[Fellow]June 7, 2023 – Mercedes-Benz signed a supply agreement with Swedish start-up H2 Green Steel (H2GS) over approximately 50,000 tonnes almost CO2-free steel per year for its European press shops and deepened its partnership through a Memorandum of Understanding ...
Mercedes-Benz AG and H2 Green Steel secure supply deal and an MoU to establish North American supply chain
June 7, 2023 – Mercedes-Benz signed a supply agreement with Swedish start-up H2 Green Steel (H2GS) over approximately 50,000 tonnes almost CO2-free steel per year for its European press shops and deepened its partnership through a Memorandum of Understanding (MoU) with the aim to establish a sustainable steel supply chain in North America.
After taking an equity stake in H2GS in 2021, the new supply agreement enables Mercedes-Benz to bring almost CO2-free steel into series production. The partner plans to start its production during 2025.
As part of a broader effort to decarbonise the supply chain, Mercedes-Benz and H2GS agreed to aim to establish a supply chain for green steel produced in North America for local Mercedes-Benz manufacturing plants. Extending the strategic partnership with H2GS to North America marks another important milestone in increasingly pursuing the strategy of procuring close to Mercedes-Benz production sites.
By using a new, innovate manufacturing process, the production of steel at the H2GS production site is almost CO2-free. By contrast, steel produced using a classic blast furnace, emits an average of more than two tons of CO2 per ton. In the new process, the supplier uses hydrogen and electricity from 100% renewable energy sources instead of coking coal in steel production. The hydrogen serves as a reduction gas, which releases and binds the oxygen from the iron ore. Unlike the use of coking coal, this does not produce CO2, but water vapor. H2GS aims to achieve a footprint of 0.4t CO2 per ton of steel at start of supply.
In addition to consequently reducing CO2 emissions, the company is committed to a responsible steel supply, relying on the application of recognized standards and robust certificates. Mercedes-Benz and H2GS share the same understanding of sustainability and intend to establish highest standards in terms of human rights due diligence along the steel supply chain. Mercedes-Benz is a member of the Responsible Steel Initiative and is actively involved in the development of a certifiable sustainability standard for the steel industry. The aim is to ensure environmentally compatible and socially acceptable steel production along the entire value chain.
Mercedes-Benz has set itself the target of making its fleet of new vehicles net carbon-neutral over the vehicles' entire life cycle by 2039. When it comes to sustainability, the company is focused on the consistent reduction of CO2 emissions as well as the preservation of resources.
About H2 Green Steel
H2 Green Steel (H2GS AB) was founded in 2020 with the ambition to accelerate the decarbonization ofthe steel industry, using green hydrogen. Steel, which is one of the world’s largest carbon dioxide emitters, is the company’s first business vertical.
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