Appendix E  
Calculation Methods Appendix $–$ Part I

 

This appendix details the Commission’s methodology to calculate the emissions intensities of covered steel and aluminum produced in the United States by product category in 2022. To reach this set of estimates, the Commission calculated facility-level scope 1, 2, and 3 emissions within the system boundaries described in chapter 2. The Commission then allocated facility-level emissions to the facility’s production processes, at which point they were then used to estimate product-level emissions inventories$—$the emissions associated with product themselves. Emissions intensities were calculated by dividing each product’s emissions inventory by production output of that product.

The Trade Representative’s letter specified many of the data collection methods and data sources to be used in this investigation as well as coverage in terms of the scope of emissions, product categories, and materials to be considered. In order to fulfill the elements of this request, the Commission reviewed existing standards and frameworks for GHG emissions accounting. This review provided the Commission with an understanding of the existing approaches for emissions accounting. The Commission then created an outline for its own methodology, generally following these accepted approaches within the confines of the data available and with an understanding of the end use for these measures (i.e., to inform international trade policy).480F[477] The Commission sought feedback on its proposed calculation methodology throughout the investigation via interviews, site visits, public hearing testimony, and investigation record submissions from industry, nongovernmental organizations, labor groups, U.S government agencies, think tanks, and academia. After receiving this feedback, the Commission worked to incorporate pertinent comments into its approach and continued to refine its methods based on further desk research on available data sources.

As mentioned in chapter 1 (“Guiding Principles for This Investigation”), the Commission strove to satisfy several guiding principles in the development of its methodology. In particular, the methodology was designed to achieve the principle of completeness, with consistent collection of the same set of emissions across all facilities within broad system boundaries. In addition, the methodology sought to maximize interoperability with existing data sources and government frameworks for emissions accounting. This orientation of the methodology in turn informed the development of the data collection strategy, which was designed around acquiring the level of precision needed to deliver measures responsive to trade policy while minimizing the reporting burden on the respondent and protecting confidential business information.

This appendix contains the detailed data sources and calculations for each step of the Commission’s methodology, following the high-level descriptions in chapter 3. The appendix then provides an overview comparison of the different standards and frameworks the Commission consulted in the creation of its own methodology. The appendix closes with a tabular review of the data sources that the Commission used to develop and verify its emissions intensity estimates.

I. Overview of Product-Level Emissions Intensity and Inventory Calculations

For all product categories ( $category$ ), the Commission calculated emissions intensities ( $GHGintensit{y}_{category}$ ) by dividing the product-level emissions inventory ( $GH{G}_{category}$ ) by production of that product ( $Outpu{t}_{category}$ ) (equation E.1). This approach was taken both for the industry-wide emissions intensities presented in this report and for the emissions intensities of products made by individual facilities.481F[478]

$$\begin{array}{c}GHGintensit{y}_{category}=\frac{GH{G}_{category}}{Outpu{t}_{category}}\left(E.1\right)\end{array}$$

$GH{G}_{category}$ includes the totality of emissions that occur during all processes within the system boundary that produce$—$or supply energy to the production of$—$the product category. The Commission developed a uniform approach to calculating $GH{G}_{category}$ for “reference products,” a defined set of mutually exclusive product categories that include all covered steel and aluminum products and other upstream materials made by facilities producing covered products within the system boundaries of this investigation (see table E.1). These “reference products” are denoted throughout this appendix’s equations with the $product$ subscript.482F[479] For each reference product, $GH{G}_{product}$ was calculated using equation E.2.

$$\begin{array}{c}GH{G}_{product}=UGH{G}_{product}+ {{\displaystyle \sum }}_{material}ICGH{G}_{material, product}\left(E.2\right)\end{array}$$

$UGH{G}_{product}$ refers to the “unit process emissions” directly attributed to the discrete production process (the “unit process”) that makes the reference product and is calculated using equation E.3.

 

$$\begin{array}{c}UGH{G}_{product}= S1P UGH{G}_{product}+S1FC UGH{G}_{product}+S2 UGH{G}_{product}+S3 UGH{G}_{product} \left(E.3\right)\end{array}$$

Scope 1 process emissions ( $S1P UGH{G}_{product}$ ) and scope 1 fuel combustion emissions ( $S1FC UGH{G}_{product}$ ) are the direct emissions that occur in the unit process itself. Scope 2 emissions ( $S2 UGH{G}_{product}$ ) and scope 3 emissions ( $S3 UGH{G}_{product}$ ) are indirect emissions associated with the unit process due to that production process’s direct use of purchased energy and material inputs.

The following sections of this appendix covering process emissions, energy-related emissions, and scope 3 emissions provide greater detail on how the Commission calculated each of these scope-specific unit process emissions terms. All these approaches, however, use the same process subdivision and physical allocation principles described in chapter 3 (“Allocation of Facility-Level Emissions to Unit Processes”), in particular, the allocation of facility-level emissions to “subprocesses.” Subprocesses are defined facility processes for which facilities provided input and output data within the questionnaire and that correspond with emissions data reported under the GHGRP program.483F[480] Some subprocesses produce only a single reference product, in which case subprocess-level emissions serve without modification as unit process emissions for that reference product. Other subprocesses correspond with two or more reference products, in which case subprocess-level emissions are further allocated to the multiple unit processes corresponding with those reference products using physical allocation.484F[481] The list of subprocesses and corresponding reference products used in this investigation is provided in table E.1.

Table E.1 List of facility subprocesses and corresponding reference products

Subprocess	Corresponding reference products
Anode baking for primary unwrought aluminum production	Carbon anodes
Smelting of primary unwrought aluminum	Primary unwrought aluminum
Casting of primary unwrought aluminum	Primary unwrought aluminum
Secondary unwrought aluminum production	Secondary unwrought aluminum
Wrought aluminum production	Bars, rods, and profiles; plates, sheet, and strip; foil; wire; tubes, pipes, and tube or pipe fittings; castings; forgings
Lime and dolime production	Calcined lime; calcined dolime
Production of oxygen, nitrogen, argon, or hydrogen	Oxygen; nitrogen; argon; hydrogen
Metallurgical coke production (e.g., in a coke oven or coke battery)	Metallurgical coke
Iron sinter production	Iron sinter
Liquid pig iron production in a rotary hearth furnace	Pig iron
Blast furnace operations, including pig iron casting	Pig iron
Steelmaking, including BOF or EAF operations, preheating ferrous scrap, refining/ladle station, decarburization, and casting	Semifinished steel (carbon and alloy, stainless)
Remelting and further working of previously cast semifinished steel into different forms of semifinished steel (e.g., electroslag remelting, vacuum arc remelting)	Semifinished steel (carbon and alloy, stainless)
Hot-rolling flat steel products	Hot-rolled flat steel products (carbon and alloy, stainless)
Cold-rolling flat steel products	Cold-rolled flat steel products (carbon and alloy, stainless)
Production of seamless tubular products	Seamless steel tubular products (carbon and alloy, stainless)
Production of non-seamless tubular products	Non-seamless steel tubular products (carbon and alloy, stainless)
Hot-working long steel products	Hot-worked long steel products (carbon and alloy, stainless)
Cold-forming or cold finishing long steel products	Cold-formed long steel products (carbon and alloy, stainless)
Coating, cladding, or plating flat steel products	Carbon and alloy coated flat steel products
Ambient heating, cooling, ventilation, and lighting supply in facilities where production occurs, if measured separately from the process-specific fuel use reported above	All
Processes used to make products other than covered steel, covered aluminum, or their upstream material inputs	None
Activities of other producers operating on-site	None
Stationary equipment that shreds or sorts scrap	None
Ancillary (non-production) activities that are not associated with production floor operations	None

Source: Compiled by the USITC.

Note: Each reference product made by a subprocess has a corresponding unit process (i.e., the unit process is the specific process covering the production of the reference product). Emissions associated with subprocesses that correspond to no reference products are out of the Commission’s system boundary and are not allocated to any product-level inventories. The emissions associated with ambient heating, cooling, ventilation, and lighting supply are allocated to any reference products and any noncovered production using the physical allocation approach. The term “carbon and alloy, stainless” indicates that the subprocess makes stainless steel and carbon and alloy steel versions of that product type.

In addition to unit process emissions, equation E.2 includes the contributed emissions from upstream processes in the facility that do not directly produce the reference product but are still included in the product-level emissions inventory, captured in $ICGH{G}_{material,product}$. Specifically, $ICGH{G}_{material,product}$ is the inventory of emissions associated with a quantity of a material ( $material$ ) that is made in the same facility and used in the production of the reference product. This term is summed across all materials made in the same facility that feed into production of the reference product. The methods for calculating $ICGH{G}_{material,product}$ are described below (“Computing Product-Level Emission Inventories”).