Agreement with suppliers from the USA and China
The BMW Group announces it has reached agreements with companies in the USA and China to supply CO2-reduced steel.
According to Joachim Post, BMW AG board member responsible for purchasing and supplier network, steel is one of the main drivers of CO2 emissions in BMW’s supply chain. For this reason, he said, the company has decided to reshape its steel portfolio so that more than a third of the global production network will be supplied with CO2-reduced steel from 2026.
“In this way, we are reducing the carbon footprint of our supply chain by around 900,000 metric tons annually, while promoting the transformation of the steel industry,” Post added.
Conversion of local steel production in America
In the Americas, Post says the BMW Group has signed agreements with U.S. steelmakers Steel Dynamics (SDI) and Big River Steel. These include converting local steel production to electricity from renewable sources.
The BMW Group further reported that the company purchases around half of its used flat steel volume via the so-called electric steel process. In this process, iron and steel scrap are melted using electrical energy. As electricity is generated from renewable energy sources, this production process has high CO2 reduction potential.
Supply of CO2-reduced steel from China starting in 2023
In China, the BMW Group had already reached an agreement with the steel manufacturer HBIS Group in August this year to get CO2-reduced steel from 2023.
By 2026, HBIS Group plans to gradually switch to a hydrogen-based process combined with the electric steel process, according to the BMW Group. This will enable the company to further save CO2, it said.
According to the BMW Group, the company will be the first carmaker to use HBIS Group’s CO2-reduced steel in series production.