Mercedes-Benz and H2 Green Steel have signed a binding agreement for the delivery of about 50.000 tonnes of green steel to the car maker’s European production annually. In a pioneer move Mercedes-Benz has also signed a memorandum of understanding with H2 Green Steel for the potential supply of green steel produced in North America.
Mercedes-Benz was an early investor in H2 Green Steel and was also early out in confirming customer demand for green steel through an offtake agreement. This agreement has now been further developed into a binding agreement covering volumes of about 50.000 tonnes per year, which will be produced in H2 Green Steel’s green hydrogen powered iron and steel plant in Boden in northern Sweden. In using high-quality steel that is sustainably produced, Mercedes-Benz takes yet another step towards reducing the environmental impact from its car manufacturing.
“H2 Green Steel exists because pioneering companies in the automotive industry like Mercedes-Benz, signaled the transition in the steel industry was too slow for them to meet their climate targets. Working side-by-side with Mercedes Benz, we have a partner with whom we can raise the bar when it comes to supply chain emissions, circularity and social sustainability. They are a very strong player to liaise with for our European operations, but naturally also as we endeavor into the steel value chain in North America,” says, Henrik Henriksson, chief executive officer, H2 Green Steel.
In addition to a sustainable production of green steel, Mercedes-Benz has a strong commitment to circularity and the two companies will create a closed-loop recycling of scrap steel to the Boden plant. The partnership also includes H2 Green Steel being able to leverage Mercedes-Benz extensive knowledge and expertise in supply chain human rights.
“With the supply deal of around 50,000 tonnes almost CO2-free steel from H2 Green Steel for our manufacturing plants in Europe, Mercedes-Benz and H2 Green Steel are accelerating the creation of a decarbonized, regional and resilient steel supply chain. At the same time, we are taking our partnership to the next level with the aim of establishing a sustainable steel supply chain in North America, another important step towards making the auto industry more resilient and sustainable,” said Markus Schäfer, member of the board of management of Mercedes-Benz Group AG chief technology officer, development & procurement.
With the partnership in Europe as the foundation, the two companies have also agreed to work together to enable a long term supply of green steel produced in North America for Mercedes-Benz manufacturing plants in North and South America. By doing so, the companies will demonstrate the feasibility and value of a green steel supply chain.
“We have talked to different stake-holders in both Canada and the U.S. for some time and the possibility to lever-age a large supply of renewable electricity for the production of green hydrogen and green sponge iron that can feed a sustainable steel production is a very interesting prospect for H2 Green Steel as it continues to push the steel value chain to decarbonize globally”, said Henriksson.
