From Carbon Footprints to Circular Economy: Yilmaden Holding’s Path to Sustainability

YILMADEN has a broader company strategy focused on growth. The Strategy has 6 pillars, one of which focuses on sustainability. Sustainability is not only a stand-alone pillar; it also integrates into all strategic pillars and operational processes.

Under the sustainability pillar of the YILMADEN strategy, we have four different operational strategies. These are ‘minimising carbon footprint’, ‘circular economy’, which focuses on waste management, ‘water sustainability’, and ‘social responsibility & governance’, which strongly emphasise governance and social aspects.

There are ten programs under these four operational strategies. To give an example of our programs and initiatives, we focus on energy efficiency and renewable energy usage to minimise our carbon footprint. Another program focuses on alternative reductants. As you know, we use metallurgical coke as the reductant material in the ferroalloy industry. Our primary greenhouse gas emissions (GHG) for Scope 1 come from coke. If we do not change this reductant material into a fossil-free or low-carbon emitting alternative reductant, we will be unable to reduce our Scope 1 emissions.

Another program focuses on carbon capture, storage, and utilisation solutions. This is considered depending on the location of our plants. We may store the CO2 we capture according to the country and the CO2 storage infrastructure available. For example, our Swedish plant is one of those that can store CO2. Other sites are very far from carbon storage areas. Therefore, we need to go to these sites for carbon capture and utilisation, use CO2 in chemical processes, and obtain other chemicals we can use in the circular economy.

To reduce climate risks to water availability for our operations and increase our flexibility to adapt to climate change, YILMADEN aims to reduce freshwater consumption, reuse water instead of discharging it, and collect rainwater at our plants and mines.

The last example of our program focuses on ‘Fossil-free mobile vehicles,’ such as electrical vehicles with or without batteries or mobile carbon-capture systems. These projects are currently in the R&D or feasibility phase.

It’s beneficial to recognise our gaps in sustainability, not only focusing on climate change or carbon capture but also on social needs. Sustainability now calls for ESG. The social and governance parts were not well-known by everybody, so it was a good tool for us to define our needs for improvements via the Responsible Chromium Initiative. Our clients also ask us whether we received the Ecovadis Survey for responsible chromium. So, it was a great tool to see our sustainability level, understand our needs, and communicate them to our stakeholders.

The YILDIRIM Group has an overarching ESG team consisting of a dedicated ESG Department and the ESG Board. Thanks to the ESG Department, led by Dr. George Robert Wagner, Chief ESG Officer, YILDIRIM Group develops group strategies, programs and goals while coordinating group policies and reporting to legal authorities and stakeholders (particularly investors). George also leads the ESG Board, a crucial decision-making body which collectively sets and monitors the strategic direction of our sustainability initiatives.

I am handling all the ESG initiatives at the YILMADEN level. YILMADEN is one of the leaders in terms of sustainability across the group. We have a clear direction for sustainability initiatives and improvements. I am also a member of the ESG Board, and I see the crucial value of having such a department to bring ESG initiatives to the board level.

At YILMADEN, our key priorities revolve around the four operational strategies, with focus points dedicated to each pillar. To minimise our carbon footprint, we focus on renewable energy and alternative reductants in the mid-term. Almost half of our GHG emissions come from our Scope 2 emissions due to the energy demand of electrical arc furnaces. In some operations, we have virtually no Scope 2 emissions. For example, Albania and Sweden have almost fully renewable energy, so their country factor is very low while calculating the Scope 2 emissions.

On the other hand, other plants, such as Türkiye or Kosovo, have higher country factors due to their energy sources, so our Scope 2 emissions are high. We focus on powering these sites with fully renewable energy. We have concrete plans to convert our facilities to renewable energy, including the YILSOLAR investment to establish a PV panel and cell factory that will produce IEC and UL certified TOPConcell Halfcut panels. The 65,000 m2 factory will have an annual production capacity of 1,200 MW. The Eti Krom Solar Power Plant, commissioned by YILDIRIM Energy in 2022, is among the top 5 solar power plants in Türkiye. YILDIRIM Energy aims to achieve energy self-sufficiency from renewable resources at NewCo Ferronikeli mining operations in Kosovo. After the initial capacity of 54 MW of solar power plants via the Drenas Solar Project, a total of 150 MW of solar investment on renewable energy is planned to be achieved by 2026. We are also actively pursuing purchasing power agreements with renewable energy producers. We are defining and engaging with the countries to sell us renewable energy.

Our commitment to the circular economy is not just a statement, but a tangible effort reflected in our waste management initiatives. We are innovatively reducing our operational waste, a key pillar of our sustainability strategy. Our strategic move to decrease the chromium content in our slag and tail allows us to utilise the non-chromium portion in construction materials, closing the loop and achieving full circularity. This innovative approach will inspire our stakeholders about our commitment to sustainability and the circular economy.

Before it is too late to stop climate change, everybody should try to positively impact the Earth, including governments, companies, non-governmental organisations, and all of us – each member of society.

All companies must establish a comprehensive strategy and management system for ESG, encompassing environmental, social, and governance aspects.

But indeed, upstream companies should focus more since many of their operations create GHG, and they have responsibilities to society. The companies should also influence their suppliers and contractors regarding the aspects of ESG, which many companies have started to do, especially in the last 2-3 years. It is also a legal requirement for European companies.

We have weekly and quarterly data collection and monitoring mechanisms. We calculate GHG according to the GHG Protocol and ISO 14064. Now, we are aligning our data collection and calculations with CBAM regulations. We also have Environmental Product Declaration (EPD) studies starting with our Turkish plant, Eti Krom; we will then spread it to all plants.

While you are preparing the EPDs, the Life Cycle Assessment should be done to provide a broader understanding of Product Carbon Footprint. We have established the Supplier Sustainability Management Global Operating Procedures at YILMADEN, which defines minimum supplier aspects for our critical suppliers through our sustainability journey. As a requirement of this procedure, we have started to do our supplier surveys and shared the results with our suppliers. We want to encourage, help, and support our suppliers in the sustainability transition.

We recently had a very impressive sustainability review by one of our customers. YILDIRIM has an end-to-end product delivery chain; we have mining operations, transportation lines, ferroalloy factories and warehouses; and we transfer the products again through our transportation lines. This approach puts us in a perfect position to ensure the traceability of our products. In this way, we meet the needs of our customers’ sustainability programs, covering all aspects of Environmental, Social, and Governance. Life Cycle Assessments also help us with the technical part of traceability. On the other hand, we have a Sustainable Supplier Program for our raw material suppliers or critical suppliers that are outside the scope of YILDIRIM.

It provides us with the means to ensure that the management systems (environmental protection, employee safety, product quality, social responsibility, labor practices, etc.) are managed correctly and effectively, using internationally standardised methods. It also gives our stakeholders a quick idea of how we manage these programs at the company. Additionally, ISO and other standardisation organisations require a standardised approach, regardless of company size and the laws of the country where operations are carried out. This provides companies with employee safety and happiness, control of environmental impacts, high-quality products, sustainable production in the value chain, high-quality competition, customer satisfaction, etc.

We are in the process of retaking the Ecovadis survey and planning to take SBTI. Participating in the EcoVadis survey is a baseline of the Responsible Chromium initiative of the ICDA (International Chromium Development Association).

For us, Ecovadis was a great tool to understand our gaps more in ‘governance’ of ESG, and since then we have been working with all our related functions to improve the result. This year we are planning on retaking the certification.

Based on the discussions with other stakeholders, the consensus is that CBAM needs to be improved, especially on the technical side. We used the default values for the CBAM for the first reporting period. However, some points need to be clarified in the legislation. In our industry, we create a small amount of emissions even when we have no (or low) production in a facility, in order to safely operate the plant or furnaces. So, since we do a minimal amount of production, the intensity of the GHG emissions in line with CBAM reporting is increasing a lot, which does not reflect the actual GHG emission figures. The calculations are very straightforward, but the legislation has yet to cover the industrial needs and production realities. But in general, CBAM or similar programs are excellent mechanisms for reducing the carbon footprint of a company.

Yes. We have internal data collection tools and GHG emissions reporting mechanisms. We are in the process of adapting our system to meet CBAM’s needs.

I believe CBAM or similar programs will contribute to reducing GHG emissions. We do not have a specific target or program for CBAM because the YILMADEN Sustainability Strategy and its approach/targets already serve CBAM’s needs.

As I followed the news, China has started working on its legislation, an internal version of the EU’s ETS (Emissions Trading System), which underpins CBAM. Türkiye is also doing it. I think we will see similar regulations in the upcoming days.

I fully believe that such legislation and other requirements will help companies implement more sustainable practices and reduce GHG emissions.

The industry leaders are also leading in sustainability and ESG practices. Other small companies follow them as an example. The consumers or the Sustainable Supplier programs of customers (which YILMADEN has also started to implement) will encourage mining companies to go the extra mile on their sustainability journey.

I think CBAM or similar legislation can be a bridge between countries and industries in the sustainability transition. They will provide detailed transparency on actual GHG emissions, awareness in the companies, standardisation in the industries, etc. The taxes will also return to the industries as green funds.

It’s essential to be aware of potential shortcuts in CBAM. For instance, if a metal industry product is sold outside the EU and an end product (such as a washing machine) is sold to Europe, it bypasses CBAM taxes. This could disrupt the traceability of the carbon footprints across the supply chain, delaying the reduction of GHG emissions.

For companies that have already demonstrated a strong commitment to sustainability, CBAM can be a powerful tool. It can facilitate their compliance with the legislation, reinforcing their sustainability efforts. This underscores CBAM’s potential to align with your business goals and enhance your sustainability practices.