Outokumpu includes scrap firms in circular system

Finland-based stainless steel and alloys producer Outokumpu Oyj has introduced what it calls a first-of-its-kind initiative to bring its customers and steel scrap suppliers together to strengthen the circular economy in Europe.

Calling the effort Outokumpu Inner Circle, the metals producer launched the initiative at the World Circular Economy event in Helsinki in June. “The Inner Circle initiative will bring transparency to supply chains and smoothen the path from stainless steel to usable scrap, and from scrap to ever more sustainable stainless steel production—ultimately creating a closed loop for steel scrap,” the firm says.

“Circularity is one crucial element of sustainable stainless steel production,” says Max Menzel, head of sustainability at Outokumpu. “With the Inner Circle initiative, we are bringing our customers and scrap suppliers together to ensure an efficient, transparent and sustainable supply chain for steel scrap. Ultimately, our vision is to create a visible closed loop for steel – a unique example of circular economy in action.”

Outokumpu says it will draw upon existing, efficient supply chains so scrap generated by its stainless steel-buying customers can more quickly return to Outokumpu melt shops. “Transparency and environmental, social and governance conformity throughout the supply chain will be ensured by verifying all partners within this initiative," it adds.

Such closed-loop systems are not always received with enthusiasm by scrap processors, who may fear a loss of control over when and how they buy, sell and price scrap materials.

Outokumpu says it sees as its role to steer the initiative and create networks between customers and verified scrap suppliers.

“The scrap suppliers’ role is to ensure a sustainable supply chain by providing scrap from the network’s partners and to distribute the scrap sustainably," the firm says. "Customers who join the program will bring their scrap back into the cycle after processing the material or by the end of the product’s life cycle via the scrap suppliers.”

The metals producer says initial partners will be able to provide input to the creation and development of the network.

“Together we will show strong initiative and leadership by spearheading the move towards a more circular and a closed-loop economy," Menzel says. "Our partners can join this unique and open initiative, which is the first in the industry, and demonstrate their leadership and contribution to the circular economy.

“Outokumpu Inner Circle is an open initiative where we would like to welcome all scrap suppliers and stainless steel consumers from Europe to participate. We are now entering the first phase of this initiative and I’m happy to announce Cronimet as the first scrap supplier partner joining us. At this stage, our focus is on creating the practices and learning about the cooperation. There’s been a lot of interest already, showing that there really is an industrywide need for this kind of an initiative.”

Nico Krueger, Cronimet’s commercial director, says, “The Inner Circle initiative builds on the ideas of fairness, openness and the pursuit of long-term partnerships and therefore fits perfectly with our corporate values. At the same time, we are convinced that this is the right approach to achieving sustainability and business success in the circular economy.”

Outokumpu says a circular economy is at the heart of its sustainability approach, pointing to a recycled material content rate of 94 percent.

“We believe the world does not need more things—but things that last, and when a product is at the end of its life cycle it should be brought back to life by becoming raw material for something new,” says Juha Erkkilä, vice president of sustainability at Outokumpu. “The more we use scrap, the lower our emissions are. We would like to enable our customers and partners to actively participate by joining this initiative.”