Mercedes-Benz has solidified its commitment to sustainability by entering into a supply contract with Swedish start-up H2 Green Steel (H2GS). The agreement entails the delivery of approximately 50,000 tonnes of virtually CO2-free steel annually to support the production of various series models at Mercedes-Benz’s European press plants.
Since 2021, Mercedes-Benz has held a stake in H2 Green Steel, which plans to commence production in 2025, enabling the automotive giant to incorporate virtually CO2-free steel into its series production. The recent announcement also includes a signed letter of intent, outlining the intention to establish a supply chain for green steel produced in North America to cater to local Mercedes-Benz manufacturing plants.
H2 Green Steel stands apart by utilizing hydrogen and electricity derived entirely from renewable energy sources instead of coking coal in its steel production process. This innovative approach ensures a manufacturing process that is nearly CO2-free. In comparison, traditional blast furnace steel production emits over two tons of CO2 per ton of steel. H2GS employs hydrogen as a reducing gas, enabling the release and binding of oxygen from iron ore. Unlike the use of coking coal, this process generates only water vapor, avoiding CO2 emissions. At the start of delivery, H2GS aims for a carbon footprint of 0.4 tonnes of CO2 per tonne of steel.
Markus Schäfer, Member of the Board of Management of Mercedes-Benz Group AG, and Member of the Board of Management for Engineering, Development, and Procurement, emphasized the significance of the supply deal, stating that it accelerates the creation of a decarbonized, regional, and resilient steel supply chain. Mercedes-Benz is committed to establishing a carbon-neutral supply chain by 2039, prioritizing the reduction and avoidance of CO2 emissions rather than relying solely on offsetting methods.
Henrik Henriksson, CEO of H2 Green Steel, expressed his appreciation for the partnership with Mercedes-Benz, highlighting the automotive industry’s push for a faster transition in the steel sector to meet climate targets. The collaboration aims to address supply chain emissions, circularity, and social sustainability. As H2 Green Steel continues to expand operations, Mercedes-Benz serves as a strong partner, not only for European operations but also for venturing into the steel value chain in North America.
H2 Green Steel, founded in 2020, is backed by Vargas Holding, a major shareholder of Swedish battery manufacturer Northvolt. The start-up is headquartered in Stockholm and is currently constructing its first green steel plant in northern Sweden, making significant strides towards transforming the steel industry’s environmental impact.
