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SUSTAINABILITY – STEEL INDUSTRY

November 2024

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Overview of Commercial Metals Company
Compare Blast Furnaces with Electric Arc Furnaces
EAF Mini Mills and Micro Mills
Sustainability Targets and Challenges
Innovative Technologies
Future Goals

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CMC’s Guiding Principles

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©CMC 2023

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CMC was founded in Dallas in 1915.

Today, CMC is a Fortune 500 company

with over 11,000 employees globally.

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OUR US LOCATIONS

UNITED STATES

167

FACILITIES

RECYCLING
FENCE POST

MILLS
PERFORMANCE STEEL

FABRICATION
CONSTRUCTION SERVICES

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OUR GLOBAL LOCATIONS

EUROPE

17

FACILITIES

FABRICATION

MILLS

RECYCLING

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STAINLESS STEEL

STEEL

LEAD

COPPER

NICKEL ALLOYS

ZINC

ALUMINUM

TIN

BRASS

Recycling

PROCESSING

CAPACITY

4 MILLION TONS

Leading processor of non-ferrous

and ferrous scrap metal.

- 40 metal recycling centers in U.S.

- largest scrap metal recycler in Poland.

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GALVABAR^TM

CHROMX^®

CRYOSTEEL^®

ALL-THREAD

WIRE ROD

MERCHANT BAR

REBAR

Mills

STEEL

CAPACITY

8 MILLION TONS

EAF Mini Mills in the U.S.

EAF Micro Mills in the U.S.

Re-rolling Mill in the U.S.

EAF Mini Mill in Poland.

6

3

1

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POST TENSION CABLE

FENCE POST

PAVING DOWELS

REBAR

Fabrication

FABRICATING

CAPACITY

3 MILLION TONS

Largest concrete reinforcing steel fabricator in the U.S.

Serving customers in commercial construction, infrastructure and

energy sectors.

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TruWEAR^TM

TruSTRENGTH^TM

TruSHIELD^TM

Performance

Steel

Providing strength & protection for

the most demanding applications:

Transportation
Energy
Mining
Military Equipment
Construction Markets

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CONSTRUCTION PRODUCTS

TILT WALL

FORMING AND SHORING

RENTALS

construction services

We maintain one of the largest construction product inventories

in the U.S.

Locations in Texas, Oklahoma and Louisiana.

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Electric Arc Furnaces vs. Blast Furnaces

©CMC 2023

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“Traditional” BOF Steelmaking:

Uses Natural Resources: Iron Ore, limestone and coke
Coal is the primary fuel
Produces more emissions – 1.7 tons of GHG per ton of steel
Globally, 70% of steel is produced using BOFs

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©CMC 2023

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EAF Mini Mill

100% recycled steel
No mining of coal or iron ore
Electricity is our primary �energy source
Produces less emissions – 0.2 tons of GHG per ton of Steel
Globally, 30% of steel is produced using EAFs

For every ton of steel that’s recycled, we conserve the use of 2,500 pounds of iron ore, 1,400 pounds of coal and 120 pounds of limestone.

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©CMC 2023

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70% of Steel produced in the U.S. is EAF Steel

If scrap materials were not recycled, they would end up in landfills across the U.S.

Old cars in Alabama can become new steel products used across the U.S.

The American EAF steel industry empowers families and communities by creating high-wage jobs, building relationships and fueling local economies.

$80K-average total compensation of EAF steelmaking employees.

2M jobs created by the EAF steel industry in America.

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EAF Micro Mill

Continuous connected �melting-casting-rolling �process

conserves energy
eliminates reheat furnace�(saves natural gas)

Scrap-preheating horizontal �charged furnaces

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Micro Mill Environmental Benefits

As Compared to EAF Mini Mill

Scope 1 – Electric Arc Furnace & Reheat Furnace
Scope 2 – Energy consumption
Scope 3 – Raw materials

40%

Less Scope 1

Greenhouse Gas

(GHG) emissions

11%

Less Total

Scope 1 and 2

GHG emissions

86%

Less natural

gas usage

26%

Less overall

energy usage

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©CMC 2023

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650 Millions tons of Steel is recycled globally every year

EAFs produce 75% less CO2 emissions than traditional steelmaking

99% of Co-Products can be recycled:

EAF Dust
Mill Scale
Slag

17 Millions cars recycled annually by the EAF Steel Industry

90% of the water used in steel mills is processed, cleaned and returned to the environment

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CMC Micro Mills

We currently operate three micro mills

Mesa, Arizona (2)
Durant, Oklahoma

Our AZ2 mill will be the first in North America with the capability to connect directly to renewable energy sources like solar and wind.

This cutting-edge technology will improve our energy efficiency delivered from the grid by an estimated 10%

We recently announced a fourth micro mill in the Northeast.

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©CMC 2023

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Sustainability Goals

Targets for 2030, with a 2019 baseline

Increase our renewable energy sage by

12

percentage points

CURRENTLY: 85.9% INCREASE

Increase our renewable

energy usage by

12

percentage

points

CURRENTLY: 4.4% DECREASE

5

%

Reduce our energy

consumption intensity by

CURRENTLY: 1.9% INCREASE

Reduce our water

withdrawal intensity by

8

%

CURRENTLY: 11.9% DECREASE

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Decrease our Scope 1 and 2

GHG emissions intensity by

%

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©CMC 2023

We are committed to continuing our targeted reductions to keep us on track to remain one of the most efficient steel manufacturers. In 2020, we established goals to increase our use of renewable energy and reduce our energy consumption, Greenhouse Gas (“GHG”) emissions and water withdrawal by 2030. As of August 31, 2022, we are ahead of schedule on three of our four goals.

1^st Goal (GHG): We steadily decreased our Scope 1 and 2 GHG emissions intensity by 11.9%. Our mills are continuing to investigate new ways to further improve efficiency in order to reduce emissions intensity

2^nd Goal (Renewable): We attribute our progress to our renewable energy usage at CMC Steel Arizona in Mesa and our expansion of renewable energy usage in Poland. We expect the percentage of our energy from renewable sources to increase as our new supply agreement in Texas goes into effect and we move forward with the construction of our third micro mill

Through strong partnerships with our utility providers and a shared commitment to renewable energy, CMC continued to increase our renewable electricity consumption in 2021. We know that the energy we consume is our largest source of GHG emissions. We are committed to reducing our carbon footprint through our energy management program thus improving operational efficiencies. �

In December 2020, CMC Steel Arizona in Mesa began receiving renewable solar energy from the Saint Solar plant.
Currently, 30% of the electricity consumed at our facilities in Poland is from renewable sources.
A new supply agreement at CMC Steel Texas increased our renewable electricity to 17% in January 2022.
We are currently in discussions with our utility provider at CMC Steel Tennessee to increase their renewable electricity mix.

3^rd Goal (Energy): We have decreased our energy consumption intensity by 4.4%. We are proud of our progress to date and plan to continue reducing our energy consumption to progress toward a more sustainable future.

4^th Goal (Water): In 2021, we experienced a 7.8% increase in water withdrawal intensity as compared to 2019. The primary cause for the increase in 2021 was the commissioning of a new rolling mill in Poland which required the initial filling of water systems and reservoirs without offsetting production, resulting in an increase in the withdrawal intensity at that facility. We expect this to normalize as we ramp up production this year.

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Innovative Technologies:�Decarbonization Strategies

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American Steel Redefined

Hydrogen Hubs

Carbon Capture

Small Modular Reactors

Solar

Biocarbon

Industrial Electrification - EAF

Scrap Optimization and OBMs

Market Green Steel Products

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Alternative energy sources and low carbon fuels

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The most considered alternative has been H2 based on its potential to be produced at scale.

Hydrogen, as a replacement for carbon, can act as a reducing agent as well as an energy source for reheating.

American Steel Redefined

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Hydrogen Hubs�Fostering a New Industry

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Source: U.S. Department of Energy

⯌ Infrastructure Act provides US$8 billion in funding for regional hub development

⯌ Projects for production, processing, delivery, storage, and end-use of hydrogen

⯌ Cleveland-Cliffs, EVRAZ North America U.S. Steel, Nucor and others participating

American Steel Redefined

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CCS is and Essential Part of a Lower Carbon Future

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American Steel Redefined

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Growth of Commercial Scale CCS

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American Steel Redefined

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Source: Global CCS Institute

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CCS Projects Around the World

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Source: Global CCS Institute

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CCS

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Nucor, ExxonMobil in Carbon Capture Agreement

⯌ June 2023: Nucor signs with ExxonMobil for CCS project at Louisiana DRI plant

⯌ Will sequester 800,000 tons of CO₂annually and pipe to underground storage

⯌ Project start-up expected in 2026

⯌ ExxonMobil’s third CC project in past seven months

Louisiana:

Distance from St. James Parish to Vermilion Parish: ~150 miles

Source: Nucor, NuScale

American Steel Redefined

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Electrification of processes

American Steel Redefined

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Decarbonization Strategy:

Electrification will be necessary to replace fossil-fuel driven combustion processes and equipment.

Green electricity from nuclear and renewable sources such as wind, hydro and solar, etc. will need to be sufficiently available and cost effective for baseline and intermittent needs.

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Going Nuclear?

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Nucor Explores Small Modular Reactors (SMR) Technology

⯌ April 2022: Nucor announces US$15 million equity investment in NuScale

⯌ May 2023: MOU signed; exploring site suitability, transmission interconnection capabilities and capital costs

⯌ NuScale goal: 16 power modules in operation globally by 2029. Pressure vessel production to begin this year

NuScale potential customer site

Source: Nucor, NuScale

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Harnessing Solar

EVRAZ Rocky Mountain Steel

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Source: Lightsource bp, Company Reports

⯌ Bighorn Solar started operation in Colorado in 2021

⯌ 300 MW facility 750,000 panels; largest on-site solar facility dedicated to single customer

⯌ Primarily located on 1,899 acres of land owned by Rocky Mountain Steel

Key Numbers

433,720

metric tons of CO2 saved per year

92,100

Fuel-burning cars taken off road (equivalent)

US$285M

Private energy infrastructure investment

American Steel Redefined

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Alternative to Fossil Fuel - Biocarbon

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Steel Dynamics Biocarbon Solutions

⯌ 55/45 JV with biocarbon producer Aymium

⯌ Columbus, Miss., plant start-up scheduled for Q1 2024; US$200M investment

⯌ 228,000 MT capacity; potential to reduce Scope 1 emissions by as much as 35%

Source: SDI, Aymium

American Steel Redefined

Source: Steel Dynamics, Inc.

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Green Steel Arrives

SSAB Americas

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Source: SSAB, Recycling Today

⯌ Already producing SSAB ZERO^TMsteel plate in Iowa with 0.0 ton CO₂emissions per ton steel

⯌ Utilizes carbon-free electricity (wind), scrap and biogas

⯌ 40,000 tonnes delivered to market this year; 100,000 tonnes in 2025

⯌ Also developing fossil-free steel via H₂reduced iron ore, HYBRIT, in Sweden

American Steel Redefined

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Green Steel Arrives

Nucor ECONIQ

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Source: Nucor

⯌ First net-zero carbon steel at scale

⯌ Offers consumers emissions free steel products to help them meet their sustainability goals

⯌ Manufactured using renewable energy to reduces scope 1 emissions and supplemented with the purchase of carbon offsets to reduce scope 2 emissions

⯌ Can be applied to any Nucor product

American Steel Redefined

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Green Steel Arrives

CMC Net Zero Steel

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Source: CMC

⯌ Balances out GHG emissions from production, fabrication and delivery of products through the purchase of renewable energy credits and carbon offsets

⯌ Produced via EAFs that use of 100% net zero carbon electricity

American Steel Redefined

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Electrification of processes

American Steel Redefined

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Decarbonization Strategy:

Electrification will be necessary to replace fossil-fuel driven combustion processes and equipment.

Green electricity from nuclear and renewable sources such as wind, hydro and solar, etc. will need to be sufficiently available and cost effective for baseline and intermittent needs.

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Material and energy efficiency optimization

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Decarbonization Strategy:

Maximizing available raw materials such as scrap, OBMs and lower grade iron for steel production will become paramount as demand increases.

Market pressure will require smart technologies and innovations to optimize the metallization of those raw materials, as well as energy applications and overall manufacturing processes..

American Steel Redefined

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Source: GMK Center

EU Approach

YTD 2023 € 8.7B pledged by EU Governments specifically for steel industry decarbonization
Almost half pledged to one company
CBAM

US Approach

$394B widely available through 2031 to all industries to promote decarbonization (IRA)
Tax credits, pilot programs, incentives
No CBAM

The Carbon Border Adjustment Mechanism (CBAM) is a European Union (EU) regulation that aims to ensure that the price of imported goods reflects the carbon emissions used to produce them.

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Hybrit

Joint venture with SSAB, LKAB ( iron ore producer) and Vattenfall ( energy company) Using HYBRIT® technology, aims to replace coking coal, traditionally needed for ore-based steelmaking, with fossil-free electricity and hydrogen. The result will be the world’s first fossil-free steelmaking technology, with virtually no carbon footprint.

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