H2 Green Steel announced that the Swedish company signed an agreement with German automaker BMW Group for the supply of green steel as part of several measures agreed between the parties for BMW to meet its carbon reduction targets.

Energy transition is underpinned by the global drive towards net-zero carbon emission targets to curb anthropogenic climate change. While construction is the main demand driver of steel, the automotive sector plays an important part in the outlook for steel. Steel production alone accounts for a significant proportion of global carbon emissions, estimated at above 7%. 

In order for net-zero targets to be met, the carbon footprint needs to be addressed throughout a product’s supply chain. While the automotive sector’s headline is in the switch to electric vehicles, reducing its carbon footprint also requires changes in the grid energy supply and parts supply chains to truly become carbon neutral – or as close to it as possible.

In July, H2 Green Steel began constructing its 5Mtpy green steel plant in Boden. The plant is planned to produce captive green hydrogen needed to qualify its steel production as “green”. The agreement with BMW addresses the automaker’s scope 3 emissions, including building circular recycling of 40% of the pre-consumer steel scrap to be returned to H2 Green Steel for scrap recycling volumes.