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The BMW Group is committed to climate protection and is working diligently to achieve its aim of considerably decreasing CO2 emissions at the source throughout the supply chain.

From 2025 on, the company intends to source steel that emits up to 95 percent less CO2 and is not derived from fossil fuels such as coal.

The BMW Group has recently secured an agreement to this effect with the Swedish startup H2 Green Steel, which produces steel entirely using hydrogen and renewable energy. Steel production is one of the primary causes of worldwide CO2 emissions due to its energy-intensive manufacturing process.

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

Apart from supplying steel made with green energy, the BMW Group and H2 Green Steel have agreed to establish a closed-loop material cycle. H2 Green Steel will recycle sheet metal leftovers, such as those generated at press factories when doors are punched out, and treat them so they may be returned to the facilities as new steel rolls, commonly known as steel coils. This way, raw materials can be reused several times and natural resources are safeguarded in a circular economy. Secondary steel reduces CO2 emissions by an average of 50–80 percent as compared to primary steel due to its lower energy requirements.

The BMW Group currently uses between 20% and 100% secondary steel in its automobiles and will continue to do so in the future. BMW Group presses in Europe process almost 500,000 tonnes of steel per year.

H2 Green Steel is constructing a steel production facility in the northern Swedish province of Norrbotten, near the Arctic Circle. While the region is best known for its reindeer and stunning northern lights, it also has access to high-quality iron ore, abundant energy from renewable sources such as hydroelectric and wind power, a large seaport, and decades of steel manufacturing expertise.

Unlike conventional steelmaking techniques that rely on coke, the company uses hydrogen created from renewable energy to remove the oxygen from the iron oxide. This process known as direct reduction of iron ore creates nearly no CO2, only water, so eliminating around 95% of the CO2 emissions created ordinarily. The specially constructed hydrogen power plant, which will be powered by water and renewable energy sources from across the region, will be incorporated directly into the steel production plant. Additionally, the company employs green energy generated locally to power the remainder of the manufacturing process.

Northvolt, a Swedish firm that develops and manufactures battery cells for electric automobiles, is also pursuing green energy opportunities in northern Sweden.

The BMW Group inked a long-term battery cell supply agreement with Northvolt last year. From 2024, the battery cells will be manufactured in Europe at the Northvolt gigafactory in Skellefte, northern Sweden. The company will manufacture the battery cells entirely with green electricity generated by local wind and hydroelectric sources.

Beginning in 2025, the BMW Group will refocus its product portfolio – which has expanded effectively over decades – around the Neue Klasse. Three fundamental characteristics will distinguish the Neue Klasse: a newly reimagined IT and software architecture, a new generation of high-performance electric drive trains and batteries, and a radically new level of sustainability over the vehicle’s whole lifecycle. These elements are interlaced into an overall vehicle architecture that has been uncompromisingly optimized for electric drive trains, setting a new standard for digitization and electrification while guaranteeing that future vehicle generations retain the distinctive flair of a typical BMW.

The BMW Group actively contributed in the establishment of environmental and social standards throughout the entire steel value chain, beginning at the mine, as part of its collaboration with the not-for-profit organization ResponsibleSteel. This sustainability standard for steel industry manufacturing facilities was published in 2019 following a multi-stakeholder process and currently serves as the foundation for certification. ResponsibleSteel is the world’s first multi-stakeholder standard and certification project for the steel sector.

Nedim Husomanovic

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