Automaker BMW Group has signed a contract to receive green steel from Swedish firm H2 Green Steel (H2GS).

The agreement includes recycling and end-of-life management measures, with a deal to have 40pc of pre-consumer steel scrap volumes returned to H2GS’ electric arc furnaces for recycling.

The two firms have also signed a technical cooperation agreement which will include several measures aimed at reducing CO₂ emissions in BMW’s steel supply chain by 2mn t by 2030. BMW has a wider target to cut the lifecycle CO₂ emissions of its vehicles by more than 40pc by 2030.

H2GS is also developing a 5mn t/yr green steel facility in Sweden, with startup planned for 2024.

“Working with progressive companies like BMW Group pushes us to be better both in our own operations and our value chain” Henriksson, H2GS

The facility will directly reduce iron using green hydrogen and then further process it—alongside recycled scrap—in an electric arc furnace (EAF), a production method known as DRI-EAF. The facility will be located in Norrbotten in northern Sweden—an area with good renewable resources and iron ore supplies.

Total CO₂ emissions from steelmaking must be more than 90pc lower than those of traditional processes for the steel to qualify as green, according to the firm.

“Working with progressive companies like BMW Group pushes us to be better both in our own operations and our value chain,” says Henrik Henriksson, CEO of H2GS.

Investors in H2GS include investment holdings group Vargas, heavy vehicle manufacturer Scania and metallurgical firm SMS Group.

Car manufacturer Mercedes-Benz took out an equity stake in the business in May 2021 and plans to start using green steel on its production lines from 2025.

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Author: Tom Young