BMW Group furthers green push through use of low-carbon steel in European plants

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The BMW Group is among the most aggressive automotive brands to push for carbon neutrality within its organizations. That said, it’s no surprise that the conglomerate is taking yet another step toward reaching its goals.

KEY TAKEAWAYS

  • What is low-carbon steel?

    According to the BMW Group, low-carbon steel is steel produced using natural gas or hydrogen and green power instead of fossil resources like coal.
  • Where will the BMW Group source its low-carbon steel?

    The conglomerate has struck deals with two suppliers: H2 Green Steel and Salzgitter AG.
  • When will the BMW Group implement the use of low-carbon steel?

    The BMW Group said that the steel sourced from H2 Green Steel will be used in European plants from 2025 while the steel sourced from Salzgitter AG will be used from 2026 onwards.
  • It will be using steel produced using natural gas or hydrogen and green power — instead of fossil resources like coal — at BMW Group’s European plants. The aim, said the group, is to use low-carbon steel to meet over 40 percent of demand at its European plants by 2030, thereby reducing its CO2 emissions by up to 400,000 tons per year.

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    “This is an important step in substantially reducing CO2 emissions at source in the supplier network. Our aim is to reduce vehicles’ lifecycle carbon footprint with a holistic approach. With steel, in particular, we are leading the way by sourcing low-carbon steel for our plants in Europe in the future,” said BMW AG Board Member Joachim Post.

    With this move, the BMW Group is expanding its sourcing of low-carbon steel to two suppliers: H2 Green Steel and Salzgitter AG. Swedish startup H2 Green Steel will supply steel produced exclusively using hydrogen and green power from renewable energies from 2025 onwards.

    On the other hand, Salzgitter AG, one of Germany’s largest steel manufacturers, will replace the coal powering its blast-furnaces with green hydrogen. The BMW Group said that this is made possible by so-called direct reduction plants, which use hydrogen to directly reduce iron ore to iron in the solid state. The solid iron produced in this way is then melted down with steel scrap in an electric arc furnace powered by renewable electricity.

    The steel from Salzgitter AG will be used in standard production of cars at the BMW Group’s European plants from 2026 onwards.

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    “Salzgitter AG is putting ‘circularity’ at the center of its new strategy. We firmly believe that closed loops of recoverable materials can only realize their full effect with strong partners. We are delighted about the circular economy cooperation with the BMW Group and the agreement to supply green steel to our long-standing customer. Partnering for Transformation — this is how we will translate our new corporate vision into practice,” said Salzgitter AG CEO Gunnar Groebler.

    Five years ago, the BMW Group and Salzgitter AG established a closed-loop material cycle for sheet steel waste at the Group’s Leipzig Plant in Germany. Salzgitter AG takes away steel cuttings from the plant, uses this material to produce new steel, and then supplies it back to BMW’s manufacturing plants.

    The sheet steel waste from the BMW Group’s other European plants is also either reused through a direct material cycle or sent back to the steel producer via steel traders and processed into new steel.

    Photos from BMW Group

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