Mercedes-Benz has signed an agreement with Steel Dynamics (SDI) to source carbon-reduced steel for the automaker’s production plant in Tuscaloosa, Alabama. The agreement includes the purchase of more than 50,000 metric tons of carbon-reduced steel each year as Mercedes-Benz works toward decarbonizing its international supply chain.
SDI’s rolled steel is made of 70% or greater recycled scrap content and is made using an electric arc furnace (EAF) that uses 100% renewably sourced electricity. The SDI production method produces emissions around eight times lower than primary steel production, which uses blast furnaces and basic oxygen furnaces.
The recycled, low-carbon steel will be used on all Mercedes-Benz models built in Tuscaloosa starting as early as this month.
“Our ambition is clear: Together with our partners we want to make our entire fleet of new vehicles net carbon-neutral along the entire value chain by 2039,” said Dr. Gunnar Güthenke, head of procurement and supplier quality at Mercedes-Benz Cars. “Following this strategy, our agreement with SDI to procure more than 50,000 tonnes CO2-reduced steel annually is another important milestone to establish a sustainable steel supply chain in North America.”
In addition to its efforts to reduce emissions through steel sourcing, Mercedes-Benz is a member of the Responsible Steel Initiative, through which the company supports the development of a certifiable sustainability standard for the steel industry. This agreement follows an additional supply agreement between Mercedes-Benz and H2 Green Steel for more than 50,000 metric tons of low-carbon steel to be sourced annually in their European press shops.
How Electric Arc Furnaces Help Decarbonize Steel Production
The U.S. steel industry has explored many avenues for reducing its emissions, from recycling to carbon capture. The sector is responsible for 7% of global emissions, and it has been identified as a difficult-to-decarbonize sector because of its dependence on high-heat production processes.
An increasing number of companies are exploring ways to change this. Nucor, for example, has invested in a start-up that is able to refine iron ore, which makes up 98% of steel, at much lower temperatures. Much like SDI’s process, this is made possible through the use of electric arc furnaces, which allow steel production to occur without depending on coal.
SDI promotes more widespread adoption of electric arc furnaces, and the company considers understanding the emissions-reducing capacity of EAFs as the “single most impactful decision” a steel consumer can make.