The BMW Group continues to invest in climate protection and methodically pursue the goal of reducing CO2 emissions at source in the supply chain.
Starting in 2025, the company plans to stock up on steel produced by reducing CO2 emissions by up to 95% and without using fossil resources such as coal. The BMW Group recently reached an agreement with the Swedish startup H2 Green Steel, which uses hydrogen and green energy from renewable sources to produce steel. Due to its energy-intensive manufacturing process, steelmaking is considered to be a major source of CO2 emissions globally.
“Our goal is to reduce CO2 emissions from the steel supply chain by approximately two million tons by 2030. Sourcing steel produced using hydrogen and green energy can make a vital contribution to achieving this goal”, said Dr. Andreas Wendt, member of the board of directors of BMW AG responsible for purchasing and the supplier network. “Steel is essential for automobile production and will be no less important for future vehicle generations. Innovative technologies that make it possible to produce potentially carbon-free steel have a significant impact on our ability to reduce CO2 emissions in our steel supply chain ”.
Closed cycle of materials
In addition to the supply of steel produced using green energy, the BMW Group and H2 Green Steel have agreed on the creation of a closed material cycle. H2 Green Steel will collect sheet metal remnants, such as those produced in pressing plants during door punching, and process them in such a way that they can be sent back to the plants in the form of new steel coils, also called coils. In this way, the raw materials are used several times in un circular economy by safeguarding natural resources. Given the lower amount of energy for production, recycled steel lowers CO2 emissions by about 50-80% compared to the primary material.
The BMW Group already uses between 20% and 100% recycled steel in its vehicles and will continue to increase this percentage in the future. The BMW Group’s pressing plants in Europe process more than half a million tonnes of steel per year.
Ideal location in the north of Sweden
H2 Green Steel is building its steel production site in the Norrbotten province of northern Sweden near the Arctic Circle. The region is famous for its reindeer and spectacular Northern Lights, but it also offers access to high-quality iron ore, abundant energy from renewable sources such as hydro and wind, a major seaport, and generations of know- how in steel production.
Unlike conventional processes that use coke to make steel, the company uses green energy produced hydrogen to remove oxygen from iron oxide. This direct reduction of iron ore produces almost zero CO2, just water – thus avoiding 95% of the CO2 emissions normally produced. The purpose-built hydrogen power plant, which uses water and green energy from across the region, will be integrated directly into the steel production plant. The company also uses green energy for the rest of the manufacturing process.