German carmaker Porsche has entered into an agreement with Swedish startup H2 Green Steel. The aim, Porsche writes, is to “further improve the emissions balance of Porsche vehicles by using CO₂-reduced steel.”
Headquartered in Stockholm and founded in 2020, H2 Green Steel works to “speed up the decarbonization of the steel industry” by producing the material using hydrogen and electricity from renewable energy sources.
Compared to conventional steel production methods that involve coal, H2 Green Steel says its production process generates 95% fewer CO₂ emissions. Its steel production process is thus “almost CO₂-free” and the material produced has “one of the lowest carbon footprints on the market,” according to Porsche.
The first H2 Green Steel manufacturing plant is set to open in Boden, Sweden, in 2025.
The deal between Porsche and H2 Green Steel, announced yesterday, paves the way for the supply of up to 35,000 tons of the startup’s low-carbon steel per year, beginning in 2026. Last year, Porsche used 220,000 tons of steel for all of its vehicles.
Barbara Frenkel, Executive Board Member for Procurement at Porsche AG, emphasized the significance of CO2-reduced steel in their sustainability strategy, stating:
“Porsche is working towards a carbon-neutral balance sheet across the value chain for its cars by 2030. CO₂-reduced steel plays a key role in our sustainability strategy. With the steel from H2 Green Steel, we aim to further reduce the CO₂ emissions caused by this important material.”
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“Energy, processes and materials account for a significant share of CO₂ emissions in the supply chain. That is why we want to increase the use of recycled materials and green electricity in the production processes of direct suppliers as part of our decarbonisation efforts,” Frenkel added.
The CEO of H2 Green Steel, Henrik Henriksson, also expressed enthusiasm about the collaboration with Porsche:
“Few brands are as iconic as Porsche. It stands for quality and a premium product. It’s also a company that is working actively towards a sustainable future, with clear expectations on how the supply chain contributes to that. Having Porsche place an order for near zero-emission steel is a real boost both for us as a company, but also for the transformation of the steel industry, which has very much been driven by the demand from the automotive industry.”