Global automotive supplier KIRCHHOFF Automotive announced today a seven-year, €130 million agreement with Swedish company H2 Green Steel for the delivery of near zero emissions steel in order to decarbonize its supply chain and achieve its sustainability goals.
Steel is the main component of KIRCHHOFF Automotive’s supply chain, accounting for half its material purchases, with 90% of the company’s carbon footprint is originating through the use of conventionally produced steel and aluminum.
KIRCHHOFF said that orders from international car manufacturers for upcoming generations of vehicles make it clear that the demand for safe and sustainable body-in-white parts will increase strongly in the coming years. According to Michael Rank, Global Executive Vice President Procurement at KIRCHHOFF, customers “want to see products with lower CO2 footprint.”
“This matches our ambitions to be in the forefront of sustainable development in the industry, as well as our legacy where sustainability has always been important. It’s great to be able to work with a new player on the market and the team at H2 Green Steel have really pushed the steel industry to do more and move faster in terms of sustainability.”
Steelmaking is one of the biggest emitters of CO2 globally, and one of the more challenging sectors to abate, with total greenhouse gas emissions (GHG) from the sector accounting for 7% – 9% of direct emissions from the global use of fossil fuels.
Founded in 2020, H2 Green Steel is developing its flagship green steel plant in Boden, Sweden, with the project including a giga-scale green hydrogen plant as an integrated part of the steel production facility. The company employs hydrogen produced using green power to remove the oxygen from iron oxide, avoiding most of the CO2 emissions normally produced, and uses electricity from 100% renewable sources for the energy requirements generated in the manufacturing process. H2 Green Steel aims to begin production in 2025, with plans to produce 5 million tons of nearly fossil-free steel by 2030.
Deliveries of green steel from H2 Green Steel’s Boden plant to KIRCHOFF’s plants across Europe are expected to begin in 2027. The two companies will also work together on a circularity initiative, aiming to send at least 30% of the steel scrap volumes back to H2 Green Steel’s electric arc furnaces in Boden for recycling.
Stephan Flapper, Head of Commercial, H2 Green Steel said:
“Suppliers to the automotive industry have to follow the ambitious plans that progressive car makers have set out. However, we also have a group of companies that run before the rest as they follow their own compass. KIRCHHOFF Automotive is one such company. They combine their impressive legacy with a strong direction for the future where sustainable products are as much a competitive edge, as they are important for the climate and sustainability targets.”