BMW to use green steel

Until recently, rethinking CO2-heavy industries to reduce or remove carbon, and decarbonising energy-intensive industries, has not been straightforward.

However, following the announcement of the H2 Green Steel initiative set to establish the world’s first large-scale green steel producer, the business case for commercialising green hydrogen and making it competitive is building momentum, especially as 8% of global carbon dioxide emissions are caused by steel production – putting steel’s role in the climate crisis under scrutiny.

Steel production is so carbon-intensive because of the way iron is extracted from its ore. Blast furnaces are packed with iron ore, lime and coke – a fuel derived from metallurgical coal that removes the oxygen molecules from iron oxide. As a great deal of energy is required to heat the ore, melt it, and separate the oxygen from the iron, the iron ore, lime and coke are heated to over 1,000C – producing CO2 as a by-product of the chemical reaction.

Following recent pledges by many of the world’s automotive manufacturers to embrace electric motors, BMW Group, recognising the potential that hydrogen-produced steel has in decarbonising the supply chain for car manufacturing, has announced that it will use hydrogen-produced green steel from Swedish start-up H2 Green Steel in its manufacturing operations from 2025.

Stockholm-based H2 green steel intends to produce 5 million tonnes of fossil-free steel annually by 2030. Its steel production facility planned for construction in Boden, northern Sweden, will include a giga-scale green hydrogen plant which uses hydrogen produced through water and locally produced green power to remove the oxygen from iron oxide. This direct reduction of the iron ore produces almost no carbon.

In further collaboration with BMW, H2 Green Steel will take back metal scraps from the car manufacturing operation and process them so they can be returned to manufacturing plants as new steel rollers. This means that raw materials will be used repeatedly.

Dr Andreas Wendt, member of the Board of Management, BMW AG said,

“Our goal is to reduce carbon emissions in our steel supply chain by about two million tonnes by 2030. Sourcing steel produced using hydrogen and green power can make a vital contribution to this…Steel is essential for producing cars and will be no less important for future vehicle generations. Innovative technologies that enable virtually carbon-free production of steel have a significant impact on our ability to reduce carbon emissions in our steel supply chain.”