Today, manufacturers worldwide are being asked to convert their aggressive ESG (environment, social, governance) commitments to tangible execution. Although the shotgun start for the race to zero is now an almost decade’s old echo, the international fervor––largely led by Europe—is nonetheless strong to reduce CO2 from the atmosphere with the aim of lowering the earth’s temperature.

Rest assured, whatever decision-making and road-mapping that’s happening in the C-suite today is very likely going to show up soon on newly-tightened supply chain parameters handed down to the purchasing department. 

But castings pose a purchasing conundrum––there’s only so much CO2 you can drive out of the foundry process … or is there? One foundry, AFS Corporate Member Metal Technologies Inc. (MTI), has crossed a major mile-marker by announcing its ability to produce North America’s first carbon neutral castings.

In 2023, the gray and ductile iron foundry headquartered in Auburn, Indiana, rolled out a trademarked product called Environ that offers customers a casting acquisition alternative that certifiably addresses millions of pounds of carbon from the production process. Having invested over $125 million in sustainable capacity expansion, MTI achieves carbon neutral emissions chiefly through electric induction melting, which reduces emissions by 75%–90% compared to cupola melting. In fact, this significant benefit is passed along to all MTI customers. But for those seeking carbon neutrality for the purpose of corporate ESG commitments, the foundry adds to its proprietary protocols two final steps that take Environ-made castings across the finish line. As a result, MTI can provide customers with an easy solution to traditionally carbon-intensive raw materials (e.g. iron castings) in their end products.

“We’ve optimized processes across all four of our iron facilities, so we start from a very small carbon footprint,” said CEO Matt Fetter. “And we’re able to apply our low carbon-intensity to everything––we don’t change the casting process for Environ. Part of that is changing who we buy electricity from when we need it to be carbon neutral. Ultimately, the difference between MTI versus other foundries, is starting from a small carbon footprint through focusing on efficiency at every step.”

Being sensitive to ‘greenwashing’ concerns, he said, “In the end, we are a foundry, so we’re using energy to make castings––we have emissions. We start by driving that carbon footprint as small as possible, and then use our Environ process to offset the rest. We feel confident that the product we’re making is the lowest carbon footprint casting you could possibly produce.”

Early in the formation of the Environ product, MTI recognized that words can be cheap, and claims of achieving North America’s first carbon-neutral castings could be doubted if made solely from its own proverbial microphone. To ensure credibility and objectivity, the company engaged the services of Green Diamond, a third-party sustainability consulting firm that combed through all MTI casting facilities––Auburn, Indiana; Ravenna and Three Rivers, Michigan; and San Luis Potosi, Mexico––mapping their carbon footprint and identifying the many variables that contribute to carbon emissions. To provide additional customer assurance, MTI then engaged an independent third party to verify their carbon claims according to ISO standard 14064-3:2019 “Greenhouse gases – Specification with guidance for the verification and validation of greenhouse gas statements.”

As a result, MTI has a formula with which to estimate the carbon footprint of every job and then optimizes its processes from there. It is Green Diamond’s extensive research, documentation, and additional third-party auditing that assures MTI’s Environ product is, in fact, able to achieve carbon-neutral iron castings at any volume. And because its four foundries all are process calibrated and have access to green energy through MTI’s electricity providers, Environ is available at each location. An additional outcome: In keeping with commitments it has made to the U.S. Department of Energy, MTI is ISO 14001 certified.

“There’s been a lot of administrative work to get where we are,” said Fetter. “And while it might sound easy to dismiss, there’s no one else doing it. For other people to do what we’ve done, it would be significantly more expensive. We can do it with little impact to the cost of a casting. We can compete with non-carbon-neutral castings at nearly the same price. Other companies haven’t done all this work. They don’t have access to competitively-priced, carbon-free electricity, and they haven’t optimized their process.

The Pioneer Project

The premier casting that showcased MTI’s capabilities was a ductile iron bracket for a commercial vehicle engine. It was cast in England and shipped to the U.S., where MTI machined it and sent it to the OEM. The casting had been made using cupola melting, which, based on data from Aachen University and governmental reports, creates 75% more CO2 emissions than electric melting. 

“That first Environ job was a no brainer, because we were getting rid of cupola melting, and we were getting rid of all the transportation emissions from England to the U.S.,” said Fetter. “And then we optimized it internally as well as externally with carbon-free energy and renewable energy credits. That’s what got us into it. We saw the regulations and disclosure requirements coming down the pike. 

“So, all these companies are going through a massive transformation and wondering, ‘What are we going to do?’ he continued. “What’s happening in the U.S. is that you’ve got a lot of the overseas, publicly-traded OEMs from Germany and Japan, for example––commercial vehicle, automotive, hydraulics, and other markets––and they’re being driven by their government regulations and then by their own ESG goals. They’re now extrapolating that to the U.S. and other markets, even though we’re not under the same requirements yet.”

Since that first Environ casting, the OEM customer has expanded all its castings to be produced as Environ-made parts, whether purchased directly from MTI or through the OEM’s suppliers. MTI has also recently signed a contract for a multi-million-piece automotive project and, on the hydraulics side, lower-volume jobs across many part numbers have been converted to Environ. 
“We believe it’s really going to grow exponentially,” said Fetter. It’s being driven by regulatory ESG goals for these companies, and, like we saw with the casting from England, we’re seeing a lot of reshoring occurring, whether from England, Europe, or Asia, to bring things to North America to reduce the carbon footprint involved with freight. That’s not part of Environ, but it’s another consideration that’s driving people to look at their carbon footprint. When they want to reshore castings, they’re going to save on the freight, all the related logistical carbon factors (and cost drivers) such as the diesel fuel––all the wasted movement. We say, why not look at going completely carbon neutral on the casting altogether?”

Governmental Game On

Manufacturing faces more than peer pressure today. Governments around the world, as well as federal agencies, state lawmakers, and industry standards organizations have carved out positions and objectives around carbon emissions reduction, and wherever individuals stand personally, manufacturing corporations––and then smaller suppliers––are going to be held accountable to verify their emissions footprints. Some new lines in the sand have even been drawn fairly recently.

According to an article by University of Florida News, “After two years of intense public debate, the U.S. Securities and Exchange Commission approved the nation’s first national climate disclosure rules on March 6, 2024, setting out requirements for publicly listed companies to report their climate-related risks and in some cases their greenhouse gas emissions.” A legal challenge was filed in the Eighth Circuit Court of Appeals, and the SEC stayed the rule pending the legal challenge.

Likewise, in an article contributed to “Foundry Planet” last November, authors Dr. Marco Rische, Wolfgang Baumgart, Sebastian Haardt, Stefan Schmitt wrote, “The pressure from environmental policy requirements to achieve the climate targets set for industrial consumers is constantly increasing … All companies surveyed in a study by Römheld & Moelle stated they would ask their suppliers for climate-neutral castings by 2050 at the latest, with 21% planning to do so by 2025 and 46% by 2030.”
In California last October, Gov. Gavin Newsom signed the Climate Corporate Data Accountability Act into law, which would obligate U.S. companies with annual revenues of $1 billion or more that do business in California to report both their direct and indirect supply-chain-related greenhouse gas emissions starting in 2026 and 2027. A coalition of business groups have challenged the controversial act. In Germany, where Fetter says cupola melting may soon be banned, the Climate Protection Plan 2050 puts forth goals to cut emissions 80%–90% from 1990 levels by 2050.

With the regulatory stage set and expanding for supply chain sustainability reporting, a new chasm is emerging within the corporate infrastructure of some manufacturing firms, according to Dan Plant, director of environmental engineering at MTI. 
“There’s some difficulty bridging the gap between a CEO’s or a board’s commitment to being carbon neutral and the purchasers who must meet the goal at the buying level,” he said. “What we’ve seen is that it’s now requiring the purchasing group to have some accountability for a carbon reduction. These high-level goals and commitments of CEOs end up filtering down into the tactical goals of a purchasing group or a divisional president or a plant manager––someone who’s having an influence on the casting decision. We developed Environ in part to provide an easy win for purchasing agents in charge of their company’s casting purchases.”

MTI Vice President of Sales Pat Frederick added that customer interest in Environ is rapidly multiplying, in part for that reason. Currently, MTI has 75 Environ parts programs on the books. As of April, the foundry has produced 59 Environ carbon-neutral part numbers and 2.1 million castings; by contrast, he estimates these parts would have generated over 24 million lbs. of CO2 emissions had they been produced using cupola melting. The breakdown is as follows:

• Commercial vehicle manufacturers––nine part numbers in production, approximately 105,000 pieces per year.
• A hydraulics OEM––48 part numbers up through this July, approximately 900,000 pieces per year.
• A passenger vehicle part supplier––two part numbers, approximately 1.1 million pieces per year.

“Besides the work on the front end creating the Environ product, we are working with our customers to bring their ESG, their purchasing areas, and their engineering areas all together,” said Frederick. “They have these big goals, but they don’t have a tactical plan on how to achieve them. So, we provide the solution to make it work for them.”

ESG personnel have been astonished at Environ’s potential impact, Fetter noted. And the interest is multiplying. 
“Some might view us as rustbelt and heavy energy users,” said Fetter. “The interesting part is once they know we have this solution, that’s when they begin really looking at it and thinking how they can apply it.  

“I’m not trying to make light of it, but converting from incandescent to LED bulbs or using electric forklifts––there’s a little bit of savings but not enough to move the needle on a customer’s big ESG objectives. We are talking about billions of pounds of reduced CO2 in the United States just by going to electric melt and then the next step of creating a carbon neutral casting. 
“We’ve chosen to differentiate ourselves to solve a problem that our customers are needing to solve,” he added. “We’ve invested in the best environmental controls and minimized energy waste; we’re optimizing our kilowatt hours per ton melted, reducing any waste in usage of natural gas and electricity; and we’re innovating advanced gating systems to improve yield and reduce scrap, which is an energy saver. We’re optimizing our productivity so we’re producing more castings with less waste and less energy. It’s an interesting time in our industry––in fact, I would call it an inflection point.”