20 ENERGY EFFICIENCY AND CLIMATE CHANGE MITIGATION CMC understands that being more energy efficient results in fewer greenhouse gas (carbon) emissions and leads to less of an impact on climate change. At CMC, we continue to lead the industry by exclusively using state-of-the-art electric arc furnaces (EAFs). 100 percent of our raw steel is produced in EAFs; we do not produce any steel using blast furnace technology. EAFs consume less energy than traditional blast furnaces, which results in much lower energy consumption than the global industry average. Efficiency in our operation also reduces our carbon (CO2 e) emissions. Because we use scrap steel as a primary raw material, we conserve resources and reduce carbon emissions compared to operations that use natural resources from mined iron ore. The chart below shows CMC’s carbon intensity per ton of Raw Steel Production. When reporting our carbon emissions, we report Direct (Scope 1) emissions to reflect the emission sources that we can more directly control. Our Scope 1 emissions include carbon dioxide (CO2 ), methane (CH4 ) and nitrous oxide (N2 O). At CMC, we are committed to reducing emissions across our organization. Through our corporate energy efficiency program, we allocated $500,000 in 2016 to energy efficiency projects. These included replacing inefficient lights with LEDs or fluorescents, additional energy metering to quantify consumption in each area of our facilities, and studies to identify opportunities to improve the efficiency of our compressed air systems. Our projects not only reduce our impact on the environment, but also reduce our operating costs and are good for the long-term sustainability of our business. Best Available Techniques in Poland Our operations in Poland have achieved BAT (Best Available Techniques) compliance since 2015. Being compliant to this European Commission environmental emissions standard was made possible by applying various leading initiatives in many areas of our operations. BAT compliance is not yet required by law but will become mandatory in 2018. CMC is currently the only steel manufacturer compliant with BAT in Poland. Better Buildings, Better Plants Since 2012, CMC has participated in the U.S. Department of Energy’s Better Buildings, Better Plants Program. This national effort focuses on driving significant improvements Energy Intensity (GJ/Ton) Required to Produce CMC Products (2014, 2015, 2016) vs. Global Industry Average Products (2016) 3.30 3.30 3.29 2014 CMC 2015 CMC 2016 CMC INDUSTRY AVERAGE (as reported by Worldsteel Association) 20.0 2014 Lifecycle CO2 (CO2 tonnes/tonne steel) Greenhouse Gas Emissions 0.79 CMC U.S. MILLS WORLD STEEL INDUSTRY AVERAGE 1.90 Lifecycle analysis is valid for 5 years and our 2014 number is still applicable At CMC, we continue to lead the industry by exclusively using state-of- the-art electric arc furnaces (EAFs)