BMW signs deal with second firm to supply low-CO2 steel – Roadshow

Reducing the carbon emitted while producing steel can have huge environmental impacts. 


BMW is looking to reduce the carbon footprint of its vehicles by using steel that’s produced in a more environmentally friendly way. Helping make this a reality, on Tuesday, the premium automaker announced it signed an agreement with German metal manufacturer Salzgitter AG to source more steel with low CO2 emissions in the next few years.

The goal is to use this so-called “low-carbon steel” in vehicle production at BMW plants in Europe starting in 2026. By 2030, the automaker is aiming to supply more than 40% of its European manufacturing needs with low-CO2 steel. This switch will reduce carbon emissions by an estimated 400,000 tons annually, a huge amount.

Salzgitter AG is the second company supplying eco-friendly steel to BMW. The automobile builder is also set to source this mission-critical material from a new Swedish firm called H2 Green Steel starting in 2025. This partnership was announced last September. The startup’s steel will be produced in a way that eliminates 95% of CO2 emissions.

Steel is usually made in dirty, nasty, coal-fired blast furnaces, but Salzgitter AG has figured out how to do it with a virtually carbon-free process. Electricity provided by renewable sources and hydrogen produced from electrolysis are two keys to this method. Eventually, the company hopes to reduce emissions to just 5% of those associated with conventionally produced steel.

BMW Green Steel - rollsBMW Green Steel - rolls

It takes lots of steel to mass-produce automobiles. 


Beyond all that, through its venture capital fund, BMW i Ventures, the automaker is investing in a company called Boston Metal, which also aims to produce more eco-friendly steel.

Recycling is an excellent way to reduce the environmental impact of vehicle manufacturing. The CO2 emissions from recycled steel are 50% to 80% lower than those of new steel. BMW estimates up to 25% of the steel used in its vehicles comes from recycling loops, that is, manufacturing scraps processed into new steel. By 2030, the automaker wants to increase that figure to 50%.

Today, BMW stamping factories in Europe use more than 500,000 tons of steel each year. Anything the automaker can do to reduce the carbon footprint of this material is a step in the right direction.

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