Sweden-based truck and bus manufacturer Scania announced today a new agreement with Swedish startup H2 Green Steel to supply low-carbon steel for use building trucks, and to support the company’s aims to decarbonize its supply chain.
The announcement marks Scania’s first order of green steel, and follows the company’s commitment last year to decarbonize its supply chain by 2030, with efforts focused its key production materials emissions sources, with batteries, steel, aluminum and cast iron accounting for approximately 80%.
At the time, Scania said that said that it is targeting 100% green batteries, green steel, green aluminum and green cast iron in its production by 2030.
Scania is a partner in the First Movers Coalition (FMC), which encourages companies in sectors where decarbonization is a challenge to increase low-carbon purchases. This new contract supports the company’s commitment to purchasing substantial amounts of green steel as part of the FMC.
Anders Williamsson, Executive Vice President, Head of R&D and Purchasing at Scania, said:
“With this first order from our strategic partner H2 Green Steel, we are continuing our progress towards minimizing the climate impact from our supply chain.”
Founded in 2020, H2 Green Steel is building the world’s first large-scale fossil-free 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.
Mark Bula, Commercial Head of Boden Steel at H2 Green Steel, said:
“Scania has been one of our biggest supporters from day one. Not only in helping frame the opportunity for green steel but also as an early seed capital investor. Their support and partnership in crafting the value proposition has contributed massively to our go-to-market strategies.”