Thursday, 21 October 2021
German auto company BMW Group has signalled their intentions to start sourcing sustainably produced steel from 2025, with claims of up to 95% reduction of lifecycle CO2 emissions.
The counterparty to the agreement, Swedish start-up H2 Green Steel, will use green hydrogen to manufacture sustainable steel products. The green hydrogen itself will be produced using electrolysers and local electricity generation from wind turbines.
The collaboration will also see H2 Green Steel taking back steel waste from the BMW Group for recycling, furthering closed-loop activities and sustainable operations.
“Our goal is to reduce CO2 emissions in our steel supply chain by about two million tonnes by 2030, and sourcing steel produced using hydrogen and green power can make a vital contribution to this,” said BMW Group’s board member responsible for the purchasing and supplier network, Dr Andreas Wendt.
“Steel is essential for producing cars and will be no less important for future vehicle generations. Innovative technologies that enable virtually carbon-free production of steel have a significant impact on our ability to reduce CO2 emissions in our steel supply chain.”
The deal aligns well with the BMW group's recent update to its climate goals, including halving the emissions generated by its vehicles by 2030 (using a 2019 baseline) as well as a target of 50% recycled and reused materials by 2030 (was previously set at 30%).
The steelmaking process has traditionally been carbon-intensive, accounting for 7% of global annual emissions, and while energy usage can be made more sustainable via renewable electricity sources, process emissions (that is, carbon dioxide from non-energy usage) had proven difficult to eliminate.
Green hydrogen is seen as the way forward here, with sustainable gas replacing traditional feed materials such as charcoal and coke and eliminating the associated CO2 emissions.
While the numbers behind the above deal between BMW Group and H2 Green Steel had not been disclosed, Greenfact reported earlier this year that the H2GS venture itself had targeted an overall throughput of five million tonnes of emission-free steel per year by 2030.
Although steel from green hydrogen is not yet commonplace, another Swedish steelmaker SSAB produced the world's first custom delivery of such steel via its HYBRIT (above) venture in August this year.
On the demand end of the steel value chain, organisations like the Climate Group have been mobilising corporations under its SteelZero initiative to pledge towards "procuring, specifying, stocking and/or producing 100% net-zero steel across all operations by 2050 at the latest" with the hopes of driving market demand for net-zero steel.
“We need to see much greater investment and progress to cutting emissions, but steelmakers also need to know their customers will buy new, cleaner products,” said The Climate Group’s Head of Energy Productivity Initiatives Jenny Chu.
“By harnessing the collective purchasing power and influence of major steel-using organisations, SteelZero will send a critical demand signal that can shift global markets and policies towards sustainable production and sourcing of steel.”