Intending to reduce carbon footprint Mercedes-Benz AG has resolved to use green steel in vehicles in 2025.
The company is the first car manufacturer to take an equity stake in Swedish start-up H2 Green Steel (H2GS) to introduce CO2-free steel into series production. Together with its steel suppliers, the company is retooling its supply chain. It will help the OEM to focus on the prevention and reduction of CO2 emissions rather than compensation.
The partnership with HSGS is another step towards CO2 neutrality, which Mercedes-Benz is pursuing as part of Ambition 2039, its goal to achieve a fully connected and CO2 neutral vehicle fleet in 2039. It will be 11 years earlier than the EU legislation requires.
Typically, a Mercedes‑Benz sedan is made from about 50% steel, accounting for about 30% of CO2 emissions in production. With the partnership, Mercedes-Benz is actively and consistently tackling one of the biggest challenges in the automotive industry on the road to CO2 neutrality.
Manufacturing technology to contain CO2 emissions
Using a new, innovative manufacturing process, the production of steel at the supplier level is CO2 free. By contrast, steel produced using a classic blast furnace emits an average of more than two tons of CO2 per tonne. In the new process, the supplier uses hydrogen and electricity from 100% renewable energy sources instead of coking coal in steel production. The hydrogen serves as a reduction gas, which releases and binds the oxygen from the iron ore. Unlike the use of coking coal, this does not produce CO2, but water. The supplier uses electricity from 100% renewable sources for the energy requirements generated in the manufacturing process.
CO2 neutral Mercedes-Benz supply chain
Mercedes-Benz AG pursues the goal of a CO2 neutral new car fleet along with the entire value and supply chain. Suppliers representing more than 85% of Mercedes-Benz's annual purchasing volume have already signed an Ambition Letter, agreeing to supply the company only with CO2 neutral products in the future. This includes essential steel suppliers. At the same time, Mercedes-Benz is working with its partners to gradually increase the proportion of secondary materials in components and materials.
Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG responsible for Daimler Group Research and Mercedes-Benz Cars COO, said, 'With an equity stake in H2 Green Steel, Mercedes-Benz is sending an important signal to accelerate change in the steel industry and increase the availability of carbon-free steel. As a first step, we are investing a single-digit million amount. As a preferred partner of the start-up, we will be launching green steel in various vehicle models as early as 2025.'