Key air emissions

Reducing air emissions is one of EVRAZ main environmental objectives.

The key air emissions primarily consist of nitrogen oxides (NOx), sulphur oxides (SOx), dustand volatile organic compounds.

Even before 2011, the Group had made significant progress in reducing air emissions.Today, its air emissions reduction strategy includes plans to modernise gas treatmentsystems, implement modern technologies and withdraw obsolete equipment.Nevertheless, in 2015, key air emissions increased by 9.9 thousand tonnes (or 8%) compared with 2014. The main drivers of the rise are an increase in sulphur content in the coal and ore used at EVRAZ ZSMK’s power and sinter plants, which has resulted in higher SOx emissions, and higher NOx emissions at EVRAZ KGOK due to increase of production.

Taking into account the management’s decision to re-base the target by excluding data related to divested assets (EVRAZ VGOK, EVRAZ Vitkovice Steel, Evrazruda’s Krasnoyarsk mines, ZSMK’s central power plant, EVRAZ Highveld and EVRAZ NTMK’s Nizhnesaldinskymetal mill), key air emissions have increased by 19.2% since 2011.

Greenhouse gas emissions

EVRAZ operations are also associated with emissions of carbon dioxide and other greenhouse gases.

The Group recognises the importance of seeking to prevent climate change and supports the global effort to reduce greenhouse gas (“GHG”) emissions into the atmosphere. In accordance with the requirements of the Companies Act 2006 (Strategic and Directors’ Report) Regulations in 2013, EVRAZ has undertaken to assess full GHG emissions from facilities under its control. Since 2011, it participates in the CDP Climate Change Programme.

The assessment covered direct (Scope 1) emissions of all seven “Kyoto” GHGs and indirect (Scope 2) emissions from the use of electricity and heat. The inventory approach was based on the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (IPCC 2006) and WRI/WBCSD GHG Protocol Corporate Accounting and Reporting Standard. The Group provides data in tonnes of carbon dioxide (CO2) equivalent (tCO2e), calculated using IPCC 2006 global warming potentials.

GHG emissions data was collected for 2015 and compared with the 2014 and also 2013 levels, which were established as a baseline. The Steel segment is still responsible for more than half of gross greenhouse gas emissions from operations, while almost 93% of full emissions from the Coal segment are due to fugitive methane leakage, caused by methane ventilation from underground mines and post-mining emissions from coal.

In 2015, the Group’s overall greenhouse gas (GHG) emissions decreased by 8.4% year-onyear. Emissions of CO2 fell by 6%, due to low operational activity at EVRAZ Highveld Steel and Vanadium and a reduction of coking coal consumption at EVRAZ ZSMK amid greater use of pulverised coal injection technology. In the coal segment, CH4 emissions dropped by 3% due to a lower methane content in the coal mined and a decrease in coal production at some mines.

Overall, these factors enabled EVRAZ to reduce its Scope 1 emissions by 6%. The Group’s Scope 2 emissions decreased by c.22%, due to EVRAZ Highveld Steel and Vanadium’s low activity (which accounted for c. 15%) and lower volumes of energy purchased by EVRAZ NTMK and EVRAZ ZSMK in 2015.

EVRAZ reports an intensity ratio relating its annual GHG emissions to its activities: total Scope 1 and 2 emissions per consolidated revenue for the Group overall and each operating segment (see graphs) according to the divisional structure. In addition, specific emissions in the Steel segment per tonne of steel products for 2013-15 are compared with average specific emissions of World Steel Association members for 2014. Higher specific GHG emissions in the Steel segment may be due to the key role that integrated iron and steel works (which inherently emit more GHGs than rolling mills) play in EVRAZ steel production.

Water consumption and water discharge

The Group’s objective is to use water resources efficiently and prevent any negative impacts on water quality through environmental incidents.

In 2015, almost 84% of EVRAZ total water intake was from surface sources, including rivers,lakes and reservoirs, versus 76% in 2014.

In 2015, EVRAZ enterprises continued to implement programmes to improve water managementperformance. The environmental benefit of these is expected to be seen after 2016.

In 2015, fresh water consumption increased by 8.1 million cubic metres (2.4%) compared with2014. The main driver of the rise in 2015 was EVRAZ ZSMK’s Heat and Power Plant, which increased its water intake due to greater energy production (+60.4 million kW) and the need for more cooling water. Given the HSE Committee’s decision to re-base the target by excluding data related to disposed assets, fresh water consumption decreased by 67.2 million cubic metres (14.9%) compared with the 2011 adjusted baseline. Water discharge decreased by 77.2 millioncubic metres over 2012–15.

Water pumped from mines (dewatering) is not included in the fresh water consumption target, although pumped water is partly used for technological needs. In 2015, 20.5 million cubic metres of mine water were pumped out and used, compared with 44.7 million cubic metres in 2014.