Baosteel to supply green steel for Beijing Benz from 2023

Baoshan Iron & Steel (Baosteel) will begin to supply steel made with sharply reduced carbon emissions to Beijing Benz Automotive (BBAC) from next year, the Chinese steel giant said on Tuesday November 22

From 2026, the reduction in carbon dioxide emissions — related to Baosteel’s production of automotive steel using a hydrogen-based shaft furnace-electric-arc furnace process — will reach 50-80%, compared with traditional steelmaking methods.

Baosteel also intended to supply “green” steel with carbon dioxide emissions cut by 95% in the future.

These objectives were part of a Memorandum of Understanding (MoU) signed by Baosteel and BBAC on Tuesday, in their attempt to jointly create a low-carbon and green automotive steel supply chain, to promote a reduction in carbon emissions across the whole industrial chain as well as the whole life cycle of resulting products.

The cross-sector collaboration marked another crucial step by Baosteel toward its decarbonization targets.

In September, Baosteel launched three ultra-low-carbon auto parts, which were said to reduce related carbon emissions by more than 50%.

The steelmaker is also building a net-zero-carbon automotive steel sheet production line at Zhanjiang in southern China, carbon emissions from which will be about 90% lower than from a blast furnace-based steelmaking process.

After the hydrogen-based shaft furnace comes online by end-2023, with capacity for 1 million tonnes per year of direct-reduced iron (DRI), the production line will be fully put into operation in 2025 and will be able to produce as much as 1.8 million tpy of net-zero-carbon, high-end flat steel.

BBAC was founded in 2005 and is a joint venture with investment from BAIC Motor, Mercedes-Benz Group AG and Daimler Greater China. It integrates R&D, engine and complete vehicle production, sales, and after-sales services, according to its website.

In line with BAIC Group’s “Blue Plan” and Mercedes-Benz’s “Ambition 2039,” BBAC intends to be carbon dioxide-neutral across the supply chain by 2039.

Prior to the cooperation between Baosteel and BBAC, fellow German carmaker BMW Group and HBIS signed an MoU for the creation of a green and low-carbon steel supply chain.

HBIS, based in Hebei, northern China, will supply low-carbon steel for BMW car production in Shenyang from mid-2023.

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