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From 2025, the BMW Group plans to source steel for its cars with up to 95% less CO2 emissions and without requiring fossil fuel resources.

As such, the group has reached an agreement with the Swedish startup H2 Green Steel, which uses hydrogen and only green power from renewable energies for steel production.

“Our goal is to reduce CO2 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,” says Dr Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.

“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 to have a significant impact on our ability to reduce CO2 emissions in our steel supply chain.”

As well as producing steel with significantly less impact on the environment, BMW Group and H2 Green Steel have agreed to create a closed-loop material cycle.

H2 Green Steel will take back sheet metal remnants (basically the off-cuts from doors and other car panels) and will reprocess them into new steel rolls. 

As a result, the same raw materials can be used multiple times. Plus, secondary steel lowers CO2 emissions by an average of 50-80%, compared to primary material. For what it’s worth, the BMW Group is already using between 20% and 100% secondary steel in its vehicles and says it will continue to increase this percentage in the future.

H2 Green Steel, based in Norrbotten, one of Sweden’s northernmost cities, employs hydrogen produced using green power to remove the oxygen from the iron oxide – unlike conventional processes that rely on coke for making steel. This process produces almost no CO2 at all, with water the only main byproduct – thereby avoiding 95% of the CO2 emissions normally produced. 

The specially built hydrogen power plant, which uses water and green power from across the region, will be directly integrated into the steel production plant. The company also uses local green power for the remainder of the manufacturing process.

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