Swedish company H2 Green Steel announced that it has entered into an agreement to supply German car manufacturer Mercedes-Benz with 50,000 tonne of steel produced without the use of fossil fuels, starting from 2025. The two companies have also signed a separate agreement exploring North America’s potential supply of green steel.
H2 Green Steel, currently constructing its first plant in northern Sweden, plans to revolutionise the steel industry by utilising hydrogen derived from renewable energy sources instead of the heavily polluting coal traditionally used in steelmaking. The preliminary agreement with Mercedes-Benz has now evolved into a binding contract, covering an annual volume of approximately 50,000 tonne. This steel will be produced at H2 Green Steel’s upcoming green hydrogen-powered iron and steel plant located in Boden, Sweden.
Considering that around 900 kg (1,985 pounds) of steel is required per car, according to industry data, this contract will enable Mercedes-Benz to manufacture approximately 55,000 cars with a significantly reduced Co2 footprint. Mercedes-Benz, a major player in the automotive industry, sold approximately two million vehicles in the previous year.
Financial details of the agreement between H2 Green Steel and Mercedes-Benz were not disclosed. However, the companies did announce signing a memorandum of understanding for the potential supply of green steel from North America, although specific details about this partnership were not provided.
H2 Green Steel’s innovative steel production method boasts a remarkable emissions reduction of 95 percent compared to conventional steel manufacturing processes. The World Steel Association estimates that the steel industry accounts for approximately seven to nine per cent of global manmade emissions, making it one of the most carbon-intensive heavy industries.
This strategic partnership between H2 Green Steel and Mercedes-Benz represents a significant step towards a more sustainable and environmentally conscious future for the steel industry. By adopting green steel solutions, these companies actively contribute to the global efforts to combat climate change while fostering innovation and driving the transition to a low-carbon economy.
