Mercedes-Benz recently inked a significant steel deal with Steel Dynamics, Inc. (SDI), agreeing to source annually over 50,000 tonnes of CO₂-reduced steel for its Tuscaloosa, Alabama plant. This key agreement marks a crucial step towards decarbonizing its global steel supply chain.
SDI will produce the steel using an electric arc furnace (EAF) powered by 100% renewable electricity. Compared to primary steel production, which involves the use of blast furnaces and basic oxygen furnaces, green electricity-powered EAFs can cut emissions by over half, resulting in an average of 1.0 ton CO₂ per ton of steel. This development enhances the efforts of SDI and Mercedes-Benz, collaborators since 2015, to minimize emissions within the steel supply chain.
SDI’s flat-rolled steel, composed of a minimum of 70% recycled scrap, is a key component in all Mercedes-Benz models assembled in Tuscaloosa, including the EQS SUV and EQE SUV. Both entities have agreed to potentially increase the scrap content soon, thereby further reducing the carbon footprint. The CO₂-reduced steel from SDI will be integrated into the series production at the Tuscaloosa plant as early as September 2023.
Consistent with Mercedes-Benz’s local-for-local approach, this United States supply agreement is a component of a worldwide initiative to decarbonize the steel supply chain of Mercedes-Benz. It follows a series of agreements on procuring CO₂-reduced and almost CO₂-free steel in Europe.
Dr. Gunnar Güthenke, Head of Procurement & Supplier Quality at Mercedes-Benz Cars, expressed, “Our ambition is clear: Together with our partners we want to make our entire fleet of new vehicles net carbon-neutral along the entire value chain by 2039. Following this strategy, our agreement with SDI to procure more than 50,000 tonnes of CO2-reduced steel annually is another important milestone to establish a sustainable steel supply chain in North America.”
Beyond the continuous reduction of CO₂ emissions, Mercedes-Benz is committed to sourcing steel responsibly, relying on established standards and solid certificates. The firm is a member of the Responsible Steel Initiative and actively contributes to the creation of a certifiable sustainability standard for the steel industry. The goal is to guarantee environmentally friendly and socially responsible steel production across the entire value chain.
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