Munich. The BMW Group continues to reduce CO2 emissions in its supplier network as part of its ambitious ongoing sustainability activities. Steel produced using natural gas or hydrogen and green power, instead of fossil resources like coal, makes a vital contribution to this. The BMW Group has now signed a corresponding agreement with Salzgitter AG for delivery of low-carbon steel. The steel will be used in standard production of cars at the BMW Group’s European plants from 2026 onwards.
“This is an important step in substantially reducing CO2 emissions at source in the supplier network,” said Joachim Post, member of the Board of Management of BMW AG responsible for Purchasing and 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.”
The BMW Group signed an agreement with Swedish startup H2 Green Steel in October of last year. H2 Green Steel will supply the BMW Group’s European plants with steel produced exclusively using hydrogen and green power from renewable energies from 2025 onwards. This process will reduce CO2 emissions by around 95%.
Together, the two agreements will supply over 40% of the steel required by the company’s European plants and save around 400,000 tonnes of CO2 emissions per year.
Due to its energy-intensive manufacturing process, steel production generates high CO2 emissions. However, because of its versatility, steel is one of the most important materials for car production and will continue to account for a large proportion of the body and many components.
To lower CO2 emissions from steel production to around 5% of what they originally were, Salzgitter AG is gradually switching to virtually carbon-free production. Electricity from renewable sources and its use in production of hydrogen from electrolysis are key elements of the transformation. This green hydrogen will replace the coal currently used in the conventional blast-furnace process. 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.
Up to a quarter of the steel in BMW Group vehicles already comes from recycling loops. The BMW Group plans to increase its percentage of secondary steel in stages, reaching up to 50% by 2030.
The Group established a closed-loop material cycle for sheet steel waste from BMW Group Plant Leipzig with Salzgitter AG more than five years ago. After delivering steel coils to the plant, Salzgitter AG takes away steel remnants of the kind produced at press plants, for example, when doors are punched out, and uses this material to produce new steel. This steel is then supplied to the BMW Group plants. In this way, raw materials can be used multiple times in a circular economy, thereby conserving natural resources.
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. Since this requires significantly less energy, CO2 emissions from production of secondary steel are an average of 50-80% lower than from primary steel.