, both in the electrical grid in the United States, that we can help influence, but also in just technology in general of how we're making steels.

Nick: All right. Tim, welcome to the Cube Cool Podcast. It's great to have you. Nick, it's good to be here. Thank you. All right. So before we get into the nitty-gritty of steel manufacturing and all of the decarbonization and kind of global positioning questions we can discuss on that front. Why don't we just give folks a little bit of a window into your career, how you first landed at Nucor, and sort of the progression of the work that you've led over time.

Tim: Yeah, awesome. Thank you. Wow, my career. So I've been in the steel business almost 35 years now. I grew up in a town west of Chicago, about 100 miles. There was a steel mill there. You know, kind of watched it all my life. And, you know, a bunch of my buddies growing up, their dads and grandfathers worked at the steel mill. And, you know, kind of on a weird twist of fate, none of my family actually ever did. But I knew some people that, you know, were connected and loved the concept of selling. I was kind of I worked in my younger years, kind of selling things like in retail and different opportunities like that. So I met a buddy of mine who was in the commercial or what we call commercial today would have been called sales back then. He was in the sales department, told me about a job. I applied, got the job, and that started this you know, multi-decade career that eventually, you know, almost 30 years ago got cross paths with Nucor. And I remember at the time working at this other company, seeing an article in a magazine, in a trade magazine, where they talked about the egalitarian structure of Nucor and how unique it was as a company. And I remember taking that magazine, kind of tossing it on my buddy's desk saying, I want to work for that company. Because that was so different and unique from the company that we worked for at that time. And so, you know, fast forward, he and I both actually ended up leaving that that old company, and we both ended up at Nucor together, and then subsequently worked. He's since retired. He was a little older than me. He subsequently retired, but I've been very fortunate to spend now 28 years inside this company and have always been in these commercial type of opportunities roles, first in frontline sales and then eventually working into sales management, leading teams. And then five years ago, I was able to join our corporate enterprise team and worked on enterprise strategy, which includes decarbonization and circularity.

Nick: Excellent. Yeah, well, congrats on manifesting the role in a way all the way back then and for the long career sense. As we start to talk about steel and obviously in the confines of this podcast, we'll certainly talk about sustainability, decarbonization, a lot of those topics. I think I try not to read people's minds, so I won't say that these are things that my listeners might think, but these are things that I certainly would have thought a year ago, thinking about steel, especially in the U.S. I would have come in with the assumption that A, the U.S. had offshored most of that manufacturing capacity 20-plus years ago. I would have thought B, it's a really emissions-intensive industry. There's a lot of carbon dioxide emissions associated with producing steel, and those come from a variety of different sources, if you will, in the steel manufacturing process. And I would have also kind of seen steel as sort of what folks call a hard-to-abate sector, where it is both high in emissions and difficult to decrease those emissions meaningfully. I think that, as we'll explore in this conversation, all of those things can, to a certain extent, be kind of contested by Nucor's position. But as we sort of wade into some of those topics, I'm curious whether those are points that you encounter a lot, even as Nucor leads work to kind of disprove all that, and sort of some of your early refutations of those concepts, perhaps.

Tim: Yeah, it's really good. You know, I'll take you back to one point in my life. I lived in West Lafayette, Indiana, when I was a commercial leader for one of our divisions in central Indiana. And I remember having a conversation with a bunch of Purdue, my neighbors, who happened to be professors at Purdue University in a variety of different, you know, areas. And they said something much like what you intro the conversation or the intro the question with. It's like, do we make steel in the United States? I didn't realize we did that anymore. And ironically, West Lafayette, Indiana sits between Gary, where you have the remnants of what were the origins of steel production in the United States. You've got But operational, I mean, these are not, they're not dead companies. There are very viable companies today that make steel a particular way. And then 35 miles to the south of West Lafayette, Indiana, you have Nucor that makes steel in a very different way. Right. And so thankfully the steel industry in the US is very healthy and it's very, it's growing and, and it's being led by Nucor. We're the largest steel producer in North America. And even I think more important to that, we are also the largest recycler by weight of any product in the Western Hemisphere. Right. So I think the other cool thing about steel and the fact that it's still very viable is that it's become as much about recycling as it is about manufacturing a new product. Right. So, key point one, it's a recycling business as much as it is a production business. And then you get to this issue about, you know, if you do or are in the world that knows that steel is being made in the U.S., how steel is being made is a significant thing to know, right? And so I think we spend a ton of time at Nucor Talking to people that are connected to our business, whether they be direct customers or what I would call influencers in and around the ecosystem of steel, helping them understand how steel is being made today and why it's important to know the difference. Because you're right also that steel gets categorized as a hard-to-obeyed industry. We take umbrage to that a little bit. We say that's not necessarily true. In fact, we believe that steel can be decarbonized. It is being decarbonized. It isn't hard to do it. It might be somewhat expensive in some parts of the world and including the United States in some categories. But I think let's have a real discussion about what it means and how do you get there and then what the timing of that decarbonization step looks like.

Nick: Yeah, no, I think that's great. And I'm glad that you also sort of started to raise some of the bifurcation or differentiation of, you know, there are a number of ways to make steel. Maybe for a listener's edification, we can start by sort of explaining the basics of how steel is, you know, maybe I'll say traditionally made or was made. And then we can enter into some of the conversation of what differentiates new cores approach and what results and outcomes those differences drive. Yeah, absolutely.

Tim: So fundamentally, there's two ways that steel can be made. And these haven't changed a whole lot, particularly one process hasn't changed a whole lot from the inception of when it was created, you know, a couple hundred years ago. And we helped a few years back with one of our trade organizations. People were really struggling with understanding the technicalities around how steel was being made. So there are really two terms that explain the difference. One term is called extractive. One term is called circular. Let's look at extractive first and foremost. And that is, you know, the beauty of that word is that it sort of conjures up this mental image of what does extraction mean, right? We're taking things out of the earth, right? So iron ore, limestone, coal, Those things are being put together in a big kettle, essentially, and a massive amount of oxygen and energy is used to, and that process step is called a blast furnace, ironically enough, that those elements are blasted with these gases to make an iron unit. So essentially, you know, these products, these heavy earth elements go into this big vat and they're blasted and out the bottom comes a trickle of liquid molten iron that is solidified and then that's further refined in another process step, which is called a basic oxygen furnace. So more oxygen is introduced in that step where that's further refined from an iron unit with some additional additives to be made into steel. Now, if anybody in your audience is a metallurgist, they're probably cringing because I left a ton of steps out. But essentially, that's the basics of what we just did, right? As you can imagine, not just in getting the elements right in the extraction of those elements out of the earth, right? The mining process is heavily CO2 intensive, but also that step of making iron and then further refining into steel is also very heavily intensive CO2. That is essentially the old fashioned way. Now, the beauty of North America is 70% of the steel that we make today doesn't use that processing. But the unfortunate thing is 30% still does, and the steel industry in the United States is about 100 million tons a year. So you still have 30 million tons of steel that's made using that old process today in the US, right? Globally, those numbers flip, and 70% of the steel made in the world is made using the old process. Only 30% has converted to a new process.

Nick: Yeah. And when I think about like total global steel production volumes annually, that's in the billions of tons, right?

Tim: Roughly 2 billion tons around the globe.

Nick: Maybe 5% of total global manufacturing capacity. That's right. Yes. So let's talk a little bit more now about, you know, what differentiates new core and your process compared to the process that we just outlined as being at least like historically typical and perhaps probably still predominant across the rest of the world.

Tim: Yeah, so I referred to it earlier. The other side of this is what we would call circular steelmaking. And it primarily relies on two things. It relies on electric furnace steelmaking. So the fact that we still need to make a liquid material that we're going to cast and then further refine into rolling into a shape, whether it be a coil or a structural component like an I-beam. So the process relies on electricity as the furnace source, but then we rely on scrap recycled material as the base of the feedstock that we're going to use, right? So as we recycle automobiles or refrigerators or old buildings or old bridges, as those get pulled out of service, those go into the recycling stream, right? We have a very healthy recycling stream in the United States for ferrous metals. we bring those into our, you know, there's a series of collection areas across the United States, across North America, it's not just the US, but across North America, that gets works its way into the stream. We use those products as the base load. It's not 100% of what we use to make steel, but it's the base load, about 75 to 80% of what we use is scrap. So you start out using junk, right, that's been recycled, which is really good for our environment. Yeah, we use electricity, which is continuing to be influenced by renewable energy and then even nuclear assets that are still operating in the United States today, right? So while not renewable, certainly carbon-free. And as the grid continues to green, that continues to get better as well. We can talk about that. But essentially, that's the process, right? So you've changed this very old, very dirty process that is, if you looked at it in and of itself, could be said, hey, that's hard to obey. We've already addressed it in a huge way in the last 60 years in the United States, primarily led by Nucor in our growth into these markets.

Nick: And you and I have talked about this a little bit, but I think some of the headline kind of statistics around the decarbonization results that this can drive are quite striking. So, you know, I'll let you correct me, but if memory serves, and I did some research on this in advance, but I think globally, if you look at sort of typical kilograms of CO2 emissions per ton of steel produced, somewhere around maybe 1,400, 1,500. If you look at dirtier blast furnaces in China or India, that can come in as high as maybe 2,300 or higher. And is it correct to say that Nucor on average is closer to, you know, say 700 kgs of CO2 per ton of steel produced?

Nick: Yeah, I mean, that to me was when I first learned that it was very striking because if you're looking at nuclear versus a global average, for instance, not even necessarily just the dirtiest blast furnaces, it's already close to a 50% reduction in CO2 emissions. And incidentally, like if you look at a lifecycle analysis of trading, you know, an internal combustion engine car for an EV, that's not like a 100% reduction either. Often that's closer to the similar range of 50 to 60%. So that sort of is the genesis of some of my thinking, and certainly I'm sure you're all thinking around, okay, yes, getting to a true net zero for steel will certainly take a lot more work and a lot more capital investment. But as far as actually driving meaningful decarbonization results, we can already do that today, and Nucor's already proven that.

Tim: We absolutely have. And that I love how you just said that, Nick, because that is the message that we're preaching. You know, I kind of consider myself to be, you know, one of I'm not the only one inside this company, but certainly one of these decarbonization evangelists that I mean, essentially, that's what we're doing. We're telling people, you know, yes. Do we have more to do? For sure. We have more to do. We're not at zero. Right. And there needs to be massive investment both in the electrical grid in the United States that we can help influence, but also in just technology in general of how we're making steels. But the U.S. and North American steel producers led by Nucor, we have a great story to tell and we can help our customers today decarbonize their production footprint right now with the materials that we're making.

Tim: Here's what I would tell you. As much as we'd like to take credit that we saw this 60 years ago and that decarbonization was going to be the prime driver, that's not why we decided. So to help kind of your listeners. Yeah. Nucor is only ever made steel this way. We did make steel using extractive steel technology 60 years ago, and then we convert it. We have always used the circular method to make our steel. Understood. Now, primarily, if you go back in the history books, the reason Nucor was creator, the how we were founded, was essentially we were a consumer of steel products. And back in the 60s, there was one of these periods of time where steel was very hard to get. And the traditional steel makers, some of the people that we now compete with that are still in the business, but the traditional steel makers had basically told the company at the time and our founder, we can't get you enough steel to operate your facility. You know, there's a shortage of steel. We don't have enough. We've got other people we're going to give it to. And so we were left essentially at a quandary at that point of, do we go out and buy materials on the global market? Do we import foreign steel into the United States? We're an American company. We're proud of our heritage and we're proud to be an American company. And so at that point, he and the management team at the time said, That's not a strategy for us. We're going to build a steel mill to make our own steel, and we're going to use electric steelmaking technology. It was a really small footprint plant. It made a ton of sense economically for what we were trying to achieve. It works really well. And so we replicated that model a bunch of different times for those products, which initially were long products, so construction-grade steels originally. And then in the mid to late 80s, we started to think about and look towards making flat rolled steels or flat steels, as they're called in the market, that are predominantly going to your large OEMs, people making automobiles, people making industrial equipment, agricultural equipment. Right. So in the mid to late 80s, we converted and started to make those steels as well, using the same process. And we were really the first, we were, not really the first, we were the first in Crawfordsville, Indiana, to build the first commercial plant to make flat rolled steels using electric steel making technology. And then the casting technology was also part of that revolutionary way of making steel for flats. Understood. Yeah. That's why we got into it. So initially we were drawn to it because it was the only technology available at scale that we could afford probably realistically back in the day as the company was coming together. Right. I mean, we didn't have unlimited amounts of capital. We had to be smart with our money. Right. Now, what that's worked into over time is about four years ago, certainly in 2021 probably started early about the time that COVID started to kick off and people were really thinking about supply chains and the impact of carbon in the supply chain. COVID only sped that up because supply chains, as you well know, have gotten just completely disorganized around the world. And then we were approached with one of our automotive customers at that point saying, hey, look, we're a first mover in this space. They had just announced some big goals for electrification of their fleet. They were getting ready to roll out their first EV. luxury vehicle, and they wanted to splash the market with a net zero steel at scale. We have the capability of offering that to them. And so at that point in late 2021, we introduced our first I'll use this term and I'm air quoting it, as I say, a green steel offering to the market with a partner customer at scale. And that's really what's kicked this thing off. Since then, it's just been a It's been a wild ride for the last two years of changes as we've seen the market evolve and more customers lean in, not just in the auto space, but also in technology and in construction. And, you know, certainly not just U.S. customers, but global customers as well.

Nick: Yeah, makes sense. I'm reminded of a number of things, and the historical antidote I feel like is a great example of so often there are fears of or very real periods of material constraint, and that drives innovation. And often it's a little scary, and people kind of throw their hands in the air. They're like, we're not sure what we're going to do. And we see that today, whether it's with you know, certain metals for batteries or copper in general for the energy transition. But, you know, the upshot of that is that typically, you know, I don't think humanity has ever really run out of a core commodity or core sort of resource at scale. And we tend to find ways to adapt, and it breeds productive things such as, you know, Nucor's leadership on making steel in an electric fashion. The auto example is also good because I think it's a good way to trace how interconnected so many of these decarbonization or just manufacturing sectors are in general. It's like if you think about the lingering emissions footprint of an EV, a lot of it is from the manufacturing of the battery and probably also from the rest of the car of how much embodied steel and aluminum it is. So as you carbonize steel production, you also have a lot of other benefits for whether it's the built environment, transportation sector, what have you. dropping those kind of embodied carbon numbers. And the third thing I wanted to double click on a little bit was the actual kind of like the net zero offering, given that there is still emissions associated with new core steel production, how do you offer the net zero product?

Tim: Yeah, so to clarify what the offering was and has continued to evolve into, let's talk a little bit about that. So the initial offering was a scope one and two only, net zero at scale, right? The way we offered that or the way we handled the emissions on that was carbon offsets for scope one and renewable energy credits for scope two. So as the world now, ironically, and I'm sure you and your listeners have probably watched this evolve just like we have, you know, we kind of internally joke, the ink wasn't even dry on our first contract. And COP 27 rolled out and said, hey, carbon offset's not a great thing, hard to manage, hard to audit, hard to verify. Is it real? Is it not? And, you know, we find ourselves in that same category. But at the time, that was the bridge mechanism that was available to us to get to new technologies. Right. So we've seen the market evolves really away from Scope 1 and 2.0 and really focused, we still have customers that are buying that product that are interested in that product, but much less than our customers have really leaned into this Scope 2 or what we call Econic RE. And part of what makes this unique, our offering unique to our customers on this is we're not just going out and buying renewable energy credits on the market. We could do that if we chose to. You know, there's nothing that stops us from doing that. But our partners just broke ground April 17th, Next Air Energy on a solar installation in Kentucky called Seabury. Right. So the combination of those two projects give us renewable energy credits that we use to essentially offset, if you will, our scope to emissions on the steel that we're making for our customers that are buying that. Sure. And that's important to them. So it's not, again, as important to our customers is not the fact that it's legitimate renewable energy that's being added to the grid, but the fact that on both of these products or projects, rather, if Nucor hadn't signed on, you know, our partners were basically like, Hey, these projects probably don't go if we don't have new core, right? Right. So are bringing our investment quality, you know, or our investment grade respect to the market and the money and the capital that we've invested candidly that got those projects forward.

Nick: Yeah. As I said, it's a good example of sort of catalytic demand and demand growth in general for electricity is such a hot topic right now. And sometimes I, not that my opinion is the most informed, but I think that some of the fears of, you know, how much energy data centers are going to consume is perhaps a touch overblown. But I think it is, again, actually an opportunity to flip challenge on its head and say, you know, this is a good moment for folks who already use a lot of electricity to step up and sort of orient their businesses in a way to where they'll be catalytic to the addition of lots of clean energy onto the grid.

Tim: Well, I mean, you touch on a key component for us. So today, in most of the jurisdictions where we operate steel mills and steel melting facilities, we're probably, if not the largest industrial customer in that region, we're right there with, you know, others who could use a lot of electricity. That's changing as we move forward. But because of data centers and particularly, you know, the large data centers, AI and different things like that. And we'll see how much of that actually comes to fruition, how much of that demand is real demand, right? I think that's certainly a question you bring up there that has to be defined. But our demand is real. I mean, we've been operating in a lot of these places for tens of years, right? Multiple tens of years. And so, you know, but we have super good relationships with those utilities. Those are all in most cases, almost all of our markets are regulated markets in the United States, maybe the exception of a couple. And so how we operate in the respect that we have for our utility partners, it's real because, you know, we've worked together for a long time. They are saying to us now, hey, we recognize the energy transition is real. Yeah. And energy demand is real. Energy transmission and the issues around transmission of new energy sources are also real. Right. And we're involved in those conversations as well. I tell you, it is a deep issue. I don't think it's been figured out yet. We're certainly trying to help influence that with the relationships we have with our partners. But you don't have to read very much in any kind of press outlet to see, you know, utilities in the United States beginning to comment about the realities of the grid today and what needs to be done for the future.

Nick: I think the access to clean or more renewable, what have you, electrons, is also a good entry point. I'd be curious to talk a little bit about as far along as new core is compared to the rest of the world or much of the rest of the world in terms of reducing the emissions associated with steel. When you think about sort of the remaining emissions inherent to the process today still, how much of that is, you know, potentially can be decarbonized with access to, if you had access to clean energy 100% of the time, and then how much of it is still other components of the process that maybe require technical innovation?

Tim: Yeah, I think it depends. You know, for us, there's two buckets of work that we focus on from a decarbonization standpoint. You just touched on one, and we'll talk about it more deeply. That's carbon-free electricity. Where is it going to come from for the future? The other bucket is carbon-free iron units. Free electricity still represents, I mean, that's 20 to 30% of our footprint. So if you took that 770 and you broke it down into buckets, depending on the mill and the region and the grid that that sits on, we've got some grids in the United States have gone after this a different way, right? We still have some that are more heavily coal, some are more heavily nuclear and or renewable sources. Some like our mill in Seattle, Washington, which we're really fortunate to have a really cool facility in Seattle, Washington. You know, our scope to emissions there are basically zero, right, because of hydropower. And but that's not available everywhere in the United States. Right. So I think 20 to 30 percent of our footprint still remains scope to. So as we this it's a huge piece of what the future looks like because we need electricity, just like all of our customers need electricity, just like all of us as consumers need electricity. But we need that electricity to be maintained and to be made in a renewable and sustainable fashion for the future, right? Now, renewable becomes an interesting topic there because we think of it more in carbon free. than necessarily just renewable, right? So we absolutely very much advocate advanced nuclear and the growth of nuclear technology in the United States. We're behind that. We're investing in it. So it's bigger than just solar and wind, but it is also inclusive of solar and wind and, you know, battery storage and other things that are going to come along.

Nick: And then I'd be curious just to touch on the investments a little bit. I think Electra is a good example. We've also made some investments elsewhere, more on the sort of carbon-free energy side. But let's talk a little bit about, you know, some of that sort of forward-thinking, future-oriented, sort of almost venture capital-esque kind of investments that Nucor's led of late. Why don't we start with that?

Tim: Well, you can think about electric. On the other side, you know, we talked about electricity. You know, we've invested in the Helion, right, which is fusion technology in advanced nuclear. I think it's very similar on either side. You know, what Nucor hasn't done, we, there's nothing wrong with doing this. We've got partner customers that have set up, you know, some of these innovation funds or sustainability funds where they're operating more like a venture capital fund, where they're investing in a variety of different technologies. And it's kind of a scatter approach into a variety of things. What we're trying to do is think about what is it that we need to continue to decarbonize our process? And then, you know, we're a great company. We've got great teammates. We've got great investors. Those investors require returns, right? So what we're also trying to think about is we have a business to operate here. So let's invest the hard-earned money that has been returned to us by our investors are, you know, the people that buy our stock. they're giving us cash to manage it and manage it in a way that's gonna grow it, right? So we're trying to think about technologies that are coming that we believe, one, have a high likelihood of success, but also have a high likelihood of helping us decarbonize our process into the future at an economics play that works with reality today as we see it, both for today, but also for the future. I mean, there's a ton of technologies that get pitched to us every week. But candidly, when you run the economics on it, you're kind of like, hey, this is a great idea, but it probably doesn't work economically, given where the market is. Right. And, you know, whether you call this a green premium or you call it a government paid incentive to help you, I mean, it's still cost. Right. There's somebody's paying that bill somewhere. That's it's either a premium on a product or it's tax for all of us that we all get to pay. You know, we're trying to think of our investments in those areas to make sure that we're aligning them with both our ability to use them in our process, but also our ability to use them with our customers in a way that that doesn't penalize our shareholders.

Nick: Shifting gears a little bit, I'm curious to think about, and you know, this isn't necessarily inherently your job, but I think Nucor certainly occupies a bit of a leadership position when I think broadly about, you know, On the whole, global steel manufacturing is certainly still a major CO2 emitter. The percentage points vary depending on who you ask, but 7, 8, 9% of global CO2 emissions, that ignores some other greenhouse gases, but obviously still quite salient. I guess this probably comes up when you think about, you know, selling into global marketplaces and competition. But when I think about blast furnaces in China, for instance, that are making, let's just say, you know, I'm doing air quotes now too, but dirtier steel, it strikes me as a difficult sort of construct to think about how one would encourage or even require producers in those geographies to decarbonize. If you think about some of their blast furnaces, they're probably fully depreciated, and so there isn't necessarily a massive incentive absent some sort of external policy for them to decarbonize. So when you all look at the global purchasing landscape, some of the global policy landscape, How do you think about what in an ideal state would encourage shifts in purchasing, let's say, to encourage more folks to buy from a company like Nucor as a much lower carbon emissions footprint per ton of steel than from all these other producers globally that haven't necessarily led on the decarbonization front historically?

Tim: It's a great question. And one that we think about and talk about weekly, because here's the reality, right? This is a global market. We get that right. Steel travels well. It always has. you know, tariffs, trade barriers, tariffs, which, you know, Nucor supports because of the, you know, the fact that governments are so involved in other countries in the production and sale of industrial goods, right? So I get it, tariffs are a touchy subject and, you know, who's actually paying it? Who's getting the benefit? Who's getting, you know, the negative impact of a tariff? And that's a whole nother discussion for another podcast, I'm sure. So policy, essentially what you're asking is how does policy influence this moving forward, right? Because the only thing that changes this is for governments around the globe. First of all, I think we have to decide what will be, you know, when someone says, hey, I need green steel, it's super important and here's why I need it. What are they asking for? So I think having definition around Is there a target total embodied carbon for a metric ton of steel that needs to be achieved to be considered green? Now, that doesn't mean everybody that buys steel will need green steel. Sure. And that's probably okay. And that likely is where some steel producers in some other countries are looking at this saying, hey, when the dust settles on this whole discussion, if 70 or 80% of the global steel industry converts to green, that still leaves 20% of a very high number, 2 billion tons. That still leaves 20% of a very high number that people aren't going to care. And I can fit into that 20% and be just fine. You know, I don't know what motivates their thinking necessarily, but I do think as we go forward in the U.S., in North America more generally, you certainly start to see it in Canada. We're starting to see some of that in the U.S. You've seen it in Europe with CBAM. I think as trade barriers, trade restrictions get considered in the future, That is likely where carbon emissions limits probably get put in, embedded, introduced as part of those tariffs or those trade restrictions so that that kind of helps throttle what comes in from these other countries that are, you know, candidly, yes, they do have blast furnaces that are fully depreciated and operating just fine, but they also are building new ones. Yeah, right. So it's one thing to have an asset that's, you know, it's a 50 year asset and it's 15 years into its life. I understand that that's a challenge. It's something totally different if you're building that asset today and those that is happening in both India and China. Right. So.

Nick: Yeah, that makes a lot of sense. Yeah, I mean, it's funny, I used to, you know, two or three years ago, I kind of, anytime the word policy or regulatory framework or what have you came up, it always was sort of like this nebulous, confusing thing in my mind, and it sounded really complex. And often it is, but at its core, you know, a lot of it is designed to say, like, what are we going to allocate CapEx towards and who's going to pay for that? And so it has been interesting, you know, you mentioned CBAM, like carbon border adjustment mechanism in Europe, where Europe is trying new mechanisms to sort of regulate and encourage effectively more international investment in lower carbon technologies to produce certain materials, or at least to try to encourage companies within their jurisdiction to source from people who are making those investments. And yeah, it'll be quite interesting to see a whether that's successful or obviously quite early in it. I'm sure there'll be lots of intricate ways and clever ways that some producers globally skirt those or circumvent those policies. And it'll also always be interesting to see where else to what other geographies, some policies that might be successful, some of the learnings from that actually kind of matriculate.

Tim: You're absolutely right. And, you know, candidly, it probably for someone like Nucor, it opens opportunities for us to potentially export into Europe, because if you look at the restrictions and regulations of the early Things that we've been able to see regarding the carbon border adjusted mechanism certainly seems like we could qualify to ship materials into those markets if needed.

Nick: Zooming out a little bit, I'm curious, you know, we've talked in depth about technology, we've talked in depth about sort of global dynamics and obviously some of the decarbonization layer. You know, what else, especially thinking of Nucor's sort of leadership position in the U.S. as number one steel manufacturer in the U.S., doing it in an already reasonably decarbonized way, beyond those sort of things, what else would you want to make sure people know about the company, given your career there and your vantage point on everything happening internally?

Tim: It's a cool opportunity to be able to talk a little bit more broadly about Nucor. You know, 28 years in, personally, I'm still excited to come to work every day. Right. And I think there's a lot of people. variety of different reasons, right? There's a ton of people that probably can't say that, right? And what's exciting is that we find ourselves in a very old industry as a relative newcomer, right? We're a 65-year-old company, so it seems like we're old. And, you know, if I read, I think there was an article in the journal a few weeks back where You know, people who have been at their company for nine years, I think I referenced this last time we talked, are like dinosaurs now, right? If you've been there for nine years or more, I'm not sure what that makes me. And certainly I don't know what that makes Nucor. So we're a fossil probably at this point. But yeah, you know, fairly young when you think about the steel industry and how steel has been made. The cool thing about being a leader is that, you know, there's responsibilities that come with that, right? But there's also opportunities to have really substantive conversations about what these changes look like in the future, and how can we influence those things? How can we influence the impact of having a diverse mindset of leaders that are in our company, that are helping us make decisions, that are moving a big industrial company? We're not just a steel producer anymore. Right. We're an industrial we're a diversified industrial manufacturer. And as you know, taking that position and what that allows us to do and influence and the impact we have on our teammates and their families lives. I mean, that's amazing. I mean, it's just that's what's exciting about this, right, is that we're doing this. You know, it's not a virtue play for us. Right. There's a business to be run. Right. But it's super important that we run our business in a different way than we've run it before. That is an amazing step to take as a big American company that's had a massive amount of success. I mean, you could argue, don't touch a thing. It's working really well. Let somebody else worry about that, you know, in a decade after most of us, or at least after I'll be retired. But that's not what we're doing. We're saying, no, we're not going to be okay with that. We're going to do this now because it's the right thing to do. And there's a business to be had here.

Nick: Yeah, I love it. I feel like a broken record sometimes because I've been starting to say this more often, but sustainability has sort of been pigeonholed into this, again, air quotes sort of green thing where it's like, how do we do things in a way that's more produces less emissions or uses less kind of extracted material, what have you. But as far as a business is concerned, I think it's also extremely germane to talk about, you know, is this profitable? Is it good for the company's employees? Are they able to and energized to do the work that they do on a daily basis for the long haul? When you actually think about what the word sustainability means, like sustained will, and can we do this for a long time or even forever? That's exactly right. I'm curious, zooming all the way out, whether related to steel or Nucor or manufacturing at all, what are some other things in the broad universe of climate and energy that you find fascinating or that are compelling to you, interesting to you in this moment in time?

Tim: Probably the largest one, as I think about it, there's multiple, but probably the biggest one is, you know, it's fascinating to see hydrogen and the amount of work that people and thought, you know, I sort of joke, you can't have this many smart people and this much money chasing a problem and not come up with a solution eventually, right? I mean, look, there's The economics around hydrogen today are challenging, even after the incentives under IRA, under the Insulation Reduction Act, et cetera. But again, there are big companies in this country that are working on this feverishly with some of the best and brightest minds. I'm confident just as a human being, right, watching our history as a country and some of the awesome things we've done, that we will come up with a solution that's economical. And I think hydrogen probably is a big key to how industrial companies decarbonize the future. certainly plays a big role. But, you know, as a human race, you know, I sort of I love history. And, you know, I don't know exactly who the senator was or exactly when it was, but it was around the turn of the century. I'm reminded of that speech in Congress where someone said, why would anybody want an automobile when you have a perfectly good horse? Right. Yeah. So if I think about hydrogen, but more broadly, I think about electric vehicles and electrification of everything. You know, the EV market is kind of dipped right now. There was an excess of supply. People are trying to figure out the infrastructure around charging, etc. Pretty hard to argue that as we see the market in the auto business, which drives, you know, it's a consumer driven business and consumers care about where these things go. You have to just look at EVs and the future, not just the future of energy transition, but the future of the automobile. is pretty cool as it looks on the horizon. Yeah, I think those two things, they're certainly not, you know, mutually exclusive. They're joined in a lot of ways. I think those two things, hydrogen and then the build out of the EVs of the future, it's exciting time in this world of sustainability in general.

Nick: Yeah love it it is sort of easy to forget when you're in the weeds often like i am of how different the world already looks than it did five years ago and i think evs are hydrogen maybe it takes a bit more time but i think evs are a great example of that like where i grew up in california sure you started seeing evs 10 years ago but Now it's just like a completely common experience to probably something like every 10th car I see, different pockets of the country, but every 10th or every 20th car you see is an EV and it's become completely normal. And it's, it's a pretty stark change to happen in a short amount of time.

Tim: Yeah. I love it. I mean, I, that, and you know, then if you factor in the hybrid technology that's coming out there, right. I mean, I, I rent cars frequently because I travel all over the country and I do my best to Uber if I can, but if it's challenging, you've got to jump in a rental. it would be hard to not get a hybrid in a rental fleet today. I mean, that's pretty common today, right? So certainly, as that market continues to evolve, you know, what would be the unfortunate thing about human beings is we don't live long enough to have people around that lived through the fact that they could have a car, but they couldn't get gas except at a couple spots, and it was really hard to get there. Yeah, you know, which now, you know, there's gas stations everywhere. So nobody thinks about it. You have to believe that a hundred years ago, somebody was like, man, I sure like to drive, but it's really hard to get gas. Right. And, you know, I mean, we're so narrow minded at times as a humanity. How do we move this thing forward? I think, you know, companies like us and others are thinking about, you know, even though The person that's building out the infrastructure for charging stations may never directly buy steel. They certainly are an influencer in this business, and for us to have connection to those folks is pretty important.

Nick: To close on some call to actions, for folks who are listening in who may just be generally interested in learning more about Nucor and keeping up with the work that you all are doing, where are the right places for them to look? And then I imagine also that a global, large company like yours, there are many job openings, and that might be germane to some folks listening in too. So where would you direct those folks?

Nick: Excellent. No, I think it's a great note to close on. And yeah, even just from a pure interest perspective, I think it's always the world around us can seem so abstracted, but whether it's a commodity like steel or anything else, there's all these different sort of materials that make up the whole world around us. And so to the extent folks have interest, I always find it useful to just like pull one thread. And if you start to understand more about whether it be steel or yeah, some other very common material, it's always an interesting lens through which to appreciate the world around you more. So thanks so much for coming on and giving us some insight into the work that Nucor does.

Tim: Nick, it was my pleasure. Thanks for having me. Have a great day. It's great talking to you.

Nick: Thanks for tuning in. So you don't miss the next episode on another cutting edge climate tech, make sure to subscribe on Spotify, Apple, Google, or wherever it is that you get your podcasts. We'll see you soon.