The German automotive sector requires accelerated development in environmentally friendly steel production
In the rapidly evolving world of automobile manufacturing, the race to adopt green and sustainable practices is heating up. A recent European ranking has revealed some interesting insights into the steel usage of various global automakers.
Stellantis, a major European manufacturer, finds itself at the bottom of the list, significantly pulling down the average with less than 3% benchmark fulfillment in green steel usage. This stark contrast is particularly notable when compared to other players in the industry.
German automobile giants like BMW and others have significant improvement potentials in the use of green steel. The transition to climate-friendly steel is ongoing, supported by new standards such as the Low Emission Steel Standard (LESS) and projects like Power4Steel focused on steel decarbonization. BMW, for instance, has signed supply agreements with Salzgitter and Stegra, aiming to increase secondary steel usage to up to 50% by 2030. However, the company weakened its steel target in 2024, aiming for an average of 50% for all secondary materials per vehicle by 2030.
Volvo, on the other hand, outperforms the industry average fourfold in green steel usage. The Swedish automaker sets ambitious targets for green and recycled steel usage, aiming to use 50% low-carbon steel by 2030 as a member of SteelZero. Volvo also publishes model-specific CO2 data for its steel supply chain, providing transparency that sets it apart from many competitors.
Mercedes-Benz ranks second but lags far behind Volvo in green steel usage. Compared to Volvo and companies with clear targets like Ford or General Motors, Mercedes' ranking suffers significantly in the evaluation of green steel usage. The German automaker lacks clear, published data on the actual share of green steel in its total steel demand and provides no transparent updates on recycling steel usage.
Tesla, another top player, is the only company in the top 5 that discloses detailed Scope 3 emissions from its steel supply chain.
The European ranking, which evaluated 18 global automakers based on transparency, targets, and concrete measures to decarbonize their steel supply chains, has shown that only those who decarbonize their steel supply chain will remain competitive in the future, according to Andersen from T&E.
To push the industry further, T&E proposes mandatory disclosure of steel emissions per model and a uniform EU label for green steel to enhance market transparency. They also urge the European Commission to introduce clear legal requirements for green steel use in new vehicles: 40% by 2030, 75% by 2035, and 100% by 2040.
In addition, T&E proposes a 30% recycling quota for steel from 2030 under the EU End-of-Life Vehicles Directive. They also suggest that the IAA, an upcoming automotive event, could be a good moment for politics to make the automotive industry the leading market for green 'made-in-Germany' steel through clear guidelines.
As the industry continues to evolve, it's clear that transparency and ambitious targets are key to success. With competitors like Volvo setting the bar high, it remains to be seen how other manufacturers will respond and adapt to these changing times.
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