Biden faces more pressure to block U.S. Steel merger
WASHINGTON — President Joe Biden is facing new pressure to block Nippon Steel’s acquisition of the iconic manufacturer U.S. Steel, this time from environmental groups that say the tie-up would set back America’s efforts to curb climate change.
In interviews, environmental activists working to reduce greenhouse gas emissions say the merger would bring together two steel giants that are laggards on transitioning away from fossil fuels.
Researchers at Industrious Labs, a nonprofit pushing to decarbonize steel and other heavy industries, drew on both companies’ public disclosures to calculate that Nippon and U.S. Steel are relatively high emitters of heat-trapping gases from steel production. Both companies rely heavily on coal-powered blast furnaces and are on a slower path to transition to cleaner fuels than some international competitors. Three U.S. Steel facilities — in Pennsylvania, Indiana and Illinois — combine to emit more greenhouse gases in a year than a comparable number of coal-fired power plants, the researchers estimate.
Officials from Nippon and U.S. Steel say they are pursuing multiple strategies to decarbonize by 2050, including high-grade steel production in more efficient electric-powered furnaces and using hydrogen-injecting technology in blast furnaces, and that their merger will advance those efforts.
In a joint statement Thursday, the companies said the deal would “create a stronger, more competitive global company” and that Nippon and U.S. Steel “recognize that solving sustainability challenges is a fundamental pillar of a steelmaker’s existence and growth.”
Concerns about the climate implications of the deal add to growing political backlash over the proposed takeover. A bipartisan group of senators, including Josh Hawley, R-Mo.; Marco Rubio, R-Fla.; Sherrod Brown, D-Ohio; and Bob Casey, D-Pa., has urged the administration to scrutinize and stop the takeover.
The lawmakers cite potential damage to American workers and to the nation’s defense industrial base if Nippon were to close some of U.S. Steel’s American plants. The company says it has no plans to do so.
The United Steelworkers Union has also objected, fearing job losses; Nippon officials have said they will honor existing labor agreements.
Former President Donald Trump, the likely Republican presidential nominee, told reporters last month that he would block the sale “instantaneously” if he were in office.
White House officials have indicated the administration is reviewing the acquisition, a process that could allow Biden to block the deal.
Lael Brainard, who heads Biden’s National Economic Council, suggested in a written statement shortly after the deal was announced that the merger would probably be scrutinized by the Committee on Foreign Investment in the United States, which is known as CFIUS and headed by the Treasury secretary.
Administration officials have refused to confirm a review is underway.
“CFIUS is committed to taking all necessary actions within its authority to safeguard U.S. national security,” Megan Apper, a Treasury spokesperson, said this week. “Consistent with law and practice, CFIUS does not publicly comment on transactions that it may or may not be reviewing.”
Environmental groups say the agreement could hinder that energy transition. If the deal is allowed to go forward, those groups say, it could keep emissions much higher at U.S. Steel’s coal-powered plants than they would be if the company were sold to a different buyer — one that is more committed to electrification and other advanced emissions-reducing technologies.
Nippon and U.S. Steel are aiming to effectively stop releasing heat-trapping assets into the atmosphere by 2050, a goal known as “net zero,” largely by relying on technologies they have not yet developed or scaled. Environmental groups have pushed for more ambitious and concrete action.