Mercedes-Benz inks green steel supply deal with Nucor

Mercedes-Benz has signed its second deal with a major US steel producer to supply greener steel in hopes of reaching decarbonization goals by the year 2039, the German automaker announced on Wednesday March 20

According to the announcement, Mercedes reached a deal with Nucor to supply its low carbon Econiq™ steel to the automaker’s plant in Tuscaloosa, Alabama.

Mercedes announced a similar deal with Steel Dynamics in September 2023.

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“Nucor is grateful for the opportunity to partner with Mercedes-Benz as a strategic supplier of lower-embodied carbon steel, which will reduce carbon emissions throughout their supply chain,” Dan Needham, Nucor executive vice president of commercial, said in a separate Nucor release. “Our Econiq™ brand is helping steel end-users meet their growth and sustainability goals, and we are proud that it is going to be a key piece of Mercedes-Benz’s path toward a net carbon-neutral new car fleet along the entire value chain.”

Mercedes made the announcement in conjunction with its third Environmental, Social and Governance (ESG) Conference in Stuttgart, Germany.

“Mercedes-Benz has always been driven by a belief in tomorrow,” chief executive officer Ola Källenius said in the Mercedes release. “This pioneering spirit is key so we can play our part in climate protection and to make our business even more sustainable in all respects. We continue to strive for net carbon-neutrality by 2039, and we believe that ESG principles enable long-term value creation.”

No specifics of the deal with Nucor were released, but Steel Dynamics is slated to supply Mercedes with 50,000 tonnes of “CO2-reduced steel” per year.

Making the move to greener steel use has become a priority for a large segment of automakers, with decarbonization goals becoming more commonplace in North America and Europe, but the transition hasn’t been easy.

CALSTART, a nonprofit organization geared toward accelerating the path to a “clean” transportation industry, began its own Race to Green Steel campaign to raise awareness of green steel possibilities among auto manufacturers.

Cleveland-Cliffs CEO Lourenco Goncalves said in January’s fourth-quarter earnings call that his company has held pricing steady with automakers despite already applying a $40 per net ton surcharge on steel products produced using hot-briquetted iron (HBI).

“With Cliffs H, we were able to implement a tangible way for us to be monetarily recognized for the real environmental gains and [carbon dioxide] emissions reduction we have achieved over the last several years,” Goncalves said at the time. “With this success, we are pleased that we are able to hold our automotive pricing roughly steady into 2024, despite low-priced competition in the marketplace.”

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