Ford seeks green steel supplies from Tata Steel, Salzgitter, Thyssenkrupp
Steel producers Tata Steel Netherlands, Salzgitter Flachstahl and Thyssenkrupp Steel Europe will supply carmaker Ford’s Europe division with low-carbon steel for its future vehicles, the car company said on Tuesday October 25
Each of the three strategic suppliers has signed a Memorandum of Understanding with Ford. The carmaker said that it intends to use their low-carbon steel products in a new, medium-sized crossover vehicle to be built at its assembly facility in Cologne, Germany, from 2023.
“Our customers, like us, want to take care of our planet, and we are taking the necessary steps on this journey, providing the vehicles they need to make a positive contribution against climate change, produced in a more sustainable way,” Sue Slaughter, Ford’s purchasing director for supply chain and sustainability, said.
“Improvements within our supply chain are key, and with the use of carbon-neutral steel we will take a major step toward lowering the CO2 footprint of our vehicles,” she added.
Earlier this year, Ford committed to a 10% proportion of carbon-neutral steel in its output by 2030 by joining the First Movers Coalition, a global initiative launched by the World Economic Forum and working to decarbonize heavy industry.
Collaboration with key suppliers is essential to reaching Ford’s European target of zero-carbon emissions for all vehicle sales, and carbon neutrality across its facilities, logistics and suppliers in Europe by 2035, the carmaker said.
In a separate statement on October 25, Tata Steel Netherlands announced that it will supply its Zeremis brand of low-CO2 steel to the carmaker once its IJmuiden mill has switched to green hydrogen-based production.
Fastmarkets requested comment on when this switch will take place [LINK] but Tata Steel Netherlands had not responded by the time of publication.
The steelmaker said that Ford has become its first customer committed to offtaking the green steel that it plans to produce more sustainably via the hydrogen route.
Tata Steel Netherlands is working on producing steel with zero carbon emissions by 2045, it said, with sustainability being noticeably higher on its customers’ agendas.
The chairman of the board of management of Tata Steel Netherlands, Hans van den Berg, said that while Tata Steel transitions to becoming a producer of large quantities of high-quality green steel, it is already supplying customers with a “significant amount of high-quality low-CO2 steel.”
By aligning our sustainability ambitions with [those of] customers such as Ford, we can create an early market for green steel, speed up the transition and meet the expectations of society at large
“By aligning our sustainability ambitions with [those of] customers such as Ford, we can create an early market for green steel, speed up the transition and meet the expectations of society at large,” van den Berg added.
The Salzgitter Group is set to supply Ford with its Salcos green steel, and is planning to gradually convert its steel production to hydrogen-based processes starting from 2025, with a target of CO2-free production from 2033, the group said in a separate statement on October 25.
Currently, Salzgitter Flachstahl supplies Ford’s plants in Spain, Romania and Germany with mainly cold-rolled and hot-dipped galvanized steel products, as well as tailored laser-welded sheets of different grades from its subsidiary company, Europlatinen.
The company’s ambitious Salcos project is expected to be implemented in three stages, between now and 2033 [LINK], with its main goal being to convert its existing integrated steel plant to green steel production.
“This cooperation also shows that customers have confidence in Salcos as a route to green steel production, and see added value in the transformation to green steel,” Salzgitter Flachstahl sales director Phillip Meiser said.
Pressure from consumers in the flat steel sector, where car manufacturers are a major market, has already led to several future green steel supply agreements between steelmakers and companies in the automotive industry, but green initiatives have had little uptake in the long steel sector.
But although the transition from traditional carbon-intensive blast furnace-based steelmaking to greener routes of production has become a central focus for major European steel companies in the mid to long term, traders have shared concerns about the continuing energy crisis in the region and its effect on investment in renewables and green-steel.