Automotive manufacturer Mercedes-Benz announced today a new goal to source over 200,000 tonnes of CO2-reduced steel from European suppliers annually by 2030, forming part of the company’s efforts to decarbonize its new vehicle fleet.

The automaker will buy the steel from suppliers including Salzgitter, thyssenkrupp Steel, voestalpine, Arvedi, SSAB, and H2 Green Steel. It has existing partnerships with Salzgitter Flachstahl GmbH and Arvedi to source CO2-reduced steel, with Salzgitter using electric arc furnace processes to produce steel from scrap, reducing CO2 emissions by more than 60% compared to the traditional blast furnace method.

In 2021, the automaker became the first passenger car manufacturer to receive steel from SSAB’s direct reduction process that uses 100% hydrogen, and purchased equity in Swedish start-up H2 Green Steel (H2GS). Earlier this year, the company signed agreements with H2 Green Steel to supply low-carbon steel for use in vehicles in Europe.

Dr. Gunnar Güthenke, Head of Procurement & Supplier Quality Mercedes-Benz Cars, said:

“To make the automotive industry more sustainable, Mercedes-Benz and its partners are working to decarbonise the steel supply chain. The increased availability of green steel enables us to gradually introduce CO₂ reduced steel and in a second step to use almost CO₂ free steel in our vehicles, significantly helping to lower our carbon footprint.”

According to the Mercedes-Benz, the company’s low carbon steel supply agreements represent a milestone towards its achievement of its “Ambition 2039” strategy, which includes goals to at least halve lifecycle CO2 emissions per passenger car in its new vehicle fleet by 2030, and to offer a carbon neutral new car fleet before the end of next decade.

In 2021, the automaker announced plans to electrify its automotive fleet, including a goal to go all-electric by 2030. EV production tends to be significantly more carbon intensive relative to that of a conventional combustion engine vehicle, and steel accounts for up to 20% of the total CO2 emissions in the production of an electric vehicle.

Mercedes-Benz stated earlier this year that it is pursuing a goal to achieve a green steel supply chain from 2039 at the latest. Alongside today’s announcement, the company said that the rollout of a sustainable steel supply chain in Europe will serve as a blueprint for other regions.

Markus Schäfer, Member of the Board of Management of Mercedes-Benz Group AG, Chief Technology Officer, responsible for Development and Procurement

“The more than 200,000 tonnes of CO₂-reduced steel per annum for the supply of our production facilities in Europe mark a considerable milestone for our ambitious sustainability goals. Together with its partners, Mercedes-Benz will continue to pave the way towards a net carbon-neutral new car fleet by 2039. At the same time, we are sending an important signal for the transformation of the European steel industry.”